For every step in the innovation of technology, there have been early adopters who mostly find success, late adopters who find mostly find moderate success, and non-adopters who mostly die out. Introducing one of the leading investors in the future, Japan’s very own Colopl Inc. (TYO:3668) is an entertainment company focused on mobile games and the leading developer of Virtual Reality games.
The most famous example of failure to adopt a new technology would be the classic tale of Kodak, which was once the world’s leading film photography brand. With the advent of digital photography, Kodak failed to accurately gauge the significance of the new technology and thus have now faded into oblivion.
In today’s information age, the early bird truly gets the worm. In the advent of social media, Facebook came first and is now dominating the web platforms. Similarly, with the mobile messaging over data, Whatsapp is the leading messaging app with the most number of active users throughout the world.
The same is to be expected of gaming’s newest technology, virtual reality. In fact, the gaming VR market is already estimated to be valued at US$5 billion according to a Superdata report. Having just established the largest virtual reality fund of US$50 million for companies working on head-mounted displays, games and 360 degree content, development tools and equipment, and distribution platforms, Colopl Inc. is taking the lead in the VR gaming industry.
Virtual Reality: A Worthy Investment
Represented by its mascot, Kuma the brown bear, Colopl is an abbreviation for the original name of the company, “Colony Life Plus.” The company focuses on high-performance mobile phone business. The company’s mission is simply “Entertainment in Real Life,” and the company has focused on bringing its customers more and more content-rich entertainment.
The company’s products and services revolve mostly around mobile games. Its business is segmented into four parts: domestic mobile games services, overseas mobile games services, VR service, and other services.
Even though it is mainly a smartphone-based business, Colopl Inc. is keeping a close watch and has already taken initiatives to develop games for the VR market.
There are two main reasons why InvestAsian believes that you should invest in Colopl Inc. First of all, it is very profitable. With a total revenue of over 23 billion yen (around $220 million) the company boasts an incredibly high net profit margin of 26.8%. The high profit margin is due to the low cost nature of distribution of digital content, something that the firm has taken to great lengths.
Secondly, the company has great returns and attractive valuations. Performance has led to a ROI and ROE of over 50%, along with an ROA of 36%. With its investment into VR gaming as well, which is expected to pay off, the company looks to be even more profitable in the future. All of this along with low Colopl’s P/E ratio of 12 makes it a great buy for your portfolio.