Newsletter No.74 December 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.

Achievement of record-high net sales in thefirst half based on our strengths in a wide
range of business initiatives
Bandai Namco Holdings Inc. has announced its results for the first six
months of FY2024.3 (April to September, 2023). In this issue of the­newsletter, the Company’s President and Representative Director,­Masaru K­ awaguchi, discusses the results, the current circumstances ineach b­ usiness, and other matters.

The results for the first six months of
FY2024.3 have been announced.
Kawaguchi: In the first six months of the fiscal
year, 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 our
results, net sales were ¥502.0 billion, operating
profit was ¥65.4 billion, recurring profit was¥73.9 billion, and profit attributable to ownersof parent was ¥52.1 billion. Net sales for thesix-month period were up year on year andsurpassed ¥500.0 billion for the first time. In
addition, we exceeded the initial plans forprofit at all levels, including operating profit.
By business area, two businesses achieved
record-high results and contributed to our
performance. In the Toys and Hobby Business, products for the mature fan base andestablished IP products registered solid
results, and in the Amusement Businessfavorable areas included new amusement
machine sales. In the Digital Business, resultsin home console games were influenced bychanges in the title lineup and product mix
in comparison with the same period of theprevious year, when repeat sales of major
title were favorable. Overall, we demonstrated the strengths of our portfolio, which
extends over a wide range of business fields,from physical to digital, and does not rely
excessively on any single business.
*IP: Characters and other intellectual property

Please discuss the situation in each­business in the first six months.
Kawaguchi: In the Digital Business, we launched
ARMORED CORE VI FIRES OF RUBICON, a major
title for the worldwide home console gamemarket. This product became a hit, with salesof 2.5 million units. In home console games
overall, in comparison with the same periodof the previous year, differences in the title
lineup and product mix had an effect on
results, such as sluggish unit sales of repeat
titles. Looking at network content, major app
titles, such as in the DRAGON BALL series and
ONE PIECE, recorded favorable results due
to ongoing measures for customers.
The Toys and Hobby Business was impacted
by rising prices for raw materials and fuel.
Nonetheless, its results remained favorable
due to efforts to expand product lineups incategories that are doing well, advance global
business development, strengthen production
operations, and expand customer touchpoints
through real events and stores. In addition,
contributions to results were made by the
ONE PIECE trading card game and other card
products, capsule toys, etc., due to initiatives
to expand product lineups, broaden target
customer groups, and reinforce customer
touchpoints.
In the IP Production Business, we produced multiple new visual works, including
TV anime and theatrical works. Of these,
Mobile Suit Gundam THE WITCH FROMMERCURY enabled us to secure new fans andwas linked to favorable results with Group
products and services. In addition, resultswith licensing operations, video streaming,etc., were favorable for the Gundam series, theLoveLive! series, ­IDOLiSH7, That Time I Got
Reincarnated as a Slime, and BLUELOCK. On
the other hand, overall sales for the IP Production Business did not reach the level
recorded in the same period of the previous
year due to such factors as year-on-year
differences in title lineups for sales of visualand music packaged products and a decline
in the number of large-scale events in thelive events business.
In the Amusement Business, sales atexisting amusement facilities in Japan wereup 2.4% year on year. In addition, we madefavorable progress with store developmentthat leverages Bandai Namco’s distinct
strengths. These initiatives, which involved
collaboration with the Groupʼs products andservices, included Bandai Namco CrossStores and GASHAPON Bandai Official Shops.
In amusement machines, contributions toresults were made by such initiatives as
update kits for Mobile Suit Gundam Extreme
Vs. 2 OverBoost and Mario Kart Arcade GP DX.

(Continued on next page)
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(Information in this section is as of the end of November 2023.)

