NEWSLETTER

December 2019
BANDAI NAMCO Holdings Inc.

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

Interview with the President

New record highs for net sales and profits inthe first half of FY2020.3
Accelerating challenge and CHANGE as wemove ahead
BANDAI NAMCO Holdings has announced its results for the first six months of
FY2020.3 (April to September, 2019). In this issue of the newsletter, BANDAI
NAMCO Holdings’ President Mitsuaki Taguchi discusses the results for the Groupand the trends in each business.
The results for the first half of
FY2020.3 have been announced.
Taguchi: In August, when we released theWhat are the full-year results­forecasts for FY2020.3?
Taguchi: At this point, there are no changes

results for the first quarter of FY2020.3, we
also announced the forecasts for the first halfof the fiscal year. Our results for the six-month
period exceeded the forecasts in the Toys andHobby business, where favorable results wererecorded by products for the mature fan base,and in the Network Entertainment business,where core network content titles remainedsolid and repeat sales of home video games
continued strong. Consequently, we achieved
net sales of ¥349.3 billion and operating incomeof ¥47.9 billion. This marks the achievementof record-high sales and profits for the firstsix months of a fiscal year. I believe that thisachievement is attributable to the sincere effortsof Group employees around the world to address
the needs of fans through products and services
that leverage IP.
The interim dividend for FY2020.3 willbe ¥20 per share. We will consider year-end
dividends in accordance with our basic policy
for shareholder return, which calls for stabledividends while targeting a total return ratioof 50% or more based on stable dividend
payments of 2% of dividends on equity (DOE).

to the forecasts for the full fiscal year. There
are a number of reasons for this. First, theoperating environments around the world arechanging dramatically, and we must lookcarefully at the effect of these changes onmarket and user trends. Also, in the second
half, we have the busy year-end/New Yearsales period, and we plan to launch major
home video game titles. In consideration ofthese factors, we believe that we need to carefully consider our results. In addition, we wantto continue to aggressively invest in technicalresearch, etc., that will enable us to addresschanges and record growth in the future.
Thanks to everyone’s hard work, we recorded
favorable results in the first half, but we are
not optimistic about future forecasts. In thisera of rapid change, in order to address changes
in the times and in fans, we will continue
working to accelerate challenge and CHANGE.
The Group has announced a tender
offer for the stock of SOTSU CO., LTD.
Taguchi: The BANDAI NAMCO Group and

SOTSU have had a relationship as partners
in the Mobile Suit Gundam business for many
years. With SOTSU as a member of the Group,
we will be able to advance more-unified­strategies that will be useful in the implementation of full-scale initiatives to make Gundam

Mitsuaki Taguchi
President & Representative Director,
BANDAI NAMCO Holdings Inc.
a worldwide IP. By unifying the value chain
in the Gundam business, we will strive toincrease the value of the Gundam brand, notonly in Japan but around the world.
Would you discuss the trends in eachbusiness?
Taguchi: Distribution of the SD GUNDAMWORLD SANGOKU SOKETSUDEN and
Gundam Build Divers RE: RISE animations
has already commenced, and related Gundam
plastic models are recording favorable resultsin the Toys and Hobby business. Moving forward, we will work to strengthen points of contact
with fans through such ­initiatives as HOBBYEXHIBITION, a ­comprehensive plastic model
event, and the GUNDAM PLASTIC MODELBUILDERS WORLD CUP, a global event for
Gundam plastic model building. In 2020,
Gundam plastic models will reach their 40th
anniversary, and accordingly we will work to
generate buzz through the release of a series of
products. In collectible figures, we will takesteps to ­highlight the appeal of our brands andproducts, including real events like the TAMASHIINATION events in markets around the world
as well as campaigns on e-commerce sites.

