NEWSLETTER

December 2017

BANDAI NAMCO Holdings Inc.

BANDAI NAMCO Mirai-Kenkyusho
5-37-8 Shiba, Minato-ku, Tokyo 108-0014

Management
Interview with the President

Being a Group That is Full of Personality and
Fixated on Quality and Appeal to Provide
Dreams, Fun and Inspiration around the WorldThe BANDAI NAMCO Group announced consolidated operating results forthe first half (April to September 2017) of FY2018.3. Net sales reached record
highs for H1 performance, with operating profit also surpassing projections.
BANDAI NAMCO Holdings’ President Mitsuaki Taguchi had the following to
say about performance outlooks and activities of each SBU moving forward,
as well as on progress regarding the next Mid-term Plan.
How would you summarize thefirst half?
Taguchi: As domestic and overseas network
content continued to perform strongly, core
IP* products and services for the Toys andHobby, Network Entertainment, and Visualand Music Production SBUs gained in popularity. As such, net sales reached record highsfor H1 at ¥308.8 billion and operating profit,at ¥34.9 billion, outperformed projections madeat the time first quarter performance results
were announced.
Interim dividends were ¥12 per share.
Starting from our stable annual per share
dividend payment amount of ¥24, we willfurther examine year-end dividends based on
our fundamental policy for shareholder returns,
which aims for a consolidated dividend payout
ratio of 30%.
Could you describe the full-year­outlook for FY2018.3?
Taguchi: We have not revised the full-year

outlook. Because the year-end sales season has
not yet begun and market conditions are changing more dramatically, I believe we must keepa cautious eye on the financial outlook. Moreover, in comparison to when financial results
for the first quarter were announced in August,
we have also been seeing changes on thebusiness side. We expect prior investment costs
associated with intensifying advertising for
network contents and those incurred in launchinga new network service-related platform and in
opening new facilities, including VR facilities,
to increase. We will also conduct careful oversight of release schedules for home video gameand visual packaged product titles to ensure
they correspond to environmental changes.
We plan to take another look at full-year
projections when we begin to see results fromthe year-end sales season and indications of
their effects. While bearing in mind the planfor the second half devised in August, eachbusiness will work diligently on present operations. At the same time, I would like to start
preparations in anticipation of the next Mid-term
Plan, aimed at achieving sustainable growth.
Can you talk about establishing­companies in China?
Taguchi: The next Mid-term Plan calls forincreased business development in China. As
such, we will be establishing the holding company—BANDAI NAMCO Holdings CHINA
CO., LTD.—in Shanghai in December. Thisbusiness will be the head of Group holding
companies on the Chinese mainland, while ourholding company in Hong Kong will head thecompanies in the rest of Asia. In addition, we
have established holding companies in theAmericas as well as the UK and other European
countries. These holding companies will aim toboth strengthen governance and bolster business support and cooperation in those regions.

Mitsuaki Taguchi
President & Representative Director,
BANDAI NAMCO Holdings Inc.

What progress has been maderegarding the next Mid-term Plan?
Taguchi: We are making steady progress indeveloping the next plan. Our mission is toprovide dreams, fun and inspiration to people
around the world. The desire to deliver products
and services that meet the expectations of ourfans worldwide remains unchanged moving
forward. From here on out, as in the past, weare not only aiming for business expansion,
but are completely fixated on quality and appeal
in our products and services and strive to be aGroup full of personality. To that end, we will
strengthen our IP axis strategy as well as
accelerate global development through collaborative efforts between BANDAI NAMCO
Group companies. What I would like to promote
is additional creation of new IP and further
strengthening of our IP axis strategy, in particular. I want this Group to be one that drives
IP creation and is capable of continuing to
produce and nurture IP.

*IP: Intellectual property, such as characters

December 20171

Management

Interview with the President

Performance of network contents continues tobe strongPlans for the repeated introduction ofhigh-profile home video game titles
How is the Toys and Hobby SBU
performing?
Taguchi: THE GUNDAM BASE TOKYO, a
complex with the world’s largest selection of
Gundam plastic models, was opened in DiverCity Tokyo Plaza in Odaiba, Japan, in Augustand has since drawn many visitors. A life-sized
Unicorn Gundam statue was unveiled in September, also attracting a large amount of attention. The statue and facility each work together
to multiply visitors to the other, which has
stimulated more interest in Gundam plastic

In addition, as a challenge with a focus on
the future, we exhibited our communication
robot, Guncierge Haro, which represents a
Groupwide project that utilizes AI, at a tradeshow. This project garnered a significant amountof attention at the show. I would like to see
the Toys and Hobby SBU experiment with­combining such cutting-edge technology withIP.

