Management
Interview with the President
Would you provide an overview of the results for the first nine months of FY2023.3?
(April to December, 2022), we recorded net sales of ¥743.1 billion and operating profit of ¥106.2 billion. We responded rapidly to changes in the operating environment. We also worked to advance a variety of initiatives to forge broader, deeper, and more-multifac- eted connections with fans, including the reinforcement of core IP* media activities and the strengthening of collaboration among products and services. As a result, we achieved higher sales and profits in each business. By business, the Toys and Hobby and Amusement businesses achieved record-high results for the first nine months of a fiscal year. Further-more, due to the depreciation of the yen, the foreign exchange gain related to transactions denominated in foreign currencies had the effect of increasing recurring profit. In addition, profit attributable to owners of parent increased year on year.
Bandai Namco Holdings Inc. has announced its results forthe first nine months of FY2023.3 (April to December, 2022), as well as a share split and the new officer system from FY2024.3. In this issue of the newsletter, President Masaru Kawaguchi discusses these announcements.
Kawaguchi: In the first nine months of FY2023.3
Achievement of higher sales and profits in all businesses in the first nine monthsof FY2023.3
President and Representative Director, Group CEO
Please discuss the circumstances in each business. What is the situation in the Dig-ital business?
Kawaguchi: In home video games, repeat sales of existing titles were favorable, centered on overseas markets. These included ELDEN RING, a major title that was launched world-wide in the previous fiscal year. In addition, solid sales were recorded by multiple new titles. Looking at network content, DRAGON BALL and ONE PIECE, which are major titles, recorded favorable results due to the release of films, buzz surrounding IP for which collab- orative initiatives were implemented, and ongoing measures for customers and others.
* IP: Characters and other intellectual property
With consideration for the market environ- ment, which was characterized by intensifying competition, this business recorded a valua- tion loss on certain work-in-process and took other steps in order to support the provision of quality-focused titles.
What are the circumstances in the Toys and Hobby business?
Kawaguchi: We were affected by rising prices of raw materials and fuel due to the depreci-ation of the yen. However, sales of products for the mature fan base, such as Gundam plastic models, collectible figures, and character lotter y products were favorable worldwide.This was attributable to the strengthening of sales/ marketing initiatives and the reinforcement of product lineups. Moreover, in addition to estab- lished IP toys, popularity was recorded by card products, such as the ONE PIECE trading card game and Mobile Suit Gundam series digital cards. Other popular products included confec- tionary, such as Charapaki, and capsule toys.
What is the situation in the IP Production business?
Kawaguchi: With the objective of strengthen- ing IP creation, we changed our organizational structure and consolidated resources and know-how regarding visual products, music, and live events. Under the new structure, we rolled out initiatives related to a wide range of IP, such as the Mobile Suit Gundam series, the Love Live! series, That Time I Got Reincar-nated as a Slime, and BLUELOCK. These initiatives included producing visual works, selling packaged visual and music products, implementing online distribution, holding live events, and conducting licensing business activities. Also, due to the relaxation of restrictionson activities in Japan, the live event business and the GUNDAM FACTORY YOKOHAMA business were up year on year. Online distribution of visual works and overseas IP initiatives also had favorable results.
What are the circumstances in the Amusement business?
Kawaguchi: We suspended operations at some facilities in certain regions due to the spread of COVID-19, and utility costs increased as a result of higher fuel prices. Nonetheless, the facilities business recovered. For example, sales at existing amusement facilities in Japan were up year on year. Also, the amusement machine sales business had favorable results around the world. In the Amusement business, we will continue working to increase effi-ciency; to advance initiatives that leverage Bandai Namco's distinctive strengths, such as developing facilities in coordination with other Group products and services; and to strengthen our earnings platform.
Please discuss the results forecasts for the full fiscal year.
There is no change to the revised figures provided when we announced our results for the first half-net sales of ¥940.0 billion and operating profit of ¥128.0 billion.
We will face fluctuations, such as dramatic changes in the external environment, but by advancing the main strategies in the Mid-term Plan-IP axis strategy, personnel strategy, and
(Continued on next page)
March 2023 No.71
1
Management
Interview with the President
(Information in this section is as of the end of February 2023.)
Aiming for wide-ranging connections with shareholders through the share split
sustainability-under the ALL BANDAI NAMCO concept, we will work to enhance our sense of unity and comprehensive strength and strive to achieve these targets.
