Malibu, Daenerys Film City.
Today is Monday, May 8th.
At the start of a new week, Daenerys Entertainment held its regular high-level meeting, primarily focusing on the performance review of Osaka Universal Studios' first month of operation and preparations for the upcoming European Universal Studios project.
The beginning of 1995 has been filled with dark clouds for Japan.
On January 17th, a 7.2 magnitude earthquake struck the Kansai region of Japan, impacting the final preparations for the opening of Osaka Universal Studios. Fortunately, the scheduled opening was not affected. Then, on March 20th, the Tokyo subway sarin gas attack resulted in over 5,000 casualties, just two weeks before the park's grand opening. This tragedy prompted the theme park team to strengthen security measures significantly. To ensure absolute safety, Simon even dispatched a private intelligence team from the Westeros family to Japan, creating a covert security net beneath the visible security teams.
These consecutive large-scale negative events caused a significant drop in the Nikkei Index, which had been stable around 20,000 points, plunging below 15,000 in just six months—a decline of over 25%, dealing a severe blow to Japan's economy.
Despite these challenges, on April 6th, Osaka Universal Studios opened. Due to the turbulent environment, the team lowered its initial goal of 10 million visitors in the first year by 2 million and implemented various promotions to attract visitors. The new goal of 8 million visitors for the first year was only half of Tokyo Disneyland's 16 million visitors in 1994.
However, Osaka Universal Studios is smaller in scale and less ideally located compared to Tokyo Disneyland. Given the current social climate, achieving 8 million visitors in the first year would already be considered a success.
Indeed, the tough economic conditions have affected Osaka Universal Studios, but not as severely as expected. There even seems to be a hint of the "lipstick effect," where entertainment flourishes during economic downturns.
On the opening day, Osaka Universal Studios attracted 46,000 visitors, slightly exceeding expectations, demonstrating the strong demand among Japanese visitors for theme parks. The following weekend set a new record with 53,000 visitors in a single day. During the Easter events around April 16th, attendance was also impressive, with over 100,000 visitors on April 15th and 16th.
By the end of the first month, from April 6th to May 7th, Osaka Universal Studios had attracted a total of 970,000 visitors, surpassing the initial estimate of 900,000.
If this momentum continued, multiplying the first month's numbers by 12 could mean over 11 million visitors in the first year. However, such simple projections don't hold up. The initial success was largely driven by the park's newness and widespread promotions—a common "opening effect." After this effect fades, visitor numbers are expected to drop.
Even though the summer season may sustain the initial heat, the average monthly visitor count will likely decrease by 10% to 20% after the first month. Therefore, by the end of the year, the total number of visitors is expected to exceed the 8 million goal, possibly reaching between 8.8 and 9.9 million.
Nevertheless, no one is celebrating prematurely, as the original target was 10 million.
The real test will come after the first year. In its debut year, Osaka Universal Studios has a strong appeal for visitors across Japan and Asia, thanks to extensive advertising. But long-term stability is the ultimate goal.
Given the scale of investment in Osaka Universal Studios, the park needs to attract 7 million visitors annually just to break even. Of course, simply breaking even would be far from Daenerys Entertainment's expectations. The company, along with its Japanese shareholders, aims for significant profits. In 1994, Tokyo Disneyland had a net profit of over $500 million. If Osaka Universal Studios only achieves breakeven, it would be seen as a failure by many.
At the meeting, the focus wasn't on the impressive first-month visitor numbers but rather on reviewing and improving the overall performance.
At Simon's request, the park's team collected 30,000 visitor feedback forms during the first month. Although Simon had hoped for more, excessive surveys could negatively affect the visitor experience. Additionally, the various attractions collected detailed data, all of which were summarized into three categories: "Highlights," "Shortcomings," and "Expectations."
To everyone's surprise, the biggest highlight of the first month wasn't the attractions but the sales of merchandise in the park's shops.
In preparation for the opening, Daenerys Entertainment had produced a large collection of exclusive merchandise, many of which were limited editions in Japan, featuring items from the Pixar, DC, and Jurassic Park franchises. The 970,000 visitors in the first month generated ticket sales of ¥7.1 billion (approximately $68 million), but the merchandise sales surpassed that, reaching ¥8.3 billion (about $77 million). Due to high demand, many limited-edition products sold out.
In addition to tickets and merchandise, food and lodging revenue, though far below Tokyo Disneyland, still brought in ¥2.7 billion ($26 million).
In total, Osaka Universal Studios generated ¥18.1 billion ($175 million) in its first month.
Comparing this to Tokyo Disneyland, where ticket sales account for 51% of revenue, Osaka Universal Studios' ticket sales made up only 39%, while merchandise accounted for 45%—significantly higher than Tokyo Disneyland's 27%. Although food and lodging revenue lagged behind at 16%, compared to Disney's 24%, it was never a core focus for Osaka Universal Studios.
This analysis suggests that the high proportion of ticket sales at Tokyo Disneyland signals the company's decline in content quality, which has made visitors less inclined to spend beyond the entrance fee. By contrast, Daenerys Entertainment's content strength is undeniable. Many of Hollywood's blockbuster films in recent years have come from Daenerys, with top-tier IPs dominating the market, especially in Japan. This content superiority led to the impressive merchandise sales at Osaka Universal Studios.
