MIXI’s Diversification Strategy Puts Company on Path to Sustainable Growth

Japan’s entertainment industry has a rich and storied history, but in recent years, global trends have shifted, with new entrants from China and South Korea emerging as dominant players in the entertainment space. From your perspective, what are the key strengths that set Japan’s entertainment industry apart? Additionally, how is MIXI adapting to an increasingly competitive global landscape while maintaining its unique identity?

To begin, I’d like to highlight some key characteristics of Japan’s entertainment industry. There are two major factors that set it apart, both of which relate to freedom of expression.

First, Japan is a largely homogeneous nation, which means there are fewer considerations when it comes to political correctness compared to more culturally diverse markets. Second, because Japan is not a predominantly religious society, there are fewer restrictions on creative content, allowing for a high degree of artistic freedom, which is also constitutionally protected.

From a business perspective, this high level of creative freedom has contributed to a strong foundation for storytelling. Japan has a long tradition of weekly manga and anime publications, which have produced exceptional content and compelling narratives over decades. With a domestic audience of over 100 million people, this content has been widely consumed and deeply embedded in Japanese culture.

Additionally, Japan has a rich collaboration culture, particularly within the anime and gaming industries. Unlike in some markets where religious or cultural sensitivities may impose content restrictions, Japan’s secular nature makes it easier to integrate different mythologies, characters, and franchises without facing major censorship concerns. This has fueled the development of diverse and imaginative storytelling across multiple genres.

That being said, we are fully aware that Japan’s population is in decline, which makes international expansion a priority for us. However, in order to successfully export our intellectual properties (IPs) to global markets, we must adapt to different cultural and regulatory landscapes, particularly when it comes to political correctness and religious sensitivities.

Japan has cultivated a wealth of unique content that offers fresh perspectives and engaging narratives. While it may take time, we, at MIXI, are going to expand our Intellectual Property (IP) abroad, so we believe that if we can effectively convey the storytelling of our IP content, they will be embraced and beloved by audiences worldwide.

Japan’s population decline presents major challenges, including labor shortages and a shrinking domestic market. How is MIXI addressing these challenges? Additionally, to what extent must you look beyond Japan’s borders to ensure long-term business continuity and sustained growth?

When it comes to talent, there is no doubt that Japan will face significant challenges in the near future. The combination of low birthrates and an aging population means there will be fewer young professionals entering the workforce, creating intense competition for skilled talent.

To make matters more complex, Japan lags behind other nations in immigration policies, limiting the ability to attract foreign talent. If we rely solely on Japanese talent, the content industry will struggle to thrive. Expanding our hiring pool globally and fostering international collaboration will be crucial for the industry’s future.

One way to address these challenges is by leveraging AI to enhance creativity. Compared to other nations, Japanese society has a much higher level of comfort with AI and robotics. While there may be some resistance, it is significantly less pronounced in Japan than in industries like Hollywood, where concerns over AI replacing human jobs have sparked major debates.

In the content creation sector, labor shortages have already become a serious issue, and many professionals fear that AI will replace their jobs. However, this is a misconception. Instead of replacing human talent, AI can serve as a powerful tool that enhances creative workflows and streamlines production. Rather than fearing AI, content creators have strong incentives to integrate AI-powered tools to increase efficiency and push creative boundaries.

At the same time, hiring remains a challenge, and competition for skilled professionals is only intensifying. Going forward, a combination of AI-driven innovation and international talent acquisition will be essential for sustaining growth in the Japanese entertainment industry.

Six years ago, digital entertainment accounted for 90% of your revenue. Today, it represents around 70% of revenue, reflecting the growth of your sports and lifestyle divisions. How do you expect your revenue mix to evolve across your three core business pillars—digital entertainment, sports, and lifestyle—in the coming years?

Ideally, we would like to balance our three core divisions—digital entertainment, sports, and lifestyle—equally at 33% each, but this remains an ongoing effort. Gaming continues to be a strong driver of revenue, while sports is steadily growing. However, on the lifestyle side, revenue has not yet met our expectations.

That said, there are positive indicators in the lifestyle segment. For example, mixi2’s user base is expanding, which gives us a solid foundation for growth. If we can further enhance monetization strategies, we believe this platform has the potential to become a highly sustainable and scalable business model.

Additionally, we see a growing skepticism toward major social media platforms such as X (formerly Twitter), TikTok, and Meta. This shift presents a unique opening for our platform, positioning mixi2 as a compelling alternative social network in a market where users are increasingly seeking new, trustworthy, and engaging digital communities.