Management

Interview with the President

Enhancing our presence in each businessworldwide with a focus on the medium tolong term
Would you discuss the trends and focus
topics for each business in the second
half? First, what is the situation in the
Digital Business?
Kawaguchi: In network content, major app
titles are recording favorable results. Throughevents and other initiatives, we will analyze
and utilize data regarding user trends, and wewill further strengthen the foundation of ourapp business. Moreover, we will introduce
high-quality titles. For example, following therelease of THE IDOLM@STER SHINY COLORSSong for Prism in November, we will launch
SD Gundam G Generation ETERNAL.
Looking at worldwide titles in the homeconsole game business, we followed up theAugust release of ARMORED CORE VI FIRES OF
RUBICON with the November launch of a new
NARUTO title — NARUTO X BORUTO Ultimate
Ninja STORM CONNECTIONS. In January 2024
we will release TEKKEN 8, and right before thislaunch we will hold an international e-sports
tournament in the U.S. to create buzz. Throughcommunication with fans, we will strive tonurture each of these products into a longlived title. In addition, with a focus on themedium to long term, we will work to enhance
our presence worldwide. To that end, we willreevaluate our portfolio to facilitate thedemonstration of our strengths, foster themutual utilization of know-how among studios, and implement other initiatives. In theseways, we will strive to further strengthen ourdevelopment system.
What are the circumstances in the Toysand Hobby Business?
Kawaguchi: The ONE PIECE trading card gamehas maintained its popularity. This summer,

we implemented a large-scale promotion tocommemorate the one-year anniversary of its
launch, and we were able to expand the fanbase, especially in Japan. Going forward, in
addition to regular new launches, we will
implement tournaments and teaching initiatives at the official shops operated by Bandai
Namco Amusement Inc. In this way, we will
aim to reinforce our ties with new fans. Japan’s
Christmas/New Year sale period for toys will
start soon. During this period, we will aim tosecure younger customers, with priority items
including the transformation belt for KAMENRIDER GOTCHARD as well as Tamagotchi Uni
and the Chiikawa personal-computer-type
learning toy.
Around the world, in North America andinland China we are working to expand ourIP and product lineups and to strengthen
distribution, including e-commerce. These
initiatives are centered on products for themature fan base as well as capsule toys andtrading cards. Our objective is not to generate
one-time earnings but rather to put down roots
as an established presence in each regional
market. To that end, we are not only utilizing
digital promotions but also increasing opportunities for customers to directly experience
products, such as events, stores, and official
shops. The TAMASHII NATIONS flagship shopthat opened in New York’s Times Square in
September has gotten off to a strong start andis crowded with local fans.
What is the situation in the IP Production
Business?
Kawaguchi: Looking at the mainstay Gundam
series, currently in streaming anime, Gundam
Build Metaverse is popular. In addition, Mobile

Suit Gundam SEED FREEDOM, a theatrical work
scheduled to open in January 2024, is the firstnew sequel in 20 years. Fan expectations haveincreased due to such initiatives as the screening of a highlights compilation version. To
create buzz, we will implement collaborative
initiatives with products.
Going forward, in addition to Gundam, we
will continue working to create a diverse rangeof other IP. In addition to enhancing the work
environment and developing human resources,
the IP Production Business will collaborate with
the Digital Business. In this way, we will draw
on new technologies, such as game development knowledge utilization and AI. Moreover,to maximize the value of the IP that is created,
we will review the ways in which we releaseproducts and step up our focus on certain
fields, such as packaged products, licensing,and live events. We will move ahead with
monetization methods that are aligned withthe worlds of products.
What are the trends in the Amusement
Business?
Kawaguchi: Looking at amusement machines,
which made a major contribution to resultsin the first half, we started operation in inland
China of an online machine cabinet for Taikono Tatsujin, which has also gotten off to a solid
start in the second half. Moreover, in February
2024 we plan to start operation of the popular
title WANGAN MIDNIGHT MAXIMUM TUNE 6RR
PLUS. Going forward, in the development of
amusement machines, we will focus on titles
that can secure stable popularity. In addition,
we will strengthen location testing and reflectuser feedback in a timely manner. In thisway, we will implement development that
addresses user needs.
In amusement facilities, we will step up
facility development by collaborating with
the IP, Group's products and services and leveraging Bandai Namco’s distinctive strengths.

