🏞️Applications

The role of Applications is to create entertainment content that serves as a point of contact with users. In particular, we take on the challenge of creating "new age" services that have yet to be created by incorporating web3 technologies, elements, and ideas.

These services will not exist independently but will be organically combined into a service lineup to promote a strong media mix strategy. This will enable the creation and enhancement of IP in the applications provided by SMP.

Entertainment Service of the New Era

We analyzed the impact of Internet technologies up to Web2 on the entertainment sector based on "". As a result of this analysis, we have the following hypotheses.

First, the advent of Web2 services greatly augmented online communities and communication between individuals. The consumption style of entertainment has also changed, with the aspect of content consumption within communities becoming stronger rather than individual consumption. Specifically, the rise of social networking services has led to the sharing of experiences, and today's online services have de facto established real-time communication such as live-streaming.

While online communities make it easier to make friends with common interests, they also increase the amount of time needed to keep up with the conversation, making it harder for individuals to utilize their free time. While those who are knowledgeable about content are more likely to be admired in online communities, only a small percentage of the population is eligible for such admiration, and many people continue to have difficulty satisfying their need for personal recognition.

As a reaction to this situation, the value of experiences in the pre-Web2 services era, such as "real communities and experiences" and "human connection" is now being reevaluated.

Therefore, the "new age" service we are seeking is an entertainment service for a new age beyond the spiral development, integrating the aspect of increasing "online community and communication among individuals" with the values of "real-life community and experience" and "bonding”. There, we will try to create new experiences using new elements of web3, such as NFT and RWA.

As we indicated in Chapter 2, our definition of "entertainment" is not limited to entertainment in the narrow sense of the term, but is an entertainment service in the broad sense that provides an essential role in entertaining people and providing pleasant experiences. Of course, there are limits to comprehensively developing services in all areas from the outset, so we plan a process of gradual development starting with narrowly defined entertainment services centered on games, which have a high affinity with the DMM Group's existing businesses.

In terms of more detailed development service genres, we plan to create content in the following four major genres.

GameFi

For the time being, GameFi will be the main service offered in SMP Applications. There are two main reasons for this.

1. GameFi is already a market.

2. DMM Group has the largest PC online game platform in Japan and already has a successful model for the game business.

These are the two main reasons.

We provide a variety of GameFi using three delivery methods: in-house development by DM2C Studio (referred to as 1st), joint development with other companies (referred to as 2nd), and development and publishing by 3rd party companies (referred to as 3rd).

In addition, the following three user groups are assumed for each content.

1. Users unfamiliar with web3 who are (almost) new to GameFi

2. Users who use GameFi and various other web3 content primarily for their own benefit

3. Users who can lead the community and add value to the content

The goal is to provide services to these different user groups that meet their individual needs.

For example, for users of the first type, we provide the same UX (User Experience) as when they start playing a traditional online game or social game, and we do our best to eliminate the elements that tend to make playing GameFi a hassle. In other words, users don’t have to interact with wallet UIs until they reach the point that they have to purchase cryptocurrencies and NFTs. Specifically, we envision a UX that makes users aware of the wallet only when converting game points collected through gameplay into crypto assets, or when selling NFTs.

As shown in the table below, there are four types of games in terms of development scale and game characteristics. We plan to develop all types of titles for the first title, and we can accept all types of titles for the third title as well.

Type	Development Scale	Features
High-end	Large	Skill + immersive Games
Mid-core	Intermediate	Skill games
Mini-game	Small~Intermediate	A game built on light & luck elements
Hyper-casual	Small	Gap-time entertainment

Services With Good Synergy with Games

In the future, we plan to offer a wide range of new-age entertainment services, but first we will aim to offer a lineup of entertainment services that are highly compatible and organically combined with GameFi, which will be our main axis for the time being. Specifically, we see our target as entertainment services that can develop a media mix centered on the same IP, such as animation, action figures, manga, novels, plays, and movies.

Solving Social Issues・B to B Solutions

In a broader sense, we are looking to develop and provide services that include solutions to social issues (B2B solutions) as entertainment services in the sense of "mutually supporting each other". For example, we have in mind a new web3 business that will work with the DMM Group's existing regional development business to address depopulation in rural areas of Japan. Other potential areas for business development include the education sector and renewable energy-related areas, where the DMM Group's assets and knowledge (DMM Group business information) can be utilized.

Finance Services

The DMM Group is also considering introducing web3 finance functions and services, leveraging its knowledge and assets in the finance business. DMM Bitcoin, the DMM Group's crypto asset exchange in Japan, has been providing crypto asset trading services since January 2018, it is the No. 1 provider of leverage trading in Japan (as of October 2023) in terms of the number of stocks it handles.

The following table summarizes the specific functions under consideration.

Function	The function to exchange legal tender and crypto assets. Specifically, the exchange functionality will include the ability to purchase crypto assets with a credit card and receive rewards for playing on an exchange account.
Token swap	Crypto-to-crypto asset exchange function. This function is available by having an account at crypto asset exchanges, including DMM Bitcoin, which is a member under the DMM group.
- Certified Issued	KYC is becoming increasingly necessary for various financial services from the perspective of AML (Anti-Money Laundering) countermeasures, etc. On the other hand, it is inefficient to perform KYC for each individual service. Since DMM Bitcoin conducts KYC for its customers, it is expected to provide a solution to the above issues by issuing SBT as a certificate that a certain level of KYC has been completed.
Lending	We plan to offer a lending service using DeFi, which runs on DM2P contracts.
Exchange token-like function of DM2P	When we develop DEX/DeFi in the future, we plan to use DM2P as a token that behaves like an exchange token, such as incorporating an advantage in terms of transaction fees.

For all the services in all the genres introduced so far, as well as GameFi, we will widely accept not only in-house development by our company but also the provision of 3rd-party titles and services.

We believe that by involving outside businesses and individual creators who are not confined to a single genre of business, it will be possible to achieve significant development of SMP.