models. Gundam plastic models have also been
performing well in the rest of Asia, with alarge-scale Gundam event being held from
October to November in Taiwan. Moving
forward, we will ramp up events, video distribution, and store promotions to invigorate
interest in Gundam plastic models across Asia.
In new IP, the initial response to the transformation belt from Kamen Rider Build, whichbegan broadcasting in September, has been thehighest in Heisei Kamen Rider history and is
performing well. In the second half, we will
be successively introducing IP targeted at boys,
such as the Black Clover TV show, whichbegan broadcasts in October, and Mushinin,
an anime that is broadcasted on the BANDAI
NAMCO YouTube channel, as well as the newprogram Pikachin-Kit, which will begin broadcasting in January. In this way, we are working
to refine our IP lineup.

Taguchi: In Europe and the Americas, in addition

What is the approach to ­Europe andthe Americas markets?
to Power Rangers products and services, welaunched a card game for DRAGON BALL, an
IP which app for smartphones is popular, inNorth America in July. Card game sales areshowing a good start in the region. The second
round of launches will begin in November,with large-scale events planned in locations
all over the United States next year.
Demand for products for adult customers,such as collectable action figures is increasing
not just in Japan, but worldwide. Along withpromoting our brands with events, we will
be expanding our IP lineup, including Marvel
IP, and continue working for higher visibility
worldwide.
How is the Network Entertainment
SBU performing?
Taguchi: In network contents, our core titles,

including DRAGON BALL Z DOKKAN BATTLE
and ONE PIECE Treasure Cruise, which arebeing rolled out worldwide; NARUTO, whichis popular in China; and IDOLM@STER, whichis in high demand in Japan, are gaining a stablebase of popularity. In addition to maintaining
the popularity of our current titles throughdetailed measures and meticulous managementthat make use of data analysis, we are also
focusing on cultivating new titles. We are alsoplanning to introduce new titles for NARUTO
x BORUTO: NINJA BORUTAGE and SWORDART ONLINE, which are marketed worldwide,
and are working on contents such as Project
LayereD, user-generated content which began
as an effort to create new IP from game apps.
Beyond that, BXD Inc., established through a
joint investment by BANDAI NAMCO­Entertainment Inc. and Drecom Co., Ltd., will
begin distributing online games and managing
new platforms next spring. BXD’s work will
combine the digital and the real in a characteristically BANDAI NAMCO way, and welook forward to what they will accomplish.
What about home video games?
Taguchi: At the Tokyo Game Show 2017, heldin September, we displayed DRAGON BALLFighterZ, SWORD ART ONLINE: FATAL
BULLET, CODE VEIN, and other titles set tobe released in 2018. All games were well-­received by fans. We are already selling titles
for the popular Nintendo Switch and are moving
forward with development of original titles
specifically for the Switch. In addition, we are
actively looking into e-Sports, a promising
new market for the sport of competing at video
games, in order to take serious action in themedium term.

Rather than simply “responding” to thechanges of the times, we aim to “adapt” andtake on new challenges
How is the amusement businessperforming?
Taguchi: The large-scale VR facility we openedin Shinjuku, Tokyo in July—VR ZONE
­SHINJUKU—is performing well, which reinforces my conviction that VR and IP are highly
compatible. We are gradually introducing newactivities to ensure that this flagship store is aplace where people can enjoy themselves nomatter when they choose to visit. While wealready have small-to-medium portal stores incities such as Kobe, Japan and London, UK,
we plan to open a total of 20 stores in Japanand overseas.
In addition, NAMCO LIMITED opened
Asobi Park PLUS in Hong Kong as its firstinternational development project. We havegarnered praise for development projects utilizing our IP as well as our fusion of VR andAR (augmented reality) overseas, which led
to our opening this store. Moving forward, we
will actively continue to open stores in promising locations both in and outside Japan.
How is the Visual and Music ­Production
SBU performing?
Taguchi: The second season of Love Live!
Sunshine!! began broadcasting in October,with the Mobile Suit Gundam: THE ORIGIN:
Battle of Loum packaged product going on salein November. GIRLS und PANZER: The Final
Chapter will open in December. In the second
half, we will develop these new installmentsof our major IP titles and accelerate work on
visual and music, live event, and other projects.
We are also releasing a variety of other noteworthy products. Not only has the packaged
product of the widely lauded animated featurefilm In This Corner of the World become a hit,
the theatrical film Outrage Coda has also been