One example of this approach is the Bandai
Namco Cross Store initiative. We are opening
official shops for more than 15 IP and productbrands. Our first store in London, which was

opened in August, is doing well. Going forward, we will continue to open stores alignedwith locations and fan groups, while verifying
content.

Sincerely addressing IP and fans as we aim tocreate a world of smiles and happiness
together
Please discuss other topics related to theGroup.
Kawaguchi: The Bandai Namco Group has
formulated a Group human rights policy. This
policy documents in writing the approaches
and initiatives that we have implemented up
to this point. In this way, we have further
increased awareness and understanding
within the Group regarding human rights, andwe have announced that we will work toprevent and rectify human rights violations
and discrimination. Going forward, all officers
and employees will step up their efforts andwork together with stakeholders to implement a variety of initiatives related to humanrights, in both business activities and the
supply chain.

Also, looking ahead, the Bandai Namco
Group will have a pavilion at Expo 2025
Osaka, Kansai, Japan. This pavilion, which
will be a venue for connecting with fans andthe world, will be named the GUNDAM NEXT
FUTURE PAVILION. The Group offers a wide
variety of IP, but by boldly focusing on Gundam
in this initiative, we will strive to create an
unprecedented pavilion that brings IP to theforefront.
Do you have a message for stakeholders?
Kawaguchi: When I visit regional bases andevents, I see the enthusiasm of fans for IP and
the growing commitment among employees
to working together under the ALL BANDAI
NAMCO concept. I believe that the reasons for ey visual (left) and exterior design illustration (above) for the Bandai Namco
KGroup’s GUNDAM NEXT FUTURE PAVILION at Expo 2025 Osaka, Kansai, Japan©創通・サンライズ

Consolidated Financial Results in First Half of FY2024.3
Net Sales

Operating Profit(million yen)
Recurring Profit

2

BANDAI NAMCO NEWS

Business Segment

Net Sales

Segment Profit

65,47973,931

52,167

Digital174,316

15,516Year-on-year changes

105.1%

80.2%

80.0%

78.4%

Toys and Hobby

249,81045,753IP Production

33,337

2,347

Amusement

59,253

6,977(million yen)

Operating Profit

Recurring Profit

Profit Attributable to
Owners of Parent

Other

16,039661(30,756)(5,777)502,00265,479

Revised projections*

1,000,000

125,000

134,000

91,000Elimination andCorporate

Results in previous year

990,089

116,472

128,006

90,345

Consolidated
Total(as of November 2023)

TEKKEN™8 & ©Bandai Namco Entertainment Inc.

 onsolidated Financial Results by Segment
Cin First Half of FY2024. 3
(million yen)

502,002

Net Sales(April 2022 to March 2023)

TAMASHII NATIONS STORE NEW YORK was opened in September.

Profit Attributable to
Owners of Parent

Results

Full-year Consolidated Forecast for FY2024.3

T EKKEN 8 is scheduled to be released on January 26,
2024.

these trends include the following. In conjunction with the start of the Mid-term Plan, we
introduced our Purpose — Fun for All into the
Future — which is the meaning of our existence, and the new Bandai Namco logo isdisplayed on all products and services. Also,
more than anything else, we are generating
results with collaborative projects that extend
across businesses and regions.
Our number one joy and driving force is
our ability to see the moments when fans are
inspired by Bandai Namco products and services. Up to this point, our IP and our products,
as well as Bandai Namco itself, have been
nurtured by the power of fans. Moving forward,
we will sincerely address IP and fans as we aim
to work with a wide range of people to createa world of smiles and happiness together.

* Forward-looking statements are based on a variety of assumptions and are not promises or guarantees that the statedfuture forecasts/measures will be realized.

