On May 14, it was announced that hololive Earth would be going offline after just one year of service. Given that the metaverse project had never taken root among core fans, this decision was not exactly surprising, but the release of Cover's earnings for 2026 on the same day made it clear that this was the least of their problems.
First of all, Cover released a myriad of documents on May 14 to coincide with the end of the financial year. There’s the standard report for a public company in Japan, an explanatory slideshow with all of the points illuminated, another slideshow with an overview of the company’s strategy going forward, as well as a notice regarding the buyback of some shares. All of these are par for the course, except for another document that details specific losses incurred by the company in 2026: this includes the shutdown of hololive Earth, announced beforehand.
What this document reveals is startling. By halting the development of hololive Earth and shifting its staff members to different projects, Cover is reporting a 3.1 billion yen loss (around 2.8 million USD) in the software business for 2026. In addition, gross profit for the whole company was 13.9% less than expected as products made for the hololive online store were discounted and sold at a lower price. No concrete reason is given for this beyond “talent line-up” and “changes in the community landscape”, but it can be inferred that goods related to graduated talents struggled to sell as many high profile cases hit headquarters.
Even so, it’s not all doom and gloom. Not only will CEO Motoaki Tanigo and CTO Yousuke Kaneko give back two months of their salary, the standard report highlights several areas of encouraging growth for the company. Licensing and tie-ups recorded the biggest jump in sales: 25.3% compared to last year as hololive talents continue to collaborate with anything and everything under the sun. Sales from concerts and events are also up by 18.7%, with the hololive STAGE world tour, ReGLOSS’ first live in December 2025, as well as hololive SUPER EXPO 2026 given as the main drivers of this.
What’s particularly striking is the performance of the hololive official card game. Launched in 2024 with the help of Bushiroad, it has continued to make inroads domestically and abroad as the English version launched just last year. Cover’s own presentation reveals that revenue from the game has now topped 7.2 billion yen (around 45 million USD), twenty million packs have been sold, and it now boasts 2% market share. As a result, the entire merchandising sector has seen a 15.6% rise in sales, despite the aforementioned problems with excess stock.
Nevertheless, it’s hard to ignore the fact that revenue from the livestreaming and content business is down by 2%. A virtual talent company is nothing without its talents, meaning that high profile graduations such as Hiodoshi Ao in October 2025 and Amane Kanata in December 2025 have left huge gaps in the company’s line-up. FLOW GLOW and ReGLOSS are given as examples of new faces on the up, but time is ultimately needed to make up for the losses.
In general, Cover posts that it now sees itself as moving away from a “growth phase” towards an “efficiency phase” with a focus on revenue and profitability. To this end, it proposes three initiatives: a new talent ecosystem to support current members and cultivate new ones, a strategic shift away from the metaverse and towards better live content, as well as investments into mixed media projects on a global scale. Growth is expected to slow in the next period as these changes come into effect before taking off again in a manner similar to the halcyon days of 2020 on an even higher level.
Leaving aside the issue of whether or not Cover’s forecast is accurate or not, the fruits of these initiatives are already starting to enter the public eye. The mekPark project appears to be a clear attempt to widen the capture window for new talents under the guise of “training”, while hololive Earth’s termination and subsequent loss is a clear example of the metaverse’s fall from grace. Furthermore, hololive Dreams is by far the biggest mixed media project that Cover has ever embarked upon, complete with a simultaneous English release.
That last point feels particularly important. While virtual YouTubers exploded in popularity during COVID partly as a result of social isolation, some of that energy was lost once mixing began again. In terms of popular culture, the focus also seemed to focus from VTubers to mobile games: first with Umamusume: Pretty Derby, then Blue Archive, then Gakuen Idolmaster. Of course, trading cards also saw a huge spike in popularity, resulting in an unprecedented number of new games launching in the past couple of years.
If Cover’s intuition is correct, then expanding hololive into the mobile gaming space could be a home run. The fact that the hololive trading card game is doing so well is already proof that virtual YouTubers can continue to thrive in a new socio-economic environment, while live events continue to prove important in providing fans with a space to thrive and socialise. By way of a conclusion, these earnings paint a picture of a company in the midst of a drastic transformation: one that could make or break its position as the king of virtual content.
