NEWS LETTER

June 2016

BANDAI NAMCO Holdings Inc.
Management
Interview with the President

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

Outlook for FY2017.3

Results basically line with plans in thefirst year of the mid-term plan
Achieving record high level of net sales
Guided by our vision of “NEXT STAGE: Empower, Gain Momentum, Accelerate
Evolution,” the BANDAI NAMCO Group has completed the first year of the Midterm Plan, which aims for a new stage, and has started the plan’s second year,
FY2017.3, which will be the midpoint of the plan. In this issue of the newsletter, weasked BANDAI NAMCO Holdings’ President Mitsuaki Taguchi about progress with
the Mid-term Plan, the trends for each of the Group’s businesses, and the outlook
for the current fiscal year.

Would you provide an overview ofFY2016.3?
Taguchi: In FY2016.3, we achieved net

sales of ¥575.5 billion and operating incomeof ¥49.6 billion. This marks the achievementof record high net sales for four consecutive years. In consideration of the difficult
conditions faced by one business, inFebruary we revised the results forecast forthe full year. However, in the end we wereable to exceed the forecast level of results
due to strong performances in the Network
Entertainment business and the Visualand Music production business. This achievement was thanks to the diligent work ofGroup employees right up to the end of thefiscal year.
What is the situation for each business?
Taguchi: In the Toys and Hobby businessin Japan, Mobile Suit Gundam andDRAGON BALL products were popular,
as were products for older customers. Inaddition, Yo-kai Watch products also
enjoyed stable popularity. Moreover, theToys and Hobby business also recorded
favorable results in Asia, centered on
Gundam plastic models. In the Network
Entertainment business, extremely strong
growth was recorded in home video games
software and network content in Europe
and the Americas. Also, the amusement
facilities business recorded improved
earnings. On the other hand, conditions
were difficult in the arcade game machines
business. The Visual and Music production*IP: Intellectual property, such as charactersbusiness made a contribution to the Group’s
results with a favorable performance,
centered on the Love Live! School idol
project IP, for which we are rolling outcoordinated activities that include visualand music products as well as live events.
In addition, the Group as a whole recorded substantial growth in overseas sales.
Would you discuss the numerical planfor FY2017.3?
Taguchi: This fiscal year’s plan calls fornet sales of ¥580.0 billion and operating
income of ¥50.0 billion. At the time weformulated the mid-term plan, we weretargeting net sales of ¥560.0 billion andoperating income of ¥50.0 billion, so
this year’s numerical plan is basically inline with the mid-term plan. We will doour utmost to achieve these targets.

The first year of the mid-term plan wasfavorable.
Taguchi: We were able to achieve a certain

level of results both numerically andstrategically, and we made progress thatwas basically in line with the plan. Under
the Mid-term Plan, focus strategies include
strengthening the IP axis strategy andstepping up business development initiatives in overseas markets, especially inAsia, which has high growth potential.
By advancing these strategies, the plan
aims for the next stage through the establishment of a foundation that will enable
us to consistently achieve net sales ofMitsuaki Taguchi
President & Representative Director,
BANDAI NAMCO Holdings Inc.

¥500.0 billion and operating income of¥50.0 billion, both of which will markrecord-high levels.
Continuing on from FY2015.3, inFY2016.3 we were also able to achieve
record-high results, and accordingly I believethat the Group’s foundation has been steadily strengthened. However, in certain businesses we have failed to respond appropriately to changes in the operating environment, and in these fields we will need toincrease our speed somewhat and take on
new challenges. Moving forward, we willstrive to reinforce the foundation that weestablished in the plan’s first year and aim
for the next stage.
Would you discuss the Group’s measures
to strengthen the IP axis strategy?
Taguchi: In addition to the creation andnurturing of IP from products and services,
we will also make aggressive IP-related
investments. In FY2016.3, we acquired
new IP commercialization rights for DisneyPixar’s Finding Dory, which we will rollout on a worldwide basis. We also decided
to make WiZ Co., Ltd. a subsidiary, andwe made decisions on a number of otherinvestment projects in accordance with thestrategies of the Mid-term Plan.
There are still many things that we needto do to strengthen the IP axis strategy.
Currently, our IP axis strategy is proving tobe highly effective, but if we simply repeat
the same thing the strategy will becomestale. To further strengthen the IP axis strategy,
2016 June No.441

Management

Interview with the President

we must implement initiatives from theviewpoint that is optimal for the Group as awhole.
In regard to the established IP that has

supported our businesses, such as Gundam,
we will consider the ripple effects that reachthroughout the Group and, as needed, takeon the challenge of new business development

