Mitsubishi UFJ Financial Group, Inc., its consolidated subsidiaries MUFG Bank, Ltd. (“MUFG Bank”), and Mitsubishi UFJ Trust and Banking Corporation (“Mitsubishi UFJ Trust and Banking”), Kodansha Ltd. (“Kodansha”) and CREDEUS Inc., (“CREDEUS”) announced today that they have launched a new initiative for creating Japanese entertainment (“entertainment”) titles. This initiative is the first of its kind in Japan to bring together financial and Japanese entertainment companies. It aims to create a new way of raising funds for the creation of entertainment titles that are the pride of Japan, and to deliver high-quality entertainment produced by talented Japanese creators to fans around the world. Through this initiative, we aim to become an option for creating new works that enables the Japanese entertainment industry to advance into the future. Background Japanese entertainment titles have fans all over the world, with overseas sales in 2023 estimated to have expanded 128% from the previous year to 5,776.9 billion yen (according to a survey by Human Media Inc.). This achievement is the result of the many years of work by Japanese creators, and it is said to be an investment genre of great interest to foreign sovereign wealth funds. On the other hand, in our digital society, there is borderless competition that transcends national boundaries across industries, including the entertainment industry. Overseas, entertainment companies receiving massive funding from national governments and major corporations are rapidly emerging. In addition to conventional approaches, new funding methods and business models are needed for their productions to be able to compete with Japanese ones. Entertainment is a promising industry in which Japan has a strong global presence. To survive global competition, it is important to establish new alliances that transcend industry boundaries. Outline of the initiative MUFG, Kodansha, and CREDEUS aim to build a system and business model for creating new entertainment titles by leveraging their respective strengths. 1 In this initiative, WORKS Production Role (CK WORKS, a limited liability company established by Kodansha and CREDEUS) will play the role of creating world-class titles, and WORKS Raising Role (Japan Creative Works No. 1 Investment LP organized and managed by MUFG's Mitsubishi UFJ Trust and Banking with MUFG Bank among its investors) will raise and provide funds for the creation of entertainment titles. Outline of the initiative Features of the initiative The initiative's WORKS Raising Role is characterized by all funding being provided for theatrical live-action film series based on works published by Kodansha, with transparent management of production funds through a GK-TK scheme (an investment scheme combining a limited liability company and a silent partnership). Meanwhile, the WORKS Production Role will make it possible to secure substantial funding from the start of production on the first film in a series, enabling even projects that require a large production budget to be produced smoothly, limiting gaps between films to deliver them to fans while their enthusiasm is hot. We are also planning to set up a reward system for successful creators. This initiative is unprecedented for both the financial and entertainment industries in scale and the scheme used. It was realized through collaboration among MUFG's subsidiaries MUFG Bank and Mitsubishi UFJ Trust and Banking, Kodansha, and 2 CREDEUS, with a common objective. By combining finance and entertainment, we aim to create new value. Comments from each company Hironori Kamezawa, President & Group CEO, MUFG “MUFG's purpose is ‘Committed to empowering a brighter future,'and we are working to realize this goal by leveraging our extensive network and diverse solutions to maximize our ability to connect. “Japan's entertainment industry has created content such as manga, films and games, and thanks to a unique ecosystem where each title cascades higher value to others, has a strong competitive advantage . As a result, it is anticipated that it will grow into an industry with a global following and be a driver of the Japanese economy in the future. “MUFG will undertake this new opportunity with the aim of providing new value beyond the framework of finance, and will contribute to the Japanese entertainment industry's next leap by allowing talented creators to continuously create attractive content to empower a brighter future.” Yoshinobu Noma, President, Kodansha “With our corporate philosophy of ‘Inspire Impossible Stories,'Kodansha believes in the power of stories that transcend time and borders, and has worked alongside all kinds of creators. Our mission is to inspire discovery and creativity, and to deliver the best possible stories to people around the world. “This initiative, with the cooperation of creators, brings together the strengths of the finance and entertainment fields, and I believe it can be a means to survive competition with overseas works that boast large production budgets. “Kodansha will continue to undertake new initiatives and pave the way for the future of the content industry.” Shinzo Matsuhashi, CEO, CREDEUS “Japan's story telling culture is one of the greatest in the world. Creative manga and anime have fans all over the world, and the Japanese spirit can be found in the beautiful language and storytelling throughout novels and live-action images. “Globalization has provided dramatic benefits to the entertainment world, as films from all over the world have become accessible to everyone, anytime. This has had a huge impact on creators in Japan, and top creators in other countries have also been inspired by Japanese content to create new works. 3 “As a production company, we at CREDEUS have a responsibility to be the recipients of this chain of creative chemical reactions that is proceeding at an impressive rate. “Hollywood and South Korea are spending huge amounts of money to pursue the latest video technology and produce a succession of high-quality titles. However, if Japanese production budgets remain low because of market size, it will be left behind. Believing that creating a good Japanese story will see it accepted by the world, I have taken on the challenge of creating large-scale series such as Kingdom, Golden Kamuy and The Silent Service. I have had excellent production partners for these films, but have always struggled with funding and the approval process for my next project. “I believe this initiative will breathe new life into the Japanese entertainment industry. I hope that the titles it creates will reach the world, and that the creators who made them will be respected. I hope that the Japanese video production industry will prosper, and that it will become a major source of income for the country we can pass down to our children. I am very excited to take this big step with our new partners.”