Newsletter No.73 September 2023

Bandai Namco miraikenkyusho
5-37-8, Shiba, Minato-ku, Tokyo, 108-0014, Japan
Management

Interview with the President

Masaru Kawaguchi
President and Representative Director, Group CEO
Bandai Namco Holdings Inc.

Demonstration of the effectiveness of
our portfolio management for a wide range ofbusiness fields in the first quarter
Bandai Namco Holdings Inc. has announced its results for the first three months of
FY2024.3 (April to June, 2023). In this issue of the newsletter, President Masaru
Kawaguchi discusses the results, future trends in each business, and other matters.
The results for the first quarter havebeen announced.
Kawaguchi: In the first quarter of FY2024.3,
we implemented cross-sectional collaborative measures in each region and business,
centered on the IP* axis strategy, and we
strengthened unified initiatives under the
ALL BANDAI NAMCO concept. Looking at theGroup overall, two businesses achieved
record-high results and contributed to our
performance. In the Toys and Hobby business, products for the mature fan base andcard products registered solid results, andin the Amusement business favorable areas
included new amusement machine sales.
In the Digital business, in results in home
video games were influenced by changes
in the title lineup and product mix in comparison with the same period of the previous
year, when repeat sales of major titles werefavorable. Overall, the Group demonstrated
the effectiveness of its portfolio management for a wide range of business fields.
Consequently, looking at our results in thefirst three months of FY2024.3, net sales were¥224.8 billion, operating profit was ¥27.9 billion, recurring profit was ¥32.7 billion, andprofit attributable to owners of parent was¥21.7 billion. In comparison with the same
period of the previous fiscal year, we recorded higher sales and lower profits.
Please discuss the situation in eachbusiness. What are the circumstances inthe Entertainment Unit’s two businesses?
Kawaguchi: In the Digital business, we areplanning worldwide sales of major titles
from the second quarter. Also, there have
* IP: Characters and other intellectual property

been changes in the title lineup and product mix. These factors had an effect on our
performance. For example, unit sales ofrepeat titles were down year on year. In network content, BLUE PROTOCOL, a new PC
title, got off to a smooth start. In addition,
for major app titles, such as for the DRAGONBALL series and ONE PIECE, we continued
to implement measures for customers, andas a result sales were stable at about thesame level as in the corresponding periodof the previous year, when results were favorable due to collaboration with the openingof film.
As for the Toys and Hobby business, while
it was impacted by rising prices for raw materials and fuel, its performance remained
strong due to efforts to expand the categories that are doing well, advance global
business development, and strengthen production operations. Specifically, products
for the mature fan base, such as Gundam
plastic models, which recorded growth in
new fan groups due to Mobile Suit Gundam
THE WITCH FROM MERCURY; collectible figures; and character lottery products continued to perform favorably worldwide dueto the strengthening of profitability, marketing, and product lineups. In addition,
card products, such as the ONE PIECE Card
Game that is currently a worldwide hit, capsule toys, etc., contributed to results due tomeasures to reinforce product lineups andcustomer touchpoints. Consequently, theToys and Hobby business achieved a record-setting performance.

Would you discuss the IP Production
business and the Amusement business?
Kawaguchi: In the IP Production business,
we consolidated bases in the visual business with the objective of strengthening IP
creation, and worked to bolster the exchange
of know-how and human resources in visual
works production. In operations, the broadcast of Mobile Suit Gundam THE WITCH FROMMERCURY enabled us to secure new fans andwas linked to favorable sales of products
and services. In addition, licensing revenues,
video streaming, etc., were favorable for the
Gundam series, the LoveLive! series, That
Time I Got Reincarnated as a Slime, andBLUELOCK.
In the Amusement business, sales of Mobile Suit Gundam: Extreme Vs. 2 Over Boost,a new amusement machine, contributed toresults and set a record high level. In theamusement facility business, sales at existing amusement facilities in Japan were up
2.6% year on year. In addition, favorable
progress was made with facility development leveraging Bandai Namco’s distinct
strengths in collaboration with Group products and services, including facilities such as
BANDAI NAMCO Cross Store and GASHAPON
Department Stores.
(Continued on next page)
September 2023 No.73

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(Information in this section is as of the end of August 2023.)