popular. In addition, an animated TV program
based on our original IP, I­DOLiSH7, which
generated from BANDAI NAMCO Online
Inc.’s game app, will begin in January. The
boy band that appears in this title—­TRIGGER—
is already gaining attention, with its debut
album, REGALITY, reaching number one
on the Oricon weekly albums chart for music
CDs. Moving forward, we will develop products
and more to make this IP more appealing.
Moreover, Actas Inc., which produces
GIRLS und PANZER among other titles, joined
BANDAI NAMCO Group. This will enable
us to strengthen our IP axis strategy. In thisway, the Group has grown by one more animation studio with personality. Together, we
will focus on creating titles that satisfy ourfans and making high quality IP and highquality products.
How is the outlook moving forward?
Taguchi: Digitalization is continuing in all
fields, leaving the market experiencing significant changes. Because “responding” to suchchanges could cause us to fall behind, we muststay one step ahead and “adapt,” much thesame way as organisms adapt to changes intheir environment. Changes in the market giveus the opportunity to change our approach andcreate products and services that are even more
fun and exciting. It is exactly because this isan age of accelerating market shifts that ouremployees resolve to take on new challenges
and gain new experiences rather than remain
restrained by the status quo. This will drive
progress for the BANDAI NAMCO Goup. We
strive to be a Group loved by fans worldwide
that always challenges itself in new ways. Our
stockholders can count on that.

DRAGON BALL FighterZ, scheduled for release on
February 1, 2018
GUNDAM Docks at Taiwan event

Love Live! Sunshine!! Aqours 2nd LoveLive!
HAPPY PARTY TRAIN TOUR
©創通・サンライズ

2

BANDAI NAMCO NEWS©バードスタジオ／集英社・フジテレビ・東映アニメーション©BANDAI NAMCO Entertainment Inc.

©2017 プロジェクトラブライブ！サンシャイン ! !

December 20173

Business Angle

Introduction of Group Officers

Prospects for the Visual and Music Production SBU

Offering visual and music entertainment
through a variety of outlets
The Visual and Music Production SBU is working to diversify entertainment,
expanding business fields beyond package-centric business models andtackling new ventures, such as the live event business. Kazumi Kawashiro,
President and Representative Director of BANDAI VISUAL CO., LTD., speaks on
the status of each business and IP creation efforts, as well as the inclination of
the next Mid-term Plan.

What is the current status and future
outlook for the packaged productmarket?
Kawashiro: Net sales for the market as a whole
have been declining for over ten years. On theother hand, we have had a number of hit products that have earned the support of our customers. For instance, the animated feature film
In This Corner of the World garnered highpraise from all sides, winning the 40th annual
Japan Academy Prize for Animation of theYear and becoming a hit product for our company, selling more than 100,000 movie packages.
There will always be a need for high quality
products. By further increasing the value addedby bundling extras into movie packages, we
strive to offer an enjoyable experience notavailable through other means.
How are the live event and musicbusinesses performing as the focus
of initiatives to secure new outlets?
Kawashiro: Both businesses are performing
well. In line with the vision of the current
Mid-term Plan, the Visual and Music Production
SBU strives to be the “No. 1 Group in Animation, Visual, and Music Products.” In order togrow all our businesses, we are actively working
to expand our business fields, with visual andmusic products at the center. Results have beenpromising. In particular, while creating conventional monetization mechanisms for theoverseas live event business has not been easy,
the live Anisong World Matsuri event for songs
from animated movies and TV programs heldin Shanghai and two cities in the United States
had a positive impact on earnings. This contribution to earnings has been a significant step
forward in proving the great potential of theoverseas live event business.

4

BANDAI NAMCO NEWSTo successfully offer visual and musicentertainment to our customers, in both video
packages and live event experiences, it isimportant to remain flexible while not vacillating
more than necessary in response to media andmarket changes.
What is being done for IP fans overseas?
Kawashiro: We are expanding our live eventsin various countries by actively participatingin large events, such as trade fairs and Anime
Expo in the United States. We are also working
on improving live viewing mechanisms so fansthat cannot attend live events can enjoy themin real time. Such mechanisms have provenincredibly popular, with tickets for Love Live!
events selling out quickly in Asia after theirintroduction. In Europe, Lantis Co., Ltd. joinedwith AMUSE INC. to establish a joint venturecompany that distributes contents, particularly
animation and songs from animated movies
and TV programs, in April 2016. I would liketo work toward business expansion in Europe,
where interest in Japanese anime is quite high.