MONSTER STRIKE has always emphasized multiplayer gameplay and community-driven events, aligning with MIXI’s core philosophy of fostering social connections through entertainment. How do you plan to further expand the MONSTER STRIKE IP while strengthening the community engagement and player ecosystem that has been central to its success?

At MIXI, all of our services are fundamentally built on communication. In that sense, we compare ourselves to Meta as our core focus has always been on fostering social connections. On this foundation of communication, we have developed social networking, social gaming, and social betting, leveraging the viral nature of social platforms as a key driver of business growth.

Another essential component of our strategy is intellectual property (IP). For content to go viral and gain widespread traction, it needs to be anchored by a strong IP or valuable asset. By combining engaging IPs with a communication-driven model, we create sustainable ecosystems where users remain actively engaged over time.

TIPSTAR, your online betting platform, has been a major revenue driver for MIXI in Japan. We understand that a local and consolidated subsidiary of MIXI became the first Japanese company to secure a betting license in Australia. In addition to this, you are also involved in sports team management and operate your own multi-purpose sports venues. Why did you choose to make sports your second major business pillar? Additionally, what synergies are you able to create by integrating sports team management and venue operations into your overall business strategy?

My initial interest was in sports betting, but to make the business viable and scalable, I needed to expand into the surrounding areas of the sports ecosystem. Since our gaming model is built on communication and multiplayer collaboration, I saw tremendous potential in social networking within sports—particularly through shared experiences, empathy, and community-driven engagement. Sports content has a natural viral effect, especially among friends and teammates who play together, making it a compelling social entertainment platform.

Due to regulatory hurdles and the complexity of lobbying activities, advancing our sports betting business in Japan was, at first, difficult. Fortunately, we were able to provide an online betting platform called “TIPSTAR” for betting on bicycle racing and auto racing, which are legalized in Japan, and have achieved significant growth. At the same time, we have also been very ambitious in sports team management, first getting involved through sponsorships and eventually owning a professional sports team.

In basketball, profitability is closely tied to owning the infrastructure itself—in this case, the venue. Without control over venue operations, building a sustainable business model is difficult. We value the passionate feelings of camaraderie and togetherness that come from watching sports, and this naturally expanded into team ownership and facility management.

Earlier, we discussed your expansion into Australia, a market that has experienced significant growth in sports betting. Given the highly competitive nature of the Australian sports betting industry, what strategies are you implementing to differentiate from existing players in the market?

Currently, most consumers engage with sports content passively, without placing bets. However, we believe we can enhance the experience by introducing more interactive features, such as enabling bets among friends, which would serve as a key differentiator in the market.

Additionally, the time difference between Japan and Australia works in our favor, with Melbourne being only one hour in front of Tokyo. This geographical advantage makes collaborations and operations significantly more efficient.

We also offer horse racing services in Japan, and given that horse racing is deeply embedded in Australia’s sports betting culture, we see a major opportunity to leverage our expertise in this area. By combining our knowledge of gaming, social interaction, and betting mechanics, we can introduce a unique offering that resonates with both casual and dedicated bettors in Australia.

MIXI is well known in Japan for developing mixi, one of the country’s most successful social media platforms. In 2015, you launched FamilyAlbum, which has grown to over 25 million users worldwide. The photo-sharing market is extremely competitive, with platforms like WhatsApp and Instagram dominating global market share. What do you believe has set FamilyAlbum apart and contributed to its success despite the crowded landscape?

Two key factors have driven FamilyAlbum’s success. First, we focused on serving a niche market by optimizing both functionality and scope. Rather than positioning FamilyAlbum as a general photo-sharing app, we dedicated it specifically to family photo-sharing, making it a highly targeted and effective solution. This clear focus has worked very well in our marketing strategy, allowing us to resonate deeply with users seeking a private, family-oriented platform.

Second, usability has been a major differentiator. We designed FamilyAlbum with intuitive navigation, ensuring that even seniors and individuals with lower IT literacy can easily use the platform. By prioritizing accessibility and simplicity, we have created an experience that is welcoming, functional, and inclusive for families of all generations. I believe these two factors—a well-defined niche and an intuitive user experience—have been critical to FamilyAlbum’s strong adoption and growth.

FamilyAlbum has successfully expanded beyond Japan, demonstrating strong international appeal. Looking at MIXI’s lifestyle and social division as a whole, which international markets are you targeting for future expansion, and what strategies will you employ to strengthen your global presence?