We will consider the year-end dividend for FY2023.3 in accordance with the basic policy for shareholder returns.
The Company has announced a share split*. Would you discuss the objective of the split?
Kawaguchi: Each share of stock held by share- holders who are listed or recorded in the final shareholders' register on the record date of March 31, 2023, will be split into three shares.
In accordance with Bandai Namco's Purpose, "Fun for All into the Future," we will strive to foster broad, deep, and multifaceted connec- tions with our various stakeholders and communities around the world, including IP fans, business partners, and Group employees.
The purpose of the share split is to further increase the liquidity of the Company's shares by reducing the price per investment unit, to form broader connections with shareholders, to foster a deep understanding of the Group among shareholders, and to encourage share- holders to become long-term fans of the Group.
*For more information, please refer to the Company's web site.
DRAGON BALL Legends
Would you discuss the focus topics for each business? First, please describe the topics for the Digital business.
Kawaguchi: Due to long-life initiatives for home video games and network content in recent years, we have seen the importance of development focused on quality and of ongoing connections with fans. Currently, in the home video game business, we are planning to launch a product in the Tekken series that is expected to create buzz in the e-sports sector. Also, as we did with ELDEN RING, we are planning to launch a new product in the ARMORED CORE series in a joint development with FromSoftware Inc. Furthermore, we are also currently developing titles originating with overseas studios. Targeting quality-focused title development, we are moving forward with such initiatives as estab-lishing development studios and transitioning companies into subsidiaries around the world. At these studios, we will build frameworks that align approaches with those in Japan, while also promoting individuality. In addition, rather than handling everything within the Group, to forge connections with a wide range of partners and creators, we are strengthening our relationships outside the Group and using our own funds to invest in start-ups. Going forward, we will use a variety of approaches to implement quality-focused development.
Looking at IP metaverse initiatives, develop- ment is making smooth progress, and we plan to implement a closed test of Gundam plastic model colonies within this fiscal year. Together with a variety of partners, we will strive to make these initiatives into community venues that are linked with fans.
Plastic model of the Gundam that played the lead role in Mobile Suit Gundam:
THE WITCH FROM MERCURY HG 1/144 Gundam Aerial
©バードスタジオ/集英社・東映アニメーション ©Bandai Namco Entertainment Inc.
2 BANDAI NAMCO NEWS
What are the trends in the Toys and Hobby business?
Kawaguchi: Looking at established IP, such as Mobile Suit Gundam, DRAGON BALL, ONE PIECE, Ultraman, and Digimon, we were able to expand product roll-outs, not just in Japan but world- wide. With Mobile Suit Gundam, the plastic model of the Gundam that played the lead role in Mobile Suit Gundam THE WITCH FROM MERCURY recorded strong results. Among the HG TV series lead role Gundam versions, it had the highest initial sales in history, and it currently continues to be popular. In addition, the ONE PIECE trading card game has also become a popular product worldwide.
In the same business, the categories of cards, confectionary, and capsule toys are also record- ing growth. In order to further expand the scope of business activities, a company that handles the stuffed toy business was made into a sub-sidiary. Through the establishment of this type of wide-ranging lineup, we will expand overseas development opportunities.
Going forward, we will strengthen e-com-merce, reinforce collaboration and online distribution for IP works, and implement merchandising for IP originating overseas. To accommodate this business expansion, we will also work to strengthen our production system for items that are generating solid results. In regard to the strengthening of e-commerce, we plan to launch a new in-house e-commerce site in Europe in FY2024.3.
What is the future direction of the IP Pro-duction business?
Kawaguchi: We are providing a wide variety of works, including both those produced in-house and those created through collabora-tion with other companies. Looking at Mobile Suit Gundam, which is an estblished IP series, Mobile Suit Gundam THE WITCH FROM MERCURY
©創通・サンライズ・MBS
has acquired new fans, such as young people and women, and was able to generate sub- stantial buzz. In addition, the new film version of That Time I Got Reincarnated as a Slime has become a hit in 22 countries and regions where it was opened, and furthermore, BLUE- LOCK, which was favorably influenced by the buzz around the World Cup, became a focus of attention after ongoing broadcasts. We anticipate further growth in in-house products and services as well as in the provision of licenses to other companies.
