NEWSLETTER

September 2018
BANDAI NAMCO Holdings Inc.

Interview with the President

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

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

Continuing to innovate with a focus on
global business initiatives aligned withchanges in our markets
Under the Mid-term Plan, the Group announced a mid-term vision of CHANGE for
the NEXT — Empower, Gain Momentum, and Accelerate Evolution, and launched afive-Unit system. In the first quarter, the Group achieved record-high sales. In theseways, the Mid-term Plan has gotten off to a favorable start. In this issue of thenewsletter, BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the
future results forecast and the situation with each of the Group’s Units.
How were the results in the first

What is the outlook for the future?

quarter?

Taguchi: In our industry, the environment is

Taguchi: In the first quarter of FY2019.3, in

undergoing drastic changes, and it is difficult
to forecast all of the future trends based on
three months of results. Considering bolsteredmarketing and promotion for businesses
recording favorable results; recent businesstrends, such as changes in title launch timing;and future products and service lineups, there
are no changes to the forecasts that we an­nounced in May — sales of ¥306.0 billion
and operating profit of ¥29.0 billion in thefirst half of the fiscal year and sales of ¥650.0
billion and operating profit of ¥60.0 billion
for the full fiscal year. As I mentioned, core
IP products/services are recording favorable
results, and we view these figures as goals
that we must achieve. I would like to respondto the expectations of stakeholders and aim
to reach even higher.

comparison with the same period of the previous
year, each business recorded favorable overall
progress with core IP* and products/services,
despite differences in the home video game
title portfolio in the Network Entertainment
business. In particular, the Toys and Hobby
business and the Visual and Music Production
business recorded higher sales and profits year
on year, and overall the Group registered salesof ¥150.8 billion and operating profit of ¥17.8
billion. Thanks to the efforts of our employees
to ensure that the new Mid-term Plan gets off
to a smooth start, in the first quarter we achieved
record-high sales.
Looking at the two business that achieved
higher sales and profits year on year, the Toysand Hobby business strengthened its roll-outsof products for the mature fan base as a main
strategy under the Mid-term Plan. In Japan andoverseas, favorable results were recorded byproducts for the mature fan base, such as
Gundam plastic models, collectable figures,
and a lottery-related product. Also, in Japanestablished IP, such as DRAGON BALL, KAMENRIDER, and PRETTY CURE!, was also popular.
In the Visual and Music Production business,core IP, such as Love Live! Sunshine!! and THE
IDOLM@STER, contributed to favorable salesof such products as visual and music packaged
products, live events, and related goods, which
offered a variety of added value.

Would you discuss the trends ineach business?
Taguchi: In the Toys and Hobby business,broadcasts of KAMEN RIDER ZI-O, the new
KAMEN RIDER, started in Japan in September.
This is a compilation of Heisei KAMEN RIDER
series, and accordingly we will implement a
product roll-out featuring this product for thebusy year-end sales period. In addition, we
continue to launch new IP, such as Bakutsuri
Bar Hunter, for boys, and the new Cocotama
series, for girls.
Moreover, to expand our business in products

for the mature fan base, BANDAI SPIRITS
CO., LTD., a new company that consolidates
the mature fan base business of the Toys andHobby Unit, started full-scale operation. Witha separate organizational structure and a clarified
mission, the sense of speed in this businesshas increased. In Europe and the Americas,
DRAGON BALL SUPER CARD GAME, a trad­
ing card game that was launched to strengthen
our initiatives in business for the mature fanbase, has recorded growing popularity, and in
August we held a nationwide tournament in
the U.S. In addition to Europe and North
America, we are expanding the region where
this product is sold to include South America,
Asia, Oceania, etc., and moving forward will
step up initiatives for this game as a focus
product in overseas markets.
Furthermore, we have begun to implement
initiatives targeting a full-blown entry to themainland China market. We are moving forwardwith preparations for the establishment ofcompany to handle the local Toys and Hobby
business, and we are already taking steps toincrease sales of Ultraman toys and Gundam
plastic models, which are highly popular. As
a new initiative for Gundam plastic models,in August we opened THE GUNDAM BASE
SHANGHAI, our flagship facility in Shanghai.
Moving forward, this facility will be a basefor the communication of information about
Gundam plastic models to local fans.