FamilyAlbum is one of our key offerings and serves as the core driver of our international expansion. When considering the global market for smartphone photography, it’s important to recognize that very few people are entirely disconnected from family or loved ones. Extended families can span across countries and generations, making the potential market size even larger than it may initially seem.

This is why we are continuously expanding the platform’s offerings, with a particular focus on enhancing the experience for grandparents—a demographic that deeply values staying connected with their grandchildren. By further optimizing FamilyAlbum for this audience, we aim to strengthen intergenerational connections and expand our global footprint in meaningful ways.

Family Album

Family Album

Family Album

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Social media applications, while offering great user experiences, often face significant challenges in monetization. Even major social media platforms like X (formerly Twitter) have struggled to develop sustainable revenue models. How do you envision the monetization path for FamilyAlbum moving forward? What strategies are you considering to ensure its long-term financial sustainability while maintaining a seamless user experience?

Where we are right now with FamilyAlbum suggests that there are still significant opportunities for monetization, particularly around an advertising model. However, rather than relying on traditional banner ads, we are exploring alternative approaches, such as sponsored branding integrations, where a sponsor prefix could be incorporated into the app name.

Another area is digital merchandise. By enhancing the decoration of photo items, we can further enhance the user experience while introducing new revenue streams. Additionally, our core monetization strategy revolves around physical album printing, which offers a fixed-cost production model with clear profitability potential.

Major social media platforms have faced significant challenges in recent years, with X losing large numbers of users and TikTok potentially facing a major ban in the U.S.. As users look for alternative platforms, mixi2 is in a strong position to capture this shifting audience.

Domestically, we are focusing on two key areas: information security, ensuring that users’ data and privacy are protected, and authenticity, addressing concerns around disinformation, particularly among celebrities, public figures, and even in elections, where misinformation has influenced political outcomes.

While some platforms intentionally amplify negative or misleading content to boost engagement and impressions, we are taking the opposite approach—prioritizing credibility and reinforcing information security to create a trustworthy social network.

You mentioned disinformation, which is a particularly hot topic right now, with Meta recently announcing that it will disband its fact-checking team in favor of a community-driven approach, similar to X’s Community Notes. Do you believe this decentralized fact-checking model is the right approach, or do you think there should be more centralized oversight to ensure greater accountability in combating misinformation? It’s a difficult balance to strike. Personally, I support democracy, which inherently opposes centralized control and censorship. However, it is concerning to see how easily people can be misled by unverified information with no authenticity checks.

In traditional media, such as magazines, fact-checking is an ethical obligation, and primary information sources are verified before publication. In contrast, social media operates in a landscape of anonymity, where users can post anything with little to no repercussions. This creates a precarious situation for companies like ours, as we navigate the fine line between protecting free speech and ensuring platform integrity.

Could you share more details about your plans and strategies for expanding the MONSTER STRIKE IP into India? What unique opportunities and challenges do you anticipate in this market?

We plan to take a similar approach in India as we did in Japan, focusing on social engagement and virality. Our goal is for players to invite their family and close friends to play MONSTER STRIKE, creating a network effect that drives organic growth.

One key difference in our India strategy is our plan to feature strong collaborations with other IPs from the outset. Japanese anime has already gained significant traction in the Indian market, and we intend to fully leverage that popularity to strengthen our presence.

At this stage, we cannot disclose the specific IPs we are considering for collaboration, but Japan has a wealth of globally recognized franchises, giving us a unique advantage in making inroads into the Indian gaming market.

MONSTER STRIKE

In January 2025, MIXI released its financial results for the first six months of 2024, showing strong performance, including a 70% increase in revenue and a doubling of operating income. Can you walk us through these financial results and explain the key factors behind the significant increase in operating profit?

In terms of improving operating profit, this is largely attributable to our strategic exit from several game titles. Many Japanese companies have heavily invested in the mobile gaming market, but this sector has also seen significant financial losses in recent years. We faced similar challenges and ultimately made the decision to withdraw from some mobile games. This shift may be one of the reasons why our profitability appears to have increased so dramatically.

On the revenue side, growth has been primarily driven by our expansion in sports. Our spectator sports business and betting operations have played a considerable role in this increase, contributing significantly to our overall financial performance.

Imagine that we come back in two years and have this interview all over again. What goals or dreams do you hope to achieve by the time we come back for that new interview?

We are actively working to promote AI and increase our sales competition ratio from overseas businesses. While I cannot disclose specific figures at this time, our long-term vision is to develop AI to an advanced and evolved stage where it can seamlessly fulfil a wide range of roles across our operations. Additionally, we will pursue a strategy of global expansion and diversify our business by fostering the utilization of AI.

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