Announcement of Acquisition of DICO Co., Ltd.

SHIFT Inc. (“SHIFT,” headquartered in Minato-ku, Tokyo, Japan; Masaru Tange, CEO and Representative Director) announced today that it has entered into a definitive agreement to acquire an 80% equity interest in DICO Co., Ltd., a provider of localization services and game software developer, (“DICO,” headquartered in Shibuya-ku, Tokyo, Japan; Emilio Gallego, Representative Director).

1. Reason for the acquisition
As SHIFT has been expanding its software quality assurance business since 2009, it has served clients in a wide variety of industries, such as financial, retail, logistics, and entertainment. Moreover, toward achieving its growth strategy, “SHIFT 1000,” which aims at ¥100 billion of net sales, SHIFT has been strategically acquiring businesses to expand and enrich its service portfolio. SHIFT has also shifted its corporate branding from “SHIFT as a software testing company” to “SHIFT as a sellable services producer,” to realize ¥100 billion of net sales. As this new catchphrase indicates, SHIFT will commit to bringing success to the businesses of its customers.

SHIFT’s revenues in the entertainment field have continued to grow since its launch, as in the enterprise field. Especially, in the first half of Fiscal Year ending August 2021 (“1H of FY08/21”), sales rose by 15% year over year (compared to the 1H of FY08/20) due to an increase in game demand amid the COVID-19 pandemic and the launch of new services in the upstream process such as “Planner Assistant.”
As SHIFT aims for further growth, it sees an opportunity in this market for two main reasons. First, many games and smartphone apps developed in Japan are released overseas, and vice versa. Second, localization* accounts for a large portion of the overall development process in terms of game development budgeting. At this point, however, SHIFT does not have sufficient human resources to grab this growing demand for localization, and this M&A deal allows SHIFT to cope with dynamic changes in demand along with the growth of the domestic and overseas entertainment markets.

DICO, which will join SHIFT Group on closing this transaction, is engaged primarily in localization and game development services. By collaborating with more than 200 native speakers of various languages, DICO not only provides quality language reflecting the “current” cultural context in each country and region, but also adequately implements quality language into games by efficiently managing original and translated texts in the development process. By having DICO on board, SHIFT Group will realize a more seamless service/operation flow throughout the development project.

DICO will expand its client base in partnership with SHIFT Group. In particular, DICO will aim for further growth by expanding into the enterprise space in the future, as well as its current core customers in the entertainment space.

Now that DICO joins SHIFT Group, SHIFT will further accelerate its growth, leveraging its new service capabilities. As its slogan of ONE-SHIFT suggests, SHIFT continues to work diligently to respond to any kinds of customers’ needs through the provision of one-stop services.

*Localization refers to the translation of software services/ products including games and smartphone apps developed in Japan into local languages to release them outside Japan, or vice versa. Specifically, there are five phases in its operation flow: 1. translation (translation from/ to Japanese to/ from other languages): 2. culturalization (modifications according to the culture, customs, and laws and regulations of the region where the product is to be released): 3. implementation (implementation of translated texts into software services/ products, and modifications of images embedded in software services/ products): 4. language quality assurance (final check on whether translated languages sound “natural” to the native speakers of the languages mainly used in the region where the product is to be released): and 5. voice recording (casting voice actors and recording of lines with that language if voice is used in the software service/ product). DICO’s main businesses fall under 1 to 4.

As DICO joins SHIFT Group, Emilio Gallego, Representative Director of DICO, has commented as follows:
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We, DICO, have been in the gaming sector since 2011. In developing this business, we have addressed the needs of numerous customers for them to expand their overseas businesses.
In the past decade, we have developed DICO with a main focus on solid and stable management from time to time. Through the efforts of our irreplaceable staff, we have established a solid presence in the industry and gained trust in a wide range of service areas. As a member of the industry, we have provided clients with both large and small types of know-how to contribute to their many products that make the world more enjoyable day by day.
While maintaining stable management up until now, we have decided to form this partnership with SHIFT after considering what strategic action DICO should as a player in an industry that is evolving rapidly and is being constantly reorganized.
DICO will step on to a new stage with SHIFT, accelerating its growth, strengthening its services, and lastly but most importantly, providing more sound services by adhering to the mission of providing quality solutions to the gaming industry.
This partnership is expected to make no major changes to DICO internally, and I, Emilio Gallego, remain as Representative Director, and continue to commit to solving industry issues and vitalizing the industry.
DICO will build a further outlook for ONE-SHIFT. It would be our great pleasure if you could welcome us warmly.

For further information, please kindly refer to the document below.
20210708_DICO_EN