©創通・サンライズ・MBS ©尾田栄一郎／集英社・フジテレビ・東映アニメーション

December 2023 No.74

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

Closeup

Implementing business reorganization
initiatives, system changes, and other reforms
in order to leverage the strengths ofmanufacturers and operators
Bandai Namco Amusement Inc., which plans, develops, and operates
amusement machines and facilities, is working to provide real venues forconnecting with fans, centered on collaborative initiatives within the Group.
In this section, Hiroshi Kawasaki, the president of Bandai Namco A­ musement
Inc., discusses circumstances in the Amusement Unit, including trends andthe future outlook.
It has been two and a half years since
you became president.
Kawasaki: I became president during thechallenging circumstances resulting from the
COVID-19 crisis. In this setting, we continued
to implement initiatives that leveraged ourcapabilities, and as the COVID-19 crisis moved
toward a resolution, we fulfilled our role in
the provision of leisure activities that can beenjoyed nearby, without traveling long distances for entertainment. In this way, we wereable to make progress toward a recovery in
results.
Over the past two and a half years, we have
implemented business reorganization initiatives and changed a variety of systems. Bandai
Namco Amusement Inc. was created in 2018
through the integration of Namco Limited(facility operation business company) and theamusement machine development and sales
division of Bandai Namco Entertainment Inc.
At the time of the integration, I was working
at a different Group company, and when I
became president in 2021, I felt that we were
not fully demonstrating our strengths as botha manufacturer and an operator. In addition,
I thought that our position within the Group’s
IP axis strategy was not yet settled. Accordingly, we reviewed the profitability and added
value of each business and formulated thecurrent Mid-term Plan, which looks ten years

ahead. On that basis, we are now implementing our main strategies.
Would you discuss progress with results
and future challenges?
Kawasaki: We restructured our internal organization and created a departmental systemwith a focus on earnings. For example, there
are six departments, including facility operation and machine arrangement. As a result,the preferences of customers and fans, andthe value that we need to provide, is communicated directly to those who develop plans.
Looking at machine development, salesof Mobile Suit Gundam: Extreme Vs. 2 Over
Boost are favorable and are contributing toour results. On the other hand, we still facecertain issues. We need to further enhance
our planning and technical capabilities, andthe most important thing right now is to beprepared to take on new challenges. I thinkthat encouraging the development spirit
among creators will lead to the formation ofoutstanding plans.
What do you think is Bandai Namco’s
competitive edge?
Kawasaki: I think Bandai Namco’s competitiveedge is the ability of Group companies to work
together and rapidly roll out products andservices through a variety of content outlets,

centered on the IP axis strategy. As the Group
creates, nurtures, and rolls out IP, the Amusement Unit is the only point of direct customer
contact. We are constantly thinking about therole that we should fulfill.
Bandai Namco Amusement Inc. is opening
official shops that handle the Group’s high-quality products, such as prizes, character lottery
products, capsule toys, and cards. At the sametime, with Bandai Namco Cross Stores, we cancontribute to increases in the Group’s value
by providing real venues that facilitate connections with customers.
What is the role of the Amusement Unit
within the Group?
Kawasaki: I think that our role is to foster realcontact with customers, offer venues for that
contact, connect with fans, and implement
operations that leverage our direct contact
with customers. As product development andlogistics are increasingly digitalized, the importance of real initiatives increases. Our distinctive
resources and know-how include venues thatshare information, content that satisfies thefive senses, and responsible customer service. Going forward, we will leverage theseresources and know-how and advance ourbusiness operations.
In addition, without limiting ourselves tothe sharing of resources within the Group, we
will strive to provide a level of value that will
make rights holders and other partners gladthat they do business with Bandai Namco
Amusement Inc.
Would you discuss fan marketing?
Kawasaki: We are conducting data analysis
for the purpose of providing services to IP fans.
From amusement facilities, we are able toobtain unique qualitative data from real pointsof customer contact. In Groupwide marketing,
we would like to step up the extent to which
we leverage factors such as the enthusiasm

of fans, which cannot be quantified, and data
for niche IP that will require some time before
a wide roll-out.
In addition, the creation of amusement
facility fans is another element that is important for us as a company that conducts facility
management. We are constantly considering
ways to increase the quality of customer contact service, such as using fan evaluations offacilities in the evaluation standards for staff
members.
Please discuss the labor shortage andrising labor costs in the service industry.
Kawasaki: Working styles and employment
circumstances are changing significantly, andmeasures to address these trends are necessary.