*IP: Characters and other intellectual property

September 20181

Interview with the President

Each Unit is advancing initiatives
aligned with the main strategies in
the Mid-term Plan.
What is the situation in the Network

What are the trends in home video

Entertainment business?

games?

Taguchi: In network content, the eagerly awaited

Taguchi: Home video games are registering

new title DRAGON BALL Legends made asmooth start, surpassing 10 million downloads
in the first month. Also, stable popularity wasmaintained by existing core titles in Japan andoverseas, such as titles in the DRAGON BALLZ DOKKAN BATTLE, ONE PIECE Treasure
Cruise, and THE IDOLM@STER series. For
existing titles, we are using data analysis anddevoting resources to marketing and operations
activities aligned with the characteristics offans in each region in order to ensure that
consumers can enjoy them for longer periodsof time. For newly launched titles, we willconduct planning and development with anenhanced focus on quality and work to meetthe expectations of fans.
Also, with enza, which is new platform
launched in April, primarily for browser games
using HTML5, we commenced full-scale
promotional initiatives from the summer. These
include the appointment of soccer player Yuto
Nagatomo as an official supporter of DRAGONBALL Z BUCCHIGIRI MATCH. A special
feature of enza is that it leverages a variety of
initiatives involving collaboration across Group
Units, and we are excited about the potentialof enza going forward.

favorable results, centered on overseas markets.
Going forward, we will launch worldwide
titles, such as SOULCALIBUR VI and NARUTOTO BORUTO: Shinobi Striker. Furthermore,in the first quarter we continued to record
favorable sales of DARK SOULS series products
and DRAGON BALL FighterZ products, espe­
cially in Europe and the Americas. As with
network content, we will implement ongoing
communications initiatives and promotional
events to ensure that these also become longlived products. In addition, e-sports has become
a topic of conversation as a new type of com­
petition that utilizes games. In e-sports, wewill aggressively implement initiatives for
tournaments using such products as TEKKEN7
and DRAGON BALL FighterZ in order toexpand the base of players.
Would you discuss the situation in theReal Entertainment and Visual andMusic Production businesses?
Taguchi: In the first quarter, results in the RealEntertainment business did not reach the levelof the same period in the previous year, whensales at existing facilities in Japan were strong.
However, we are working to invigorate facilities
through such means as original campaigns andprizes. Moreover, we are moving forward withthe establishment of “venues” at which con­sumers can experience fun that leverages thedistinctive capabilities of BANDAI NAMCO.
These include VS PARK, a variety sports facility
that was opened in Osaka and has become
popular. As we move forward we will continue
to open “venues” that draw on our distinctive
strengths, such as opening a VR ZONE flagshipfacility in Osaka and the No. 2 TONDEMI, a
popular new format.
In amusement machines, in the previous
year our initiatives were centered on the devel­
opment of VR-related equipment, but in
FY2019.3 we will launch new products inpopular series, such as Mobile Suit Gundam:
Extreme Vs. and Wangan Midnight. In this way,
we will leverage synergies with facilities.
In Visual and Music Production, IDOLiSH7,
an IP that originated from network content,
has generated not only a popular game but also
successful coordinated roll-outs of video prod­ucts, music, and live events. Accordingly, it
has attracted further attention among young
women, and we recently decided to produce
a second season of TV animation. The ability
to develop IP along both digital and real axes
is a distinctive strength of BANDAI NAMCO.
By leveraging this experience and know-how
and working in collaboration with external
partners, we will continue to produce a wide
range of IP and aim to maximize IP value. In
addition, for China, which we have positioned
as focus region for the Group, we have started
initiatives for local fans, such as offering online
distribution of animation songs and holding
live events.

What is the status of the new
IP Creation Unit?
Taguchi: In regard to IP creation, Group com­panies and partner companies are working
together to create new IP. At the same time,
we are also taking steps to increase the recog­
nition of existing IP. Recently, at the Anime
Expo in the U.S., which is one of the largest
animation events in North America, weannounced that we would cooperate with
Legendary, a film company, in the joint devel­
opment of a live-action Mobile Suit Gundam
film. This news drew considerable attention.