Management

Interview with the President

We are strategically implementing Groupwide
approaches worldwide with the objective of
maximizing IP value over the medium to long term.
Would you discuss the first-half and fullyear results forecasts for FY2024.3?
Kawaguchi: Looking at our forecasts for the
first half, we carefully reviewed first-quarter
results and the product and service marketing plans, etc., for the second quarter. As aresult, in comparison with the forecasts announced on May 10, we now anticipate a higher level of non-operating income due to foreignexchange gains and other factors. We changed
the forecast for recurring profit from ¥62.0 billion to ¥65.0 billion. In addition, looking at the
breakdown by business, we revised the forecasts for the Digital, Toys and Hobby, andAmusement businesses. Note that we have
not revised the full-year forecasts for FY2024.3
because it is difficult to judge annual trends
based only on results in the first quarter.
What are the future business trends?
Kawaguchi: In regard to established IP that
extends across businesses and regions underthe IP axis strategy, we have established Groupwide projects that implement initiatives underthe ALL BANDAI NAMCO concept. The number
one objective for each project is to maximize IP
value over the medium to long term. On thatbasis, the projects are advancing strategic initiatives in close collaboration with partners, suchas IP rights holders. Over the past several years,
sales of products and services for DRAGON BALL,ONE PIECE, and Gundam have recorded stable
growth. This has been achieved against a background of steady initiatives that we have
implemented worldwide for some time.

Under a cross-sectional project, Mobile Suit
Gundam THE WITCH FROM MERCURY generated buzz before its opening due to a variety
of approaches that we implemented. Withvisual works and products/services both playing essential roles, we have been able toenhance connections with fans and appeal
to new fans with the new-era Gundam. Goingforward, we will continue to approach newfans and build strong connections with them.
In addition, we will also continue working tonurture IP that will become the next pillar ofour business, along with these established IP.
Would you discuss the future topics foreach business? What is the situation in
the Digital business?
Kawaguchi: In August, we launched ARMORED
CORE VI FIRES OF RUBICON, a title developed
jointly with FromSoftware Inc. We are taking
steps to create buzz, such as exhibiting at multiple major overseas events, implementing
large-scale promotions, and releasing trailers.
In regard to new worldwide titles, we are developing multiple titles, including titles scheduled
for launch next year and thereafter. These
include NARUTO X BORUTO Ultimate Ninja
STORM CONNECTIONS, which is scheduled forlaunch in November, and TEKKEN 8, which isscheduled for launch in January 2024. For PCs,
BLUE PROTOCOL, which was released in June,
got off to a favorable start, with a cumulative
total of more than 600,000 players in approximately one week after it was launched. Goingforward, we will continue taking steps to create

buzz, such as through periodic updates andother creative operational initiatives. Looking
at network content, we will strengthen major
IP title events from the second quarter. In addition, we will also launch a new THE IDOLM@
STER title.
In FY2024.3, the Digital business title lineup
will get fully under way from the second quarter, which is something that we would likeeveryone to look forward to.
What are the circumstances in the Toysand Hobby business?
Kawaguchi: In the Toys and Hobby business,on a worldwide basis we will reinforce categories with favorable results. With products
for the mature fan base, we are aggressively
implementing large-scale events, such as
world tours, and opening shops. In theseways, we are deepening real connections
with fans. In addition, we are bolstering
e-commerce in Japan and overseas. In Europe, we launched an in-house e-commerce
operation in France. In Japan, we will soon
reach the mark of 5.55 million domestic members for Premium Bandai, and we implemented a large-scale campaign.
Furthermore, we are acquiring enthusiastic
fans for the ONE PIECE Card Game in Europe,
the Americas, and Asia. In addition to strengthening our production system, we are taking
steps to make this product an established partof the card game market, such as periodicallylaunching new versions, holding events, andimplementing large-scale promotions for the
one-year anniversary of the launch.
In toy products, in July we launched Tamagotchi Uni, which enables customers worldwide to use Wi-Fi so that their Tamagotchi canmeet with other Tamagotchi in the Tamaverse.

Since its launch in 1996, Tamagotchi has continued to evolve with the times and today it
has a wide range of supporters. Going forward,

we will aggressively implement collaborative
initiatives with various influencers and brands.