PAC-MAN™& ©Bandai Namco Entertainment Inc.

4

BANDAI NAMCO NEWST aiko no Tatsujin online machine
cabinet in inland China

Hiroshi Kawasaki

President and CEO,
Bandai Namco Amusement Inc.

Fulfilling our mission of providing value for fansand customers through real venues
Would you discuss the status and future
outlook of overseas initiatives?
Kawasaki: In August, the Bandai Namco CrossStore Camden, London, was opened where it
has been well received. We think it has beena great success due to collaboration between
Bandai Namco Amusement Europe Ltd., alocal company, and the Japan-based overseas
business divisions. Going forward, we will
open Bandai Namco Cross Stores around theworld. In the U.K., we are seeing good results
at our official shops for capsule toys, andlocal managers and staff are working
together with high levels of motivation.
In inland China, in September we started
operation of an online machine cabinet for
Taiko no Tatsujin, and this is generating favorable results. We will continue working withlocal partner companies to conduct active
sales of machines aligned with local needs.
In addition, I believe that India is also a market
with high potential, and we will continue tofocus on India in the future.
Please discuss future focus facilities andtitles.
Kawasaki: In November, we opened newamusement facilities at AMU PLAZA NAGASAKI
and the Tachikawa Takashimaya shopping
center. In addition, we opened Bandai Namco
Cross Store Kyoto. Also, in December we plan
to open VS PARK Aeon Mall Kyoto.

 andai Namco Cross Store Camden, London was opened in
B
August.

Going forward we will need to further enhance
the workplace environment so that employeeson the front lines can work energetically. We
want to be a company in which employees canformulate not only career plans but also life
plans. To that end, we have significantly
changed the frameworks of a number of systems. For example, we have revised the salarysystem. We have also introduced the Home
Ground System for full-time employees working
at amusement facilities. This system enables
these employees to work at a facility in an areathat they have selected, thereby facilitating
working styles aligned with the life plans of
employees and their families. In addition, theAlumni System makes it easier to rehire former
full-time employees. Moving forward, we willcontinue to implement reforms.

Looking at focus amusement machine
titles, in February 2024 we plan to start operation of WANGAN MIDNIGHT MAXIMUM TUNE
6RR PLUS, an arcade game.
What are your thoughts about Bandai
Namco’s Purpose?
Kawasaki: Fun for All into the Future is aphrase that is extremely well suited to the
Bandai Namco Group. The Amusement Unitis always thinking about contributing to theGroup as well as recording earnings. Our mission is to provide value for fans and customers
through real venues, and we will ensure that
our efforts are aligned with the Purpose.

like to communicate to everyone what typeof world is waiting for us in the future.
Do you have a message for shareholders
and investors?
Kawasaki: The Amusement Unit provides realvenues that foster connections among fans,local communities, employees, and the Group.
Going forward, we will continue to deliver realentertainment value to people around theworld by “rolling out venues for sharing inspiration through experiences.” Please lookforward to the Amusement Unit’s continued
progress in the years ahead.

What are your policies toward work?
Kawasaki: Since I was young, I have written“Never Say Never” on the first page of mynotebooks. I think of this phrase in the senseof not complaining or whining. Moreover, as
president, I place importance on fairness. In
addition, Yasuo Miyakawa, the former president of Bandai Namco Entertainment Inc.,taught me a saying that has been attributed
to Antoine de Saint-Exupéry. “If you want tobuild a ship, you do not need to assemble thepeople in the forest, assign the work, and give
instructions. Instead, all you need to do is pointout the existence of the vast and boundlesssea.” I place importance on this saying as anindicator of how leaders should act. Rather
than micro-managing the front lines, I would

GASHAPON Bandai Official Shop

Taiko no Tatsujin™Series & ©Bandai Namco Entertainment Inc.

“GASHAPON” is a trademark of Bandai Co., Ltd.

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