Implementing a range of initiatives, including
investment to strengthen the IP Axis Strategy
We established the IP Strategy Division
within BANDAI NAMCO Holdings as
the organizational unit that will oversee
these strategies and investment policies.
Moving forward, we will work to trackthe needs of each business and region,
and we will implement selection andconcentration. At the same time, we will
implement investment when necessary
and take steps to strengthen the IP axis
strategy from a long-term viewpoint.
What is the current situation in theToys and Hobby business?
Taguchi: In Japan and the rest of Asia,

Gundam plastic models are doing exceptionally well. In the future, we will implement a range of initiatives at the sametime in Japan and the rest of Asia, such as
product roll outs, online video distribution,and events. We will step up our efforts inthese areas. In established IP, KAMENRIDER Ghost and Doubutsu Sentai
Zyuohger are showing stable popularity
among boys. In the Ultraman series, which
this year will reach the 50th anniversaryof its first broadcast, a new program —Ultraman Orb — will begin in July. I
would like to increase our share with thesethree IP for boys. For girls, we havestrengthened our IP lineup with the addition of Kamisama Minarai: Himitsu noCocotama to the existing PRETTY CURE!
and Aikatsu!. We also plan to launch new
products in the Tamagotchi series, whichmarks its 20th anniversary this year. Inaddition, we will introduce strategic prod-Mobile Suit Gundam plastic models
have been popular in simultaneous
Japan-Asia initiatives.
©創通・サンライズ・MBS

2BANDAI NAMCO NEWSucts in the Yo-kai Watch line, which is oneof our focus IP.
What is the status of overseas business?
Taguchi: In Asia, we will work to expand

the success of Gundam plastic models toa wider area. We will also step up initiatives
involving products and services for older
customers, including events. Moving forward, we will continue working aggressively to expand Asian markets by being
the first to identify needs in Asian markets
and launching innovative new products.
In North America, the new Power
Rangers series, which is currently being
broadcast, is recording favorable results,
and there will be a film version in March2017. In addition, this year Finding Dory
will be rolled out on a worldwide basis,
and accordingly we expect to see gains
in BANDAI NAMCO’s market presence.
Furthermore, we will work to create
merchandise based on Miraculous, an IP
for girls that is popular in TV broadcasts
in North America. In these ways, we willtake steps to strengthen our IP lineup.
What was the objective of making WiZ
a subsidiary?
Taguchi: WiZ, a company that plans anddevelops toys, has worked on such products as Tamagotchi and Digimon, and theBANDAI NAMCO Group and WiZ havepreviously worked together as partners.
In that sense, we know each other well.
With WiZ joining the BANDAI NAMCO
Group, we will be able to understand each

initiatives, including investment.

other more quickly. I also think that wewill be able to implement new initiatives
more rapidly.
What is the situation in NetworkEntertainment?
Taguchi: In home video game software,

we are recording extremely favorable
results in Europe and the Americas.
Cumulative shipments of DRAGONBALLXENOVERSE, which was launched lastyear, have surpassed 3.8 million units
worldwide. Naruto Shippuden: Ultimate
Ninja Storm 4, which was launched inFebruary 2016, has gotten off to a goodstart, and DARK SOULS III, which waslaunched in April, has taken off like arocket, with shipments exceeding 3 million units in just one month. In addition,leveraging our overseas sales network,
we continue to strengthen our sales ofother-company titles, centered on Europe.
In the domestic market for home video
game software, we will launch Tales ofBerseria and other titles that can be expected to record stable popularity.
In network content, which contributed
to our results in FY2016.3, our lineup
remains popular in Japan and overseas,
centered on such core game applications
as IDOLM@STER, DRAGON BALL, andONE PIECE. In the future, we will continue to introduce new titles while working tomaintain the popularity of mainstay titles.
In addition, it has been about one year sincewe commenced full-scale business development initiatives overseas, and we aresteadily accumulating knowledge regarding
such factors as the consumer preferences
and market characteristics in each region.
In the world of networks, there are no

Naruto Shippuden: Ultimate Ninja Storm 4, got off to a good start, centered on Europe and the Americas.
©岸本斉史 スコット／集英社・テレビ東京・ぴえろ©劇場版NARUTO製作委員会 2014
©BANDAI NAMCO Entertainment Inc.