We will strive to put smiles on the faces of fansaround the world through IP initiatives that leverage Bandai Namco’s distinctive business fields.
What are the trends in the IP production
business?
Kawaguchi: With consideration for the viewing
environment for fans, in addition to TV anime
works, we are strengthening visual works for
streaming and theaters, which is something that
we would like everyone to look forward to. In TV
anime works, SYNDUALITY Noir started in July,and buzz has started to spread. The IP Production, Digital, and Toys and Hobby businesses
have collaborated from the start of planning, andwe are aiming to build SYNDUALITY Noir as a new
IP. In theatrical works, IDOLiSH7, which started
as IP from a Group app game, has become along-running hit due to measures to involve fans.
Also, SAND LAND opened in August. SUNRISE
Studio participated in the production of this theatrical work, which is based on a comic by Akira
Toriyama. In the production process, Mr. Toriyama provided a variety of comments and advice,and this was a very valuable experience for creators at the Bandai Namco Group. At the world
premier, which was held in July at San Diego
Comic-Con ahead of the film opening, enthusiastic encouragement was received from overseas
fans. Going forward, we will continue to roll out
products and services such as toys and games.

In IP Production, going forward we plan torelease a variety of enterprising new works.
What are the circumstances in the
Amusement business?
Kawaguchi: In the Amusement business, themarket is recovering, and we were able to implement initiatives with a balance between
facilities and amusement machines sales. The
business foundation has been reinforced. In
facilities, we have opened multiple facilities
that leverage Bandai Namco’s distinctive
strengths. Overseas, we have opened
Gashapon capsule toy and card game facilities, and in August we opened the first overseas Bandai Namco Cross Store in England,
which got off to a favorable start.
In amusement machines, from the second
quarter of FY2024.3 we launched refurbishment kits for Mario Kart Arcade GP DX, and in
addition from September we will start fullscale operation of TAIKO: DRUM MASTER in
China. We are also developing a new THE
IDOLM@STER amusement machine. Going forward, we will develop and sell a wide rangeof machines that are suitable for a variety oflocations and fan groups.

Consolidated Financial Results in First Quarter of FY2024. 3
Net sales

Operating profit(million yen)

Recurring Profit

Results

224,81227,98932,733

21,786

year-on-year changes

104.0%

63.0%

63.8%

58.9%

Consolidated projections for the second quarter of FY2024. 3
Net sales

Revised projections*(as of August 2023)

Previous projections*(as of May 2023)

Mobile Suit Gundam: Extreme Vs. 2 Over Boost

2

BANDAI NAMCO NEWS©創通・サンライズ

SAND LAND booth at San Diego Comic-Con©創通・サンライズ・MBS©Bandai Namco Amusement Inc.

©バード・スタジオ／集英社 ©SAND LAND製作委員会

Profit Attributable to
Owners of Parent

Operating profit(million yen)

Recurring Profit

Profit Attributable to
Owners of Parent

475,000

60,00065,00044,000475,000

60,00062,00044,000▲ ARMORD CORE VI FIRES OF RUBICON©Bandai Namco Entertainment Inc./©1997-2023 FromSoftware, Inc. All rights reserved.

Do you have a message for stakeholders?
Kawaguchi: In FY2024.3, I went to visit venues
for anime-related events being held aroundthe world. I saw that there is no time lag inthe speed of IP recognition, and I could sense
the enthusiasm of fans for IP. We have reacheda period in which we can implement simultaneous worldwide roll-outs of Bandai Namco
products and services. Of course, we need toleverage this opportunity to expand our business. In addition, I sensed our pride in Bandai
Namco’s reason for existence, which is to workthrough IP to transcend national borders andconnect people around the world; share a variety of feelings, such as enjoyment andinspiration; and put smiles on people’s faces.
Going forward, we will do our utmost tocontinue meeting the expectations of our various stakeholders.

 onsolidated Financial Results by Segment inCFirst Quarter of FY2024. 3(million yen)
Business segment

Net sales

Segment profit

Digital

68,0402,661

Toys and Hobby

120,372

23,629IP Production

14,992

1,058

Amusement

28,240

3,157

Other

8,098

481

Elimination andCorporate(14,932)(3,000)Consolidated Total

224,81227,989* Forward-looking statements are based on a variety of assumptions and are not promises or guarantees thatthe stated future forecasts/measures will be realized.