Having a sense of pride and responsibility
about working in entertainment
Product roll-out initiatives targetingoverseas fans are also being stepped up
for DRAGON BALL.
Taguchi: We participated as a Group in the

DRAGON BALL NORTH AMERICA TOUR.
This event, which enabled consumers to expe­
rience the worldview of DRAGON BALL, washeld in seven cities in North America from
July. At the event site, we conducted promotionsof core products and services, such as figures,cards, network content, and home video games.
Moving forward, while fostering close collab­
oration with animation production, we willcontinue working to roll out products andservices that earn the support of fans aroundthe world for many years.
President Taguchi, I heard that you visited
the Anime Expo.
Taguchi: At the Anime Expo, in addition to

THE GUNDAM BASE SHANGHAI was opened in Shanghai.
©創通・サンライズ

SOULCALIBUR VI, a worldwide title
CD PROJEKT®, The Witcher®, Geralt® are registered trademarks of
CD PROJEKT Capital Group. The Witchergame © CD PROJEKT S.A.
Developed by CD PROJEKT S.A. All rights reserved.
SOULCALIBUR™ VI © BANDAI NAMCO Entertainment Inc.

Announcing the production of a live-action
Mobile Suit Gundam film

2

BANDAI NAMCO NEWS

Gundam has made well-received guest appear­
ances in Pacific Rim: Uprising, a film released
this year and produced by Legendary, and in
Ready Player One, which was directed by
Steven Spielberg. We are also advancing thesetypes of initiatives to leverage the appeal of
IP brands around the world for Cowboy Bebop.
If we succeed in linking these initiatives toincreases in IP recognition and value and to
the establishment of a foundation for the rollout of Group products, then we will also
implement similar initiatives for other IP in
the future.

the Gundam live-action film that I mentioned,
a number of other BANDAI NAMCO initia­
tives were also at the center of attention, suchas product exhibitions, promotions, and live
events for Love Live! Sunshine!! and THE
IDOLM@STER. By going the event site, I
once again understood the popularity andvisibility of Japanese IP. I also realized that,in order to compete with other companies inhuge overseas markets, we will need to lookclosely at local fans, share local information
on a Groupwide basis, and concentrate thepower of the ALL BANDAI NAMCO concept.
This will not be easy, but I believe that it will
be worthwhile.

How was the General Meeting of
Shareholders?
Taguchi: At the General Meeting of Shareholders

held in June, we received a range of opinions
and questions, and I think that we were able
to communicate with our shareholders. At thesame time, I was able to directly experience
the scale of the expectations for our future
products and services, as well as for the Group
itself. Accordingly, I would like to see all Group
employees earnestly working together so that
we can meet those expectations.
Please discuss your enthusiasm forthe future.
Taguchi: The Mid-term Vision — CHANGE

for the NEXT: Empower, Gain Momentum,and Accelerate Evolution — incorporates theidea that, in an operating environment under­
going dramatic change, we too must continue
to change, without being bound by current
business models and established ideas. In
accordance with this vision, each Unit will
determine how it can best adapt to market
changes, and on that basis advance a range ofinitiatives. In addition to initiatives for thecreation of new IP, we will take aggressive

also increase the speed with which we address
services and experiences that utilize new tech­
nologies and devices. Moving forward, theBANDAI NAMCO Group will continue totake on the challenges of products, services,and businesses that are aligned with the times.
Finally, do you have a message forreaders?
Taguchi: The BANDAI NAMCO Group aims

to provide “Dreams, Fun and Inspiration” topeople around the world through our products
and services, and our vision is to become “theLeading Innovator in Global Entertainment.”
Our products and services are not essential
for life, but they are indispensable parts ofpeople’s lives. Moving forward, we will havea sense of pride and responsibility about ourwork in entertainment, and we will continue
to implement initiatives with a focus on the
future as we strive to provide products andservices that are always aligned with the times.
I am enthusiastic about the future of the
BANDAI NAMCO Group.

steps for established IP as well in order to foster
entirely new innovation that is aligned withthe times and also reflects a focus on worldwide
business initiatives.
We must take action now to ensure that the
BANDAI NAMCO Group can leverage its
market presence and continue to record sustained
growth in the years ahead. In addition, we must
September 20183

CloseupAiming to advance growth strategies alignedwith the positioning of each business and toachieve further strong growth in Japan andoverseas

rapid manner. The new system has just gotten
started, but I believe that the mission for eachbusiness has been clarified and that we havestarted to establish an environment that makes
it easy to take on challenges.