Looking at new IP, we are advancing the pro-duction of an anime for SAND LAND, a comic by Akira Toriyama, and a Groupwide SYNDUALITY project involving collaboration between game and anime initiatives.
In addition, due to the relaxation of restrictions on activities, we also have high expectations for live events. At THE IDOLM@STER and Love Live! events held in February, we lifted the restriction on vocal support for the first time since the start of the COVID-19 crisis. We will strive to provide new value by leveraging our know-how in the fusion of digital and physical elements, which we acquired by addressing demand associated with people staying at home.
What are the trends in the Amusement business?
Kawaguchi: Due to such factors as the market recovery resulting from the relax-ation of restrictions on activities and the roll-out of original initiatives for collab-oration among Group IP, products, and services, the amusement facility business is recording favorable results. On the other hand, this is a business that is highly sus-ceptible to the influence of changes in the operating environment, and currently we face such factors as rising utility costs. Accordingly, going forward we will work to achieve both the development/provision of content that leverages our distinctive strengths and the implementation of ini-tiatives targeting increased efficiency. At this point, family-oriented facilities in shop- ping centers are the core of our operations in this business, but going forward we will open different types of large-scale facilities. We plan to open one in Akihabara in March and another in the Tokyu Kabukicho Tower
in Shinjuku in April. Also, we will open two Bandai Namco Cross Store facilities in March.
These stores offer a collection of official shops for Group products and services.
Looking at amusement machines, the CLENA 3, a new model prize machine that was
TV anime BLUELOCK, which was favorably influenced by the buzz around the World Cup, was a focus of attention.
©金城宗幸・ノ村優介・講談社 /「ブルーロック」製作委員会
launched at the end of 2022, is recording favor- able results. Going forward, we will continue taking steps to address changes in the fan base. These will include updating popular established series, such as the Mobile Suit Gundam VS. series.
(Continued on next page)
Illustrations of Bandai Namco Cross Store Tokyo (left) and Bandai Namco Cross Store Osaka Umeda (right), which will open in March 2023
Consolidated Financial Results in First Nine Months of FY2023. 3
PAC-MAN™& ©Bandai Namco Entertainment Inc.©2023 Sun-Star Stationery Co., Ltd.
(million yen)
Net Sales | Operating Profit | Recurring Profit | Profit Attributable to Owners of Parent | |
Results | 743,187 | 106,203 | 116,961 | 84,444 |
Year-on-year changes | 118.3% | 115.2% | 122.4% | 136.9% |
Full-year Consolidated Results Forecast for FY2023.3 and Results in Previous Year (million yen)
Net Sales | Operating Profit | Recurring Profit | Profit Attributable to Owners of Parent | |
Revised projections* (as of November 2022) | 940,000 | 128,000 | 139,000 | 95,000 |
Results in previous year (April 2021 to March 2022) | 889,270 | 125,496 | 133,608 | 92,752 |
* Forward-looking statements are based on a variety of assumptions and are not promises or guarantees that the stated future forecasts/ measures will be realized.
Note: These figures were disclosed on February 8.
Consolidated Financial Results by Segment in First
Nine Months of FY2023. 3 (million yen)
Business Segment | Net Sales | Segment Profit |
Digital | 288,571 | 46,642 |
Toys and Hobby | 345,128 | 52,953 |
IP Production | 55,023 | 6,350 |
Amusement | 75,478 | 6,936 |
Other | 23,529 | 1,140 |
Elimination and corporate | (44,543) | (7,821) |
Consolidated total | 743,187 | 106,203 |
March 2023 No.71
3
Management
Interview with the President
Working together under the ALL BANDAI NAMCO concept to aim for sustainable growth
Please discuss the Group's officer system for FY2024.3.
Kawaguchi: There will be some changes from April. Nao Udagawa, who is currently the Rep- resentative Director at Bandai Spirits Co., Ltd., will become the Representative Director at Bandai Namco Entertainment Inc., which is the business management company for the Digital business. Ms. Udagawa is well versed not only in the Toys and Hobby business but also in the Digital business. We expect her to leverage her wide-ranging business experience in the Digital and Toys and Hobby businessesand to advance collaboration under the ALL BANDAI NAMCO concept. Yasuo Miyakawa, who is currently the Representative Director at Bandai Namco Entertainment Inc., will leverage his experience in a range of busi-nesses to provide advice as a senior adviser at Bandai Namco Holdings Inc.
Do you have a message for readers?