September 2023 No.73

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(Information in this section is as of the end of August 2023.)

Closeup

We will work with a sense of urgency as we rollout global initiatives and provide products andservices to fans around the world.
In April 2023, Hiroshi Sakakibara, who had been responsible for the plastic modeland collectible figures divisions at Bandai Spirits Co., Ltd., became president of thecompany. Bandai Spirits is the driving force for overseas initiatives in the Toys andHobby business in accordance with the IP axis strategy. In this issue of the newsletter, Mr. Sakakibara discusses the current circumstances and future outlook at
Bandai Spirits as well as this year’s focus products and services.
It has been approximately six months
since you became president of Bandai
Spirits. Please discuss your impressions
at this point.
Sakakibara: The past six months have gone by
quickly. I think that we have increased initiatives
focused on growth over the medium to longterm, and further stepped up our sense ofurgency. I would like us to further increase ourunity and leverage the Group’s strengths todeliver products around the world under the ALL
BANDAI NAMCO concept.
In October, we will relocate the head officeand consolidate offices in the Mita area of Tokyo
into one location. We think that the consolidation of dispersed offices into a single base will
result in an enhanced sense of unity. Our business divisions will not all be on a single floor.
However, we think that working in the samebuilding will deepen mutual understanding andenable us to advance business operations
smoothly.
What is necessary for mutual
understanding among the divisions
within the company?
Sakakibara: The company has grown, and ourorganization is becoming more vertically oriented. However, we are working to align thevisions and directions of each division as muchas possible. In accordance with Bandai Namco's

 obile Suit Gundam THE
M
WITCH FROM MERCURY
HG 1/144 Gundam
Calibarn

4

BANDAI NAMCO NEWS

Purpose — Fun for All into the Future — we areaiming to work together to create a future of connections with fans around the world throughentertainment. Our Mid-term Vision is Connect
with Fans. I have communicated to each divisionin the company that we will strive to give shape
to these ideas.
Fortunately, our employees are very serious
about manufacturing. We are a group of professionals that does not compromise. That is thestarting point of Bandai Spirits, and we are proudthat it is one of our strengths. If we can ensurethat all employees share that attitude andadvance their work based on mutual understanding, then we should be able to generate
positive results.
Please discuss the factors behind thecompany’s favorable results.
Sakakibara: SNS and other touchpoints with
anime and IP are advancing and spreading
around the world. This includes online distribution and other elements of the viewing
environment. It has become possible to commence online distribution simultaneously
around the world, and over the past several
years the circumstances involving content

have undergone dramatic change. This change
is one of the factors behind our favorable
results with products for the mature fan base.
Another effect of this change is that in orderto deliver products worldwide without a major
time lag versus online distribution, it has become
extremely important to collaborate from theplanning stage up to manufacturing and sales.
The fact that we can now do that represents significant progress.
As we head toward the conclusion of the
COVID-19 crisis, have there been any
changes?
Sakakibara: Due to the COVID-19 crisis, theamount of time people spent indoors expanded, and there was an increase in people experiencing content. Accordingly, despite differencesin business categories, overall this supported
the Toys and Hobby business. Currently, there
has been an increase in real events and in feedback from customers saying that they want tosee actual products. The number of customers
attending real events has started to undergo asignificant recovery. Going forward, we are anticipating promotions and events that fuse physical and digital elements, including overseas.
What do you think is Bandai Namco’s
competitive edge?
Sakakibara: It is the IP axis strategy, under which
we work to implement global business initiatives, centered on IP. I think that a majoradvantage is the fact that partners around theworld, such as sales companies within the Groupand sales agents, can roll out products in collaboration with content initiatives. In addition,by combining the Toys and Hobby business andthe Digital business into single Unit, the Grouphas facilitated collaboration with game IP.
Gundam, DRAGON BALL, ONE PIECE, etc., whichhave been positioned as strategic IP, have started
to show results from collaborative initiatives
since last year. Going forward, we will strive togenerate further momentum by adding NARUTO
to these IP.
Bandai Spirits picks up and commercializes
new IP at a rapid pace.
Sakakibara: We have many employees whoare highly sensitive to new things, andWe will work to be a driving force for overseas
development in the Toys and Hobby business as
we continue to aim for overseas growth while
expanding operations in Japan.
What is the role of Bandai Spirits in theEntertainment Unit and the Toys andHobby business?
Sakakibara: Within the Toys and Hobby business, our products have been rolled out
overseas at a comparatively early stage, andwe have played a leading role in Asia andNorth America. In future global initiatives, wewill strive to be the driving force in the Toysand Hobby business while collaborating witheach base.
Will Bandai Spirits be the driving force
for overseas events, etc.?
Sakakibara: In regard to product exhibitions,etc., we will move forward in collaboration
with Bandai Co., Ltd., rather than taking thelead by ourselves. With the addition of games
from Bandai Namco Entertainment Inc. andvisual works from the IP Production Unit, we
will expand touchpoints with customers whileleveraging collaboration within the Group.
In addition, I think there might be an increase in opportunities for the Toys and Hobby business to participate in game-centered
events. We are already jointly implementing
promotions in such areas as related-productsales. Accordingly, we will work to move forward strategically while cooperating with Bandai Namco Entertainment Inc.