In the current Mid-term Plan, the new mid-term vision of the Toys and Hobby Unit
is Break Out of the Box. Wow the World! In accordance with this vision, the Toysand Hobby Unit has announced five main strategies, and in the first quarter of
FY2019.3, the unit achieved favorable results, with year-on-year gains. In thissection, Masaru Kawaguchi, the president of BANDAI CO., LTD., the core company
in the Toys and Hobby Unit, discusses specific initiatives for the strategies in the
Mid-term Plan, his expectations for specific focus IP, and his message for employees.

Five main strategies were announced.

The current Mid-term Plan has gotten

doing things. We must move beyond existing

off to a good start.

concepts and strive to create new forms of fun.
Our new vision was created to strongly advance
those ideas in the current Mid-term Plan.

Kawaguchi: In the first quarter, the Toys andHobby Unit recorded sales of ¥50.5 billion,
up 18% year on year, and operating income of¥5.2 billion, an increase of 293%. We havegotten off to a good start. Our results were
centered on products for the mature fan base,such as Gundam plastic models and collectable
figures, and core IP products, such as DRAGON
BALL, KAMEN RIDER, and PRETTY CURE!
What is the Unit’s mid-term vision?
Kawaguchi: Our vision is Break Out of the Box.

Wow the World! To achieve stable earnings in
an industry in which results are significantly
affected by the presence or absence of hit prod­ucts, the Toys and Hobby Unit has worked toenhance its IP lineup and establish organizational
systems. However, to step up to the next stage
with a view to markets around the world, wecannot limit ourselves to current methods of

A reorganization was implemented
in April.
Kawaguchi: Up to this point, BANDAI has

implemented initiatives for a wide range of target
customers and business fields. However, looking
at products for pre-school children and elementary
school students, and then products for the mature
fan base, there are substantial differences in suchareas as production methods, marketing measures,and ways of advancing into overseas markets.
As a result, it became difficult to operate thesedifferent businesses under the same organization.
Accordingly, we split off the departments that
handle products for the mature fan base andconsolidated them into BANDAI SPIRITS CO.,LTD. In this way, we will aim to implementbusiness development in a more-strategic and【NG例】赤みが強くならないように

Kawaguchi: The first is to create, nurture, andobtain new IPs. The Toys and Hobby Unit isworking to nurture and expand core IP and toacquire the commercialization rights for new
IP. Going forward, the Unit will also strive tocreate new IP. In August, we launched theContent Project, which is a Unit-wide initiative.
The core members of the project are employees
who are well versed in each business, and they
are working to foster the creation of new IP.
The second strategy is to bolster positioning
and business growth. This incorporates measuresto achieve growth through an overwhelming
No. 1 position for each business in Japan, witha worldwide perspective. I would like all of
our companies and departments to clarify their
originality and target market position and workto achieve steady gains in line with their various
distinctive characteristics and growth stages.
Is the Unit making progress in regard
to the third strategy, which isbreaking into the Chinese market?
Kawaguchi: The full-blown entry into theChinese market was announced as a pillar of
the Group’s Mid-term Plan, and accordingly
the Toys and Hobby Unit set up an office inApril to take charge of related preparations.
On that basis, we are moving forward with元素材

preparatory initiatives, including the establish­
ment of a local company. In response topopularity of Gundam plastic models in mainland
China, we opened THE GUNDAM BASE
SHANGHAI in August in Shanghai. This is our
first flagship facility for Gundam plastic models
in mainland China. In addition, localized Ultraman toys are also recording favorable sales.
Moving forward, we might incorporate theidea of “local production, local consumption,”under which we would consider the possible
implementation of sales of China-originatedWe will work to maintain a corporate culturethat enables employees to think and takeaction without fearing failure.
Would you discuss the remaining two
strategies?
Kawaguchi: In expanding new business domains,

