Well Q3 is the holiday season, correct? It's not a question of why they suddenly drop off but how many streams and merch that they make bank on Q3. I don't really follow their merch and event cycle.
Please correct me if I'm wrong they are counting November, December and January as Q3, right?
Yes, Q3 is November, December, and January. The YoY decline from 2023 Q3 to 2024 Q3 can mostly be explained through merch.
Nominally they were down 787m YoY. Their livestreaming revenue was down by 104m but that's minimal in the grand scope of things, especially when their revenue from promotions was up by 33m to offset that. NijiEN has no events so that leaves only merch. Notice how Q3 2023 had 1,952m in revenue but 1,415m (72.5%) was commerce. Meanwhile Q4 2023 had 1,165m in revenue but only 700m (60.1%) was commerce. This drop in revenue from commerce makes up 90.1% of their revenue loss YoY.
Their 2023 Q3 (which is 2022 November+December and 2023 January) is when they debuted XSOLEIL. Their merch had a lot going during that time because it was their 1st anniversary of Luxiem, new outfits for Ethyria, New Years merch, and the half anniversary for ILUNA. So their 2023 Q3 was supercharged by all sorts of merch drops and a new gen (and remember, XSOLEIL was the last gen to have any hype behind it).
As for their 2024 Q3, they lost Nina, Mysta, Yugo, and Zaion. Aside from the fact that Mysta was an obvious money printer, you have to consider the effect that losing a gen member has on merch for all of them. For example, look at Luxiem with its 5 members. Not only are you losing merch revenue from Mysta no longer around, you're going to see a 20% drop to the revenue from "full gen merch purchases" when someone leaves. Then there's the whole Zaion doc that brought up that talents only get 2% of merch revenue, so people stopped buying merch as much and started buying voicepacks more often. I'm willing to bet this simple change really fucked with NijiEN because their cheaply made copy-paste merch where talents only get a 2% split from was a huge revenue stream for NijiEN.
After Cover's financial results came out this week, everyone was impressed with how much money Cover was banking from merch but their shit only made up 41.4% of their total revenue. If you look at NijiJP for 2024 Q3, they had 6,531m in revenue. The revenue from commerce for NijiJP was 3,624 or 55.5% of their total revenue. Companywide (NijiJP+EN) Niji's entire business strategy appears to have been "MERCH MERCH MERCH" while giving the talents a miniscule cut as commerce made up 56.2% of their total revenue.