Love Live! School idol project was a major
topic of conversation throughout the year.
©2015 プロジェクトラブライブ！ムービーOutlook for FY2017.3borders separating domestic and overseasmarkets, and moving forward we will work
to implement planning activities that incorporate the global market viewpoint fromthe development stage.
What is the status of the amusementbusiness?
Taguchi: We have implemented a range ofinitiatives for amusement facilities, suchas focusing resources on core facilities,
taking steps to increase efficiency, andexpanding facilities with new formats. As
a result, earnings have improved. On theother hand, we conducted a rigorous examination of the business following weaksales in arcade game machines in theprevious fiscal year. This year, we have amore agile structure, and we are currently
moving forward with a project to determine
our future direction.
In game machines and in all other formsof entertainment, the key point is the extent
to which we can understand customers
and develop entertainment accordingly.
In Odaiba, Tokyo, we recently opened theVR ZONE Project i Can on a limited-timebasis. This project enables the enjoymentof virtual reality (VR). This is anotherchallenge that will enable us to verify thepossibilities of new entertainment. We
have places for the provision of entertain-

ment, and we also have know-how in theutilization of technical capabilities and IP.
By combining these assets, I believe that
we can achieve a more appealing approach.

Initiatives to Generate New Customers—
Developing the Ability to Address Changes in the Operating Environment
How about Visual and Music Production?
Taguchi: For Love Live! School idol

project, which is very popular, a new TV
animation — Love Live! School idol
project Sunshine!! — will start fromsummer 2016. In addition, a new idol
unit, Aquours, has also made its debut.
As with Love Live! School idol project,
we will work together with fans to carefully nurture the IP. With Mobile Suit
Gundam, we will offer products for eachtarget customer group. For existing
Gundam fans, we will provide such products as Mobile Suit Gundam THE ORIGIN
and Mobile Suit Gundam UC. And for
new fans, we will offer Mobile Suit
Gundam: Iron-Blooded Orphans andMobile Suit Gundam Thunderbolt.
What are you looking forward to invisual and music related areas?
Taguchi: The Girls und Panzer IP willenter its fourth year, and the theatricalversion, which has become a hit and has
been seen by more than 1.1 million people, continues its run in the theaters. Inaddition, broadcasts of Macross Deltabegan in April, and this show has beenhighly evaluated. Moreover, Aikatsu! Starsand BattleSpirits Double Drive, which
are closely linked with the Toys and Hobby
business, have also been launched.
Live events have been built into a new
business pillar, and we have expanded
the related businesses into such areas aslive viewings and sales of goods. Our
multi-dimensional business development
activities, which fuse real and virtual
initiatives, have been primarily targetedat male customers. Moving forward,
however, we will step up initiatives forfemale customers, such as the stage version of Kuroko’s Basketball and Dream
Festival!, which is linked with the Toysand Hobby business. In the future, througha joint venture company in France thatwas established in April by Lantis andAmuse Inc., we will implement public
performances and take other steps toapproach overseas anime fans and IP fans.
Would you discuss the Group’s future
policies?
Taguchi: To the Group’s employees, I havesaid “Let’s generate new customers.” Ofcourse, we must continue to focus thoroughly on existing customers. On theother hand, we also must do our utmost
to attract new customers with initiatives
in new services, new areas, and new IP.
And then, we must have the stablecapabilities needed to properly continue
our businesses, no matter how the platform
and network environments change. The
center of those initiatives will be IP. Likemusic and sports, IP is a cultural asset
that facilitates communication amongpeople around the world in a way thattranscends national boundaries. An
important question that we face is how
to deliver our products and services tothe people around the world who areeagerly awaiting them. In that sense, wewill also work aggressively with external
partners and strive to rapidly introduce
new energy and new possibilties into theBANDAI NAMCO Group. I would liketo ask for everyone’s continued support
in the years ahead.

New Candidates for Director at BANDAI NAMCO Holdings
After approval at the General Meeting of Shareholders scheduled for June 20, plans call for Masaru Kawaguchi, President andRepresentative Director of Bandai, to become a director, and for Satoko Kuwabara and Mikiharu Noma to become outside directors.
Director candidate:Outside director candidate:Outside director candidate:

Masaru Kawaguchi

Satoko Kuwabara

Mikiharu Noma

President and Representative Director of

Partner of Mori Hamada & Matsumoto

Associate professor, Graduate School of

BANDAI CO., LTD. (incumbent)(incumbent)International Corporate Strategy (ICS),

Executive Officer of BANDAI NAMCO

Hitotsubashi University (incumbent)

Holdings Inc. (incumbent)

2016 June No.44

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