Building in higher costs, but profits from new mobile game likely to beat our prior forecast

We fine-tune our operating profit forecasts for FY2026 and beyond, and maintain our December 2027 price target at ¥5,100, and our Overweight rating. We estimate that 3Q repeat sales will rise by 27.3% QoQ in unit terms. We expect the launch of Grand Theft Auto (GTA) and peers' new releases clustered around it to weigh on 3Q and 4Q, but we also expect 3Q to benefit from media tie-ins with two theatrical film releases, the year-end holiday season, and stronger demand for related titles following the mobile game launch. Monster Hunter Outlanders launched on October 29, currently available in regions outside China, with the China launch slated for FY2027 or later; we assume an 8% royalty rate and newly factor in operating profit of around ¥3 billion from the title in each of FY2026 and FY2027. Our FY2026 and beyond estimates now include higher write-downs in the consumer business (raised from ¥10 billion to ¥12.5 billion), IT-related costs, cybersecurity costs and other expenses, but we ra