*IP: Characters and other intellectual property

A

BANDAI NAMCO NEWS

December 20191

Interview with the President

Placing importance on communications withfans and implementing initiatives that­leverage BANDAI NAMCO’s distinct strengths
Taguchi: For Japan’s busy year-end/New Yearsales period, we will launch a series of strategic
products and buzz-creating products, centeredon established IP, such as KAMEN RIDER,
Super Sentai, and DRAGON BALL.
As a new challenge, ZENONZARD, a digital
card game app that integrates a card gameand AI, was placed into service in September,and it has gotten off to a solid start. ZENONZARD is the first investment project implemented
under the BANDAI NAMCO Content Fund.
Moving forward, we will distribute animations,etc., centered on apps, and take steps to nurture
the ZENONZARD IP. We will also work toincrease the number of users by holding on-line
events and events utilizing real venues.
What is the situation in the Network
Entertainment business?
Taguchi: In network content, competition isintensifying. In this setting, we will work tomaintain the popularity of our core titles, suchas DRAGON BALL, ONE PIECE, and THE
IDOLM@STER series, and we will also launch
new titles. GUNDAM BREAKER MOBILE,
which was introduced this past summer, has
become popular, and moving forward we willcontinue working to develop high-quality titles
and to bolster communication with fans.
­Furthermore, from October we started distribution of a new PAC-MAN title on Apple

Arcade, a new content outlet. PAC-MAN willreach its 40th anniversary in 2020. Accordingly,
from the end of this year, we will take a variety
of steps to generate interest and create buzz,
centered overseas.
In home video games, major title launches
in the second half and thereafter will include
DRAGON BALL Z KAKAROT and ONE PIECE
Pirate Warriors 4, and we are also planning
to introduce ELDEN RING, although the timingof that launch has not yet been determined.
We have already announced our participationin Stadia, and we will take a forward-looking
approach to new platforms that will be­introduced in the future. In home video games,
we also need to strengthen quality and fan
communications, and to implement long-term
initiatives. To bolster the presence of BANDAI
NAMCO on the global stage, in addition todevelopment in Japan, it will also be necessary
for local companies, which have the best
understanding of overseas users, to take aleading role in title production.
Furthermore, we will continue to maintaina good balance between joint developmentwith external partners and in-house d­ evelopment.
At the same time, to increase quality we will
step up our efforts to improve our in-house
technical development capabilities.

Digital card game app ZENONZARD (currently in distribution)©BANDAI・STRAIGHT EDGEThe Network Entertainment business is
expanding to areas outside of games.
Taguchi: New challenges that are not limitedby the game framework include popular­initiatives in such areas as live events andtours utilizing game IP. In addition, we haverecently begun to participate in the managementof a professional basketball team, the Shimane
Susanoo Magic. Through collaboration l­ everaging
the know-how of BANDAI NAMCO, we will
strive to foster excitement for sports as a formof entertainment and to share that excitementwith fans.
What is the situation in the RealEntertainment business?
Taguchi: In Real Entertainment, existing f­ acilities

in Japan are recording favorable results. Mobile
Suit Gundam: Extreme Vs. 2, an arcade gamethat was launched last year, has recorded
favorable operating results, and in addition
popular items include ONE PIECE film-related
prizes that the business developed in conjunction with the Toys and Hobby business, prizes
linked to the DRAGON BALL app, and prizes
limited to BANDAI NAMCO Amusement
facilities. Going forward, the business willcontinue working to differentiate its operations
from those of other companies by implementingroll-outs that leverage BANDAI NAMCO’s
distinctive strengths in communicating the worldviews of IP through products and services.
In new-format facilities, the business istaking on challenges in the area of various
planning initiatives that leverage our technicalstrengths and other know-how. Going forward,

Home video game DRAGON BALL Z KAKAROT(Launch planned for January 2020)©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.

Animation product Star Blazers: Space Battleship Yamato 2202

©西﨑義展/宇宙戦艦ヤマト2202製作委員会

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BANDAI NAMCO NEWSthe Unit will roll out multiple facilities in
popular ­formats, such as VS PARK and TONDEMI. In regard to new amusement machine
products, we are advancing preparations forthe launch of multiple IP titles, such as JoJo’s
Bizarre Adventure: Last Survivor.
What is the situation in the Visual andMusic Production business?
Taguchi: In Visual and Music Production, in

addition to initiatives within the Group, we arealso aggressively advancing IP production incollaboration with external partners, such as
participating in production committees. Recently,
favorable performances have been recordedby such visual products as One-Punch Man,
which is also popular overseas, and That Time
I Got Reincarnated as a Slime, for which thesecond stage of broadcasts has been confirmed.
The shift toward a business model centered onoverseas sales and distribution is advancing.

