Agile, Assured, AGEST

Before we begin the interview, I’d like to discuss Japan’s global digital ecosystem. Looking back at history, in the 1990s Japan was a global leader in electronics and technology, led by companies such as Sony and Nintendo. However, since the late 20th century, Japan’s pace of innovation has seemed to slow somewhat. In recent years, though, we’ve seen new startups, cybersecurity firms, QA service providers, and other next-generation companies rolling out innovative services. How do you view the resurgence of Japanese companies and this shift in innovation in the global market?

As you point out, in the 1990s Japan led the world in electronics and gaming. Since then, while Japan’s excellence in hardware and manufacturing continued to attract attention, the general perception was that Japan lagged behind in bold innovation on the software side.

But in recent years that image has been changing rapidly. New-generation companies such as AI startups and cybersecurity firms are driving digital transformation, and Japan’s position in the digital economy is being reassessed. That said, I am not an industry-wide expert, so this is just my observation. In particular, with regard to digital transformation (DX), the Ministry of Economy, Trade and Industry (METI) has pointed out the problem of the “DX wall,” and I do see progress as many companies are shifting toward in-house development.

Could you explain more specifically what this “DX wall” means?

It is sometimes called the 2025 problem, or the “2025 cliff.” The idea is that outdated IT infrastructure and legacy systems will soon reach their limits, and if they are not updated, companies will suffer a serious loss of competitiveness. Japanese companies are gradually moving toward in-house development and refreshing their systems, but compared to Europe and North America, they are still lagging behind in terms of investment scale and access to information.

It will be very difficult for Japan to catch up with the levels of funding and information resources that global giants like Google and Microsoft are pouring into AI.

Then which areas do you think Japanese companies should focus on?

Rather than developing AI engines themselves, I think Japan’s strength lies in creating applications that leverage them. Services that reflect Japan’s unique culture and values are the kind of offerings that can compete globally.

How is Japan’s manufacturing tradition of quality reflected in your QA services?

Japan’s obsession with quality, honed in manufacturing, is at the core of our QA business. We may not be able to match the global giants in the AI engine race, but in application quality assurance and testing, Japan’s attention to detail becomes a brand strength and gives us competitiveness in the global market.

Could you also touch on the issue of digital debt?

Japanese companies still rely heavily on North American AI engines and continue to pay usage fees for them. This dependency can be described as a form of digital debt, and it is not something that can be easily resolved.

To address labor shortages caused by Japan’s declining and aging population, you are expanding offshore bases in Vietnam and training next-generation talent through the AGEST Academy. Could you elaborate on your approach?

Yes, supplementing human resources through our base in Vietnam is a practical step. Japan’s working-age population is shrinking rapidly, and it is said that by 2030 the IT field alone will face a shortage of about 800,000 workers. That said, in the long term I believe AI will replace much of this work.

At the academy, we are focusing on areas where AI cannot substitute—tasks that still require human judgment. Since the scope of AI services is limited, there will continue to be areas where human testing is necessary.

What makes us different from typical testing companies is that we do not focus only on downstream testing processes. Instead, we emphasize consulting that supports quality improvement from the early stages of the development lifecycle, thereby reducing the burden of testing at later stages.

Could you elaborate further on how you differentiate from competitors?

We focus on improving quality at the design and coding stages, detecting and resolving issues early. This reduces the overall workload and costs.

Regarding cybersecurity, how are you tackling complex challenges such as shadow IT?

For shadow IT, rather than offering IT asset management tools, our strength lies in early detection, isolation, and recovery from incidents. Currently, we monitor around 800,000 devices in Japan, which puts us among the top players in the country.

In terms of corporate structure, your business is divided between the gaming segment and the non-gaming segment (AGEST). What is the strategic reasoning behind this?

The gaming division’s revenue is dependent on new releases, which tends to slow growth. So we are expanding globally into entertainment services more broadly, including translation and localization. Meanwhile, we separated the non-gaming segment—software testing and cybersecurity—under AGEST, where we are heavily investing in AI and seeing rapid growth.

Since the two businesses differ in culture and talent, it is more efficient to manage them separately.

Please tell us about your AI-powered automation platform, TFACT. What role does it play in your growth strategy?

TFACT is the core of our automation strategy. Many competitors remain reliant on manual processes, so they hesitate to adopt automation out of fear it might reduce revenue. We are taking the opposite approach, moving ahead of the curve to automate everything that can be automated.

Currently, TFACT can automatically generate and analyze test cases and execution steps from test case inputs, reducing workloads by around 30%. In the future, our goal is for AI to design test cases entirely on its own, enabling full automation without the need for manuals.

We are also advancing AI-based code reviews, further enhancing the precision of quality assurance.

TFACT Logo

When introducing a new platform, how do you prepare and support clients?

First, we use TFACT ourselves to run tests and deliver results, offering clients short turnaround times. Then, when clients choose to adopt TFACT directly, we provide onboarding support and manuals to ensure smooth utilization.

Our monetization model is based on AI operating hours. In other words, clients pay for AI operating time instead of human labor.

What is your direction for R&D going forward?

Intellectual property strategy is critical. We are developing proprietary technologies and new testing methodologies and are also publishing research papers. We will continue to promote research through initiatives like the AGEST Testing Lab.

You have multiple overseas bases in places such as Vietnam, North America, and the UK. Could you share your international strategy?

The English-speaking world, especially North America, holds the greatest growth potential. TFACT is built on ten years of automation experience in Silicon Valley, and by working with our automation script team in Vietnam, we can deliver consistent services across North America, Europe, and Japan.

We have also acquired a UK-based company that develops ERP test automation tools, expanding our services into the European market.

Looking ahead, which overseas markets and M&A opportunities offer the greatest growth potential?

We plan to focus our growth in English-speaking regions, particularly North America. In addition, we are expanding in cybersecurity in Vietnam, working with local universities on talent development and collaborating with ASEAN governments on strengthening infrastructure.

Finally, as you approach your 10th anniversary in three years, what is your goal?

To become the global de facto standard in AI testing. We want AGEST to be synonymous with AI testing worldwide.

For more information, visit their website at: https://agest.co.jp/en/