What is the status of Actas Inc.,
which became a subsidiary
in September?
Kawashiro: Actas Inc. produces the popular IP
GIRLS und PANZER, among other animation
titles. Close collaboration with animation
production is essential in creating and cultivating
IP, including maintaining schedules for thedevelopment of products and other items aswell as reviewing and reworking contents in
response to trends among fans. The additionof Actas to the Group has made further integration of animation production and related
businesses in IP development possible. The
significance of this is considerable. While Actas
is a small company, they are a studio committed
to creating high quality products. In the production of animation, there are times when
quality must be set aside in the interest of
efficiency, but studios that remain highly motivated to create quality products under thosecircumstances are priceless. Moving forward,
I would like to see production that makes freeuse of the BANDAI NAMCO Group’s IP
outlets while maintaining quality.
What are the key titles for thesecond half?
Kawashiro: In Actas animation products, thefirst stage of six of GIRLS und PANZER: The
Final Chapter will open in December. In conjunction with this release, we are planning tohold a large-scale exhibition of original GIRLS
und PANZER illustrations at Sunshine City in
Ikebukuro, Japan, in late December. Throughsuch activities, we hope to garner excitement
for GIRLS und PANZER and its fifth anniversary.
In addition, due to the positive reception of
Princess Principal, which aired this summer
and in whose production Actas was participating,
I would like to see further expansion of thisprogram as new IP and development of relevant
promotional measures.
In products the Group was involved in, thesecond stage of the animated Love Live! Sunshine!! TV program, which began broadcastingin October, is already receiving significant

Our biggest challenge is IP creation
Cultivating IP to take advantage of our­abundant outlets
What are the strengths of the Group
as a whole in terms of IP creation?
Kawashiro: We have many types of IP, including
game IP, animated movie and TV program IP,
and a variety of others. As such, compatibility
with outlets is highly important for both creation
and utilization. Entertainment at the BANDAI
NAMCO Group is a broad business, and its
abundance of outlets is one of its strengths. By
that I mean not only the number of outlets for
IP utilization, but that we possess ground fertile
for producing IP befitting of those outlets. Eachbusiness has a unique soil in which it cultivates
Group IP. The Visual and Music Production
SBU cultivates its own seeds, creating IP thatcan be utilized by other SBUs laterally. These
IP are then cultivated by each SBU, making
the entire Group stronger.
What direction will the next
­Mid-term Plan take?
Kawashiro: Our biggest challenge is IP creation.
IP creation and utilization work hand in hand.
Without IP, the business as a whole cannot
expand. The influence gained in creating a
powerful new IP that generates buzz throughout
society will likely be a significant theme in thenext Mid-term Plan.

In This Corner of the World©こうの史代・双葉社 /「この世界の片隅に」製作委員会

Love Live! Sunshine!!

©2017 プロジェクトラブライブ！サンシャイン! !

support from fans. In theatrical releases, Mobile
Suit Gundam Thunderbolt: Bandit Flower andMobile Suit Gundam Twilight Axis: Red Trace
were jointly launched on November 18th. The
fourth chapter of Space Battleship Yamato2202: Warriors of Love will be released in
January 2018. Also in January, the animatedTV program based on BANDAI NAMCO
Online Inc.’s IDOLiSH7 game app for smartphones will begin. We are releasing a lot of
key titles to look forward to.

What is your motto for the humanside of things?
Kawashiro: I believe that when it comes tohuman resources, “enjoyment predicts aptitude.”
Liking what you do is important in everything
including production, utilization, management
and customer support. I want our employees
to take on the challenges that interest them. It
has always been my intention to ensure that
this is a company where employees like towork. A top-down approach to making important
decisions is all well and good as a governancemechanism, but in terms of IP creation andplanning, I strongly believe that such an
approach tends to lead to complacency rather
than a search for the interesting and challenges
to the status quo. In my mind, people who likewhat they do build productive environmentson their own and I would like to see systems
suitable to that goal included in the next Midterm Plan. For that reason, I am advocatingbold changes, such as widespread decentralization of authority. I want to create an environment where employees take responsibility
for the projects they choose and where people
are interested in and want to do what they are
working on.

Kazumi Kawashiro
President and Representative Director,
BANDAI VISUAL CO., LTD.

 rofile of President and RepresentativeP
Director Kazumi Kawashiro<Background>
April 1982	Starts at Canyon Records Inc.
(currently Pony Canyon Inc.)
July 1989

Starts at BANDAI CO., LTD.

April 1994

Starts at BANDAI VISUAL CO., LTD.

May 1999

Director at BANDAI VISUAL CO., LTD.

May 2003	President and Representative Director at
BANDAI VISUAL CO., LTD.
June 2007

Director at BANDAI NAMCO Holdings Inc.

April 2010

Executive Vice President at BANDAI VISUAL CO., LTD.

April 2012	President and Representative Director at
BANDAI VISUAL CO., LTD. (current position)
April 2015

Executive Officer at BANDAI NAMCO Holdings Inc.

June 2015	Director in charge of Visual and Music Production
SBU at BANDAI NAMCO Holdings Inc.
(current position)

Princess Principal©Princess Principal ProjectDecember 20175