 exico venue for TAMASHII NATIONSMWORLD TOUR — TAMASHII NATIONS
15th ANNIVERSARY©創通・サンライズ・MBS

S AND LAND – Chogokin – Royal
Army Tank Corps No. 104
SAND LAND Character Lottery—Category “A” prize:
MASTERLISE Beelzebub©車田正美／集英社・東映アニメーション©バード・スタジオ／集英社 ©SAND LAND製作委員会

accordingly people speak up within the company, without regard to position or age, when
they think that something will sell, or somethingis interesting. When this happens, as much as
possible, we emphasize taking on challenges,
rather than saying no. This approach is linked
to a sense of urgency in all settings, and makes
it easier to leverage opportunities. In addition,
our approach to delivering better products andservices to fans, is an indication that we haveearned the confidence of rights holders as acompany that places importance on IP.

What are the circumstances in Japan?
Sakakibara: Naturally, Japan is included in
global initiatives, and we will strive to record

expansion overseas while simultaneously
generating growth in Japan. We will collaborate with companies overseas while continuing to focus on Japan as well, leading to overallbusiness expansion. This direction is not limited to Bandai Spirits. It is shared across theentire Group.
Moreover, plans call for the new plant at
the Bandai Hobby Center, a manufacturingbase for plastic models in Japan, to go into
operation by the end of FY2025.3. In addition
to increasing production capacity, we plan to
introduce new technologies and systems, suchas automation through AI, and to make thisfacility into a plant that reflects an awarenessof harmonious coexistence with the local community. Going forward, we will continue working to advance initiatives related to production
system reinforcement and to facilitate thedelivery of products to customers.
Please discuss focus IP, products, andservices for the current fiscal year.
Sakakibara: First, in regard to Gundam, in October we will implement a test opening of the
Gunpla Colony in the IP Metaverse. In January2024, the Mobile Suit Gundam SEED theatricalfilm will be released, and we will continue to
implement multi-faceted initiatives.
In addition, in the collectors toy business,
the TAMASHII NATIONS brand marks its 15th
anniversary this year, and currently we are■Hiroshi Sakakibara

President and Representative Director,
BANDAI SPIRITS CO., LTD.

by September, starting with New York in April
and including Tokyo, Mexico City, Shanghai,
and Paris. Then, in September we will open
TAMASHII NATIONS STORE NEW YORK in New
York’s Times Square. Going forward, we will
work to increase recognition of the TAMASHIINATIONS brand worldwide. Furthermore, looking at SAND LAND, for which a film was releasedin August, we are launching products from all
business department, such as CHOGOKIN andcharacter lottery products. This is an IP thatpeople should keep their eyes on going
forward.
What is your policy regarding work?
Sakakibara: Our goal is to deliver productsthat customers enjoy. As a major precondition for that goal, I think that it is importantfor employees themselves to enjoy theirwork. No matter what type of work you aredoing, what is important is how much you
enjoy doing it. In the end, I think that this will
be linked to better manufacturing andservices.
My dream is to provide Bandai Spirits products and services to markets around the world.
Going forward, we will aim for further growth
so that we deliver products and services tofans around the world, including areas inwhich we do not yet have a presence.

holding the TAMASHII NATIONS WORLD TOUR.
The tour will visit five cities around the world
September 2023 No.73

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