the Toys and Hobby Unit will take a broad
view of its business fields and work to create
new products and new businesses. Until now,
our business development initiatives havefocused on the fields of toys and hobby products.
However, moving forward we will also aggres­sively take on new challenges, such as utilizing
digital technologies and addressing demandfor experiences rather than things. In addition,
we will also step up collaboration with other
Units and external partners, and we will strive
to create and nurture our next business pillar.
In strengthening functions to maximize busi­
ness, we will implement organizational
restructuring and personnel development andwill formulate measures to address e-commerce,
which is expected to record further growth in the
future. In particular, in overseas markets businessgrowth is not possible without e-commerce.
Under the current Mid-term Plan, we will focus
on the establishment of a foundation for thefurther expansion of global e-commerce.
What IP and products will the Unit
focus on during the current fiscal year?
Kawaguchi: KAMEN RIDER ZI-O, for which

KAMEN RIDER ZI-O

©2018 石森プロ・テレビ朝日・ADK・東映

4

BANDAI NAMCO NEWS

Kira Kira Happy

Hirake! Cocotama©BANDAI / TV TOKYO・ここたま製作委員会

Bakutsuri Bar Hunter©鈴木サバ缶／小学館・爆釣団・テレビ東京

IP and products in the local market. In theseways, we will aim for further growth.
In Europe and the Americas, DRAGONBALL trading cards and collectable figures areenjoying favorable demand. Going forward,
we will further expand products for the mature
fan base. In addition, we will roll out products
in conjunction with the TV broadcasts of Disney
IP Big Hero 6, and roll out in-house IP, suchas Tamagotchi and Hyper Yo-Yo. In these ways,
we will work to increase the profitability of
our operations in Europe and the Americas.

broadcasts started in September, marks a turning
point as the 20th series of Heisei KAMENRIDER. The ability of the character to draw
on the powers of generations of KAMENRIDERS has been well received in the market.

BANDAI will launch a number of new products,
so there will be exciting developments as wemove forward.
Also, the new Himitsu no Cocotama series— Kira Kira Happy
Hirake! Cocotama— will start from September, and Bakutsuri
Bar Hunter TV animation , for which productroll-outs are already being implemented, will
start from the fall. The Toys and Hobby Unit’s
business development initiatives are centeredon products for pre-school children and ele­mentary school students, and the Unit plays amajor role within the Group in regard to thecreation and development of future BANDAI
NAMCO fans. Moving forward, we will strive
to roll-out products and services that touch thehearts of children and to create future oppor­
tunities for other Units as well.
Are there other focus products?
Kawaguchi: We have started to take orders for

Gundam Concierge Haro, a communication
robot. To establish the theme that guided thedevelopment of this product, we asked a ques­tion. What if Haro, the mascot robot thatappeared in the Mobile Suit Gundam series,
actually existed now? On that basis, we took
on the new challenge of incorporating AI into
IP products.
In addition, the Dango Mushi capsule toy
was launched in August. This product has ahigh profile, and at the same time, as a capsuletoy, it is environmentally friendly. As a result,
Dango Mushi received considerable

Masaru Kawaguchi
President and Representative Director,
BANDAI CO., LTD.

atten­tion at the International Tokyo Toy Show.
Moving forward, we will strive to rapidly takeon the challenge of creating these types of
products and services that incorporate newviewpoints.
What are your expectations of
employees?
Kawaguchi: We all work at an entertainment

company, and accordingly I would like to see
everyone do things that they really want todo, and to take on challenges that they consider
to be interesting, without fearing failure. The
BANDAI NAMCO Group has a corporate
culture that values independence and treats
failure as a learning opportunity. If you havean idea and take on the challenge of imple­
menting it, even if you fail you will be able
to leverage that experience in your next chal­lenge. If you can do that, then your career will
not suffer. I myself have failed many times
in my career. We need to strive to maintainour free and open-minded corporate culture
and to achieve further business growth andexpansion through the growth of individual
employees.

September 20185