The strong results also highlighted that Daenerys Entertainment's consumer goods department had not fully capitalized on the Japanese market, prompting Nancy Briel, who oversees this area, to announce plans for expanding product offerings in Japan.
Aside from merchandise success, the most popular attractions in the first month were the Jaws Water Park, Jurassic Park, and Pixar World.
All of this underscores that content is the backbone of a movie-themed park.
Daenerys Entertainment must continue producing high-quality films to maintain Universal Studios' long-term appeal.
While the highlights were abundant, there were also several shortcomings.
Based on feedback, the biggest issue was the park's size, which was limited due to Simon's cautious construction strategy.
Tokyo Disneyland, including supporting facilities, covers 250 acres, while Osaka Universal Studios only occupies 100 acres. This limited space resulted in overcrowded attractions, reducing visitor enjoyment and shortening their stay. Popular attractions saw long lines, which negatively affected the overall experience.
Unfortunately, this is a limitation that cannot be fixed in the short term.
While Tokyo Disneyland serves a potential audience of 30 million people in the Kanto region, Osaka Universal Studios in the Kansai region has a potential audience of only 10 million. If Osaka Universal Studios were built to Tokyo Disneyland's scale, the visitor experience would undoubtedly improve, but the return on investment would be delayed for years.
Simon's plan is to operate the park for three years before deciding whether to expand. After all, the park's primary purpose, beyond generating profits, is to promote the Daenerys Entertainment brand. As long as it doesn't turn into a prolonged money pit like Paris Disneyland, moderate expansion will be more beneficial than harmful.
For now, the team can focus on improving what can be changed. Several other issues, such as shows being difficult for Japanese audiences to understand, restaurant sizes being inadequate, and some attractions not being child-friendly, are all fixable.
This aligns with the original plan. Even the most successful theme parks, like Orlando Disney World, initially operated at a loss but improved over time by adapting to visitors' needs.
Of course, not all projects can be turned around like this. Paris Disneyland's failure, caused by poor location and overambitious construction, had no chance of recovery. Even with the opening effect, its first-month attendance was less than half of the original forecast.
In contrast, Osaka Universal Studios has fared much better. Despite the earthquake and terrorist attack, the first month's performance has been very encouraging, far from the misstep of Paris Disneyland.
Lastly, the survey's "expectations" section revealed that visitors most wanted a roller coaster.
Many of the Disney parks around the world have a popular "Indiana Jones Roller Coaster" attraction. Originally, Osaka Universal Studios had a similar plan for a ride called "Space Fantasy Train," but it was a simulated indoor experience rather than a true roller coaster. It was ultimately scrapped due to safety concerns.
Additionally, the decision to avoid a roller coaster had another reason: coasters are a staple of amusement parks worldwide. Adding one to Osaka Universal Studios could blur the line between a theme park and a typical amusement park.
Universal Studios aims to meet visitor demands but also preserve Daenerys Entertainment's core cultural identity. Losing this distinct culture would reduce the park to just another amusement park.
However, after further discussion, Simon and the team agreed that adding a roller coaster is necessary. They brainstormed a concept for a roller coaster that would take visitors through the world of Jurassic Park. Of course, this would require additional investment, and during construction, the popular Jurassic Park attraction would need to be closed, so the project will remain in the planning stages for now.
After discussing Osaka Universal Studios, the meeting shifted to the upcoming Universal Studios project in Rome, Italy.
With the location finalized
, the park will likely be called "Rome Universal Studios," similar to the rebranded "Paris Disneyland." This more specific name helps visitors easily associate the park with its location.
Though Osaka Universal Studios' smaller size has proved a limitation, Simon still doesn't plan to overextend on the Rome project like Disneyland Paris did, which sprawled over 5,000 acres.
However, compared to Osaka, Rome Universal Studios will be larger. Italy's land costs are lower, and construction costs are also cheaper. With a similar $2 billion budget, the park's area could easily be doubled in Italy.
By the time the meeting ended, it was already noon.
After lunch with Amy and others, Simon returned to his office, where he received updated stock market information for Daenerys Entertainment from the East Coast.
While the meeting was happening, North American media had widely reported on Osaka Universal Studios' first-month performance.
Daenerys Entertainment's decision to lower its internal expectations from 10 million to 8 million visitors was not disclosed. Instead, the focus was on the impressive first-month attendance of 970,000 visitors and the fact that the park was expected to surpass the 7 million visitor breakeven point in its first year, ensuring profitability.
The surge in merchandise sales was also a key talking point.
Industry insiders knew that merchandise revenue wasn't split according to the park's shareholder structure—Daenerys Entertainment took the lion's share, making it an unexpected windfall.
Given the failure of Disneyland Paris and Japan's bleak economic outlook earlier in the year, many had been pessimistic about Universal Studios' prospects.
Now, with Osaka Universal Studios poised to not only break even but also generate profits in its first year, requiring no additional financial support from Daenerys or its Japanese shareholders, the news was a major positive.
In addition, the success of Osaka Universal Studios eased concerns about Simon's insistence on moving forward with the European Universal Studios project.
By the time the East Coast markets closed at 4 p.m., Daenerys Entertainment's stock had risen by 0.7%, reaching a new record valuation of $141.9 billion, leaving Hollywood's other major studios far behind.
With the group's market value reaching new heights, Simon also officially began discussions with Amy Pascal about initiating a takeover of ABC.
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