Kawaguchi: For Bandai Namco to advance to a new stage and record sustainable growth in global markets, we need to look ten years ahead and then work backwards from thatpoint in order to determine what we need to achieve over this year and the three-year period of the Mid-term Plan. Then, on that basis, we will need to implement the various initiatives that we formulate. The Group's touch-points in both physical and digital busi- nesses give us distinctive strengths, and we will strive to leverage those strengths, connect with fans around the world, and work together to create the future. To that end, we are aiming for sustainable growth by working to build businesses in a unified manner under the ALL BANDAI NAMCO concept. We believe that the future of the Bandai Namco Group will con-tinue to be filled with exciting developments.
Directors at principal companies in the Bandai Namco Group
(as of April 1, 2023)
Bandai Namco Holdings. Inc.
* Following the General Meeting of Shareholders scheduled for June 2023
President and Representative Director | Masaru Kawaguchi |
Director | Yuji Asako |
Director | Nobuhiko Momoi |
Director (Part-time) | Nao Udagawa |
Director (Part-time) | Kazuhiro Takenaka |
Director (Part-time) | Makoto Asanuma |
Director (Part-time) | Hiroshi Kawasaki |
Director (Part-time) | Shuji Ohtsu |
Director (Part-time, Outside) | Koichi Kawana |
Director (Part-time, Outside) | Toshio Shimada |
Director (Audit and Supervisory Committee Member) | Masataka Nagaike |
Director (Audit and Supervisory Committee Member, Outside) | Toru Shinoda |
Director (Audit and Supervisory Committee Member, Part-time, Outside) | Satoko Kuwabara |
Director (Audit and Supervisory Committee Member, Part-time, Outside) | Takayuki Komiya |
Nao Udagawa
President and Representative Director (planned)
Bandai Namco Entertainment Inc.
Hiroshi Sakakibara
President and Representative Director (planned)
BANDAI SPIRITS CO., LTD.
4 BANDAI NAMCO NEWS
Bandai Namco Entertainment Inc.
President and Representative Director | Nao Udagawa |
Managing Director | Koji Fujiwara |
Director | Toru Konno |
Director | Akira Togashi |
Director | Masayuki Ishii |
Director (Part-time) | Daisuke Uchiyama |
Director (Part-time) | Arnaud Muller |
BANDAI CO., LTD.
President and Representative Director | Kazuhiro Takenaka |
Director | Takahiro Mizuno |
Director | Shinjiro Kaji |
Director | Akira Togashi |
Director | Keisuke Furusawa |
Director | Noriko Fujita |
Director (Part-time) | Nobuhiko Momoi |
Director (Part-time) | Taro Tsuji |
Director (Part-time) | Daiki Miyatani |
BANDAI SPIRITS CO., LTD.
President and Representative Director | Hiroshi Sakakibara |
Director | Takahiro Mizuno |
Director | Keisuke Furusawa |
Director | Noriko Fujita |
Director (Part-time) | Kotaro Hama |
Director (Part-time) | Kazuhiro Takenaka |
Bandai Namco Filmworks Inc.
President and Representative Director | Makoto Asanuma |
Vice President and Director | Satoshi Kono |
Managing Director | Shin Sasaki |
Director | Kazunori Goka |
Director | Naoya Masaki |
Director | Kimikazu Ueyama |
Director (Part-time) | Yoshitaka Tao |
Director (Part-time) | Yuji Asako |
Director (Part-time) | Koji Fujiwara |
Director (Part-time) | Keisuke Furusawa |
Director (Part-time) | Yoshiyasu Horiuchi |
Bandai Namco Music Live Inc.
President and Representative Director | Yoshitaka Tao |
Managing Director | Takaaki Suzuki |
Director | Masayuki Ozaki |
Director | Manabu Kuroda |
Director | Atsushi Arai |
Director (Part-time) | Kimikazu Ueyama |
Director (Part-time) | Kai Tanaka |
Bandai Namco Amusement Inc.
President and Representative Director | Hiroshi Kawasaki |
Managing Director | Seiji Kagawa |
Managing Director | Haruo Iwayaguchi |
Director | Yoshiyasu Horiuchi |
Director | Hiroshi Ikeda |
Director (Part-time) | Takahiro Mizuno |
New appointmentChange in position
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Bandai Namco Holdings Inc. published this content on 24 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2023 07:35:07 UTC.