Moreover, with the objective of strengthening
its IP creation capabilities, BANDAI NAMCO
Arts invested in studio MOTHER, an animation
production company. Voyager Holdings Inc.,
which created Space Battleship Yamato, led
the establishment of studio MOTHER, a­production studio. Through this investment,
we have strengthened our ability to create hit
content by bolstering the animation production
line. Moving forward, we will work to bolsterroll outs of the Space Battleship Yamato series
in partnership with Voyager Holdings.
As a new Groupwide initiative, in c­ ollaboration with the Network Entertainment business,
the Visual and Music Production business is
we are advancing Futsal Boys!!!!!, a new media
mix project linking animations, smartphonegame apps, and real futsal games.
Please discuss the IP Creation Unit.
Taguchi: For Mobile Suit Gundam, which hasreached its 40th anniversary, we are taking
a variety of steps to create buzz, such as
releasing commemorative products, introducing­collaborative products, holding events, andestablishing an official YouTube channel. Goingforward, we will take steps to further enhancerecognition around the world by installing alife-size Gundam statue that moves, rollingout a live-action film that is currently in joint
development with Legendary, etc. For the Love
Live! series, we will continue working to create
buzz by holding a live event for the 9th consecutive year and launching products.
In addition, SUNRISE has invested inechoes Inc., which operates one of Japan’slargest platforms exclusively for contributionsof original manga. echoes Inc. won the
BANDAI NAMCO Accelerator 2018 award.
Through the partnership between these twocompanies, we will work to create new IP,
activate existing IP, and discover creators.

Working to create new IP and bolster­established IP in order to strengthen
the IP axis strategy
What are your thoughts about thefirst half of the Mid-term Plan?
Taguchi: Under the current Mid-term Plan,

we are further strengthening the IP axis strategy,
which is BANDAI NAMCO’s strength, andbolstering global roll-outs. We are advancing
a variety of measures in China, which has
high potential for business expansion and has
been positioned as a key region.
In strengthening the IP axis strategy, ourmajor focus is the creation of new IP. Our
plan calls for strategic investment of ¥25.0
billion over three years, and from the start ofthe plan through the first half of this fiscal
year we had implemented cumulative total
investment of ¥11.0 billion. We are approaching
this issue from a range of angles. Specifically,
these include initiatives from each business,initiatives implemented on Groupwide basis,
investments by the BANDAI NAMCO Content
Fund, and the BANDAI NAMCO DREAMSUPPORT PROJECT, which aims to nurture
creators. We will steadily give shape to theseplans, so please stay tuned for further information. With established IP, we will take steps

to further bolster our strengths. For Gundam,
DRAGON BALL, ONE PIECE, and otherstrong, established IP, we will work together
with licensors and other external partners andconduct global initiatives.
In China, which is a key market, products
for the mature fan base and network content
are popular, and sales in the first half wereapproximately ¥13.5 billion. In the future,in addition to expanding each business, theholding company in Shanghai and the o­ peratingcompanies will cooperate under the ALL
BANDAI NAMCO concept and we will work
to build a system that enables us to leverage
our comprehensive strengths. In addition,
together with Shueisha, we have establisheda new joint venture company and are planningto roll out products that communicate theappeal of the original IP to local fans. In China,
we will implement close collaboration not
only within the Group but also with local
partners, aim for sustained growth over the
medium to long term, and work to solidly
reinforce our foothold.

Has the formulation of the next
­Mid-term Plan already started?
Taguchi: At a recent off-site meeting held withthe participation of all inside and outside­officers of BANDAI NAMCO Holdings, we
held dynamic discussions about our future
direction. At this meeting, we reconfirmed
the IP axis strategy as our central strategy
supporting sustained growth for BANDAI
NAMCO, as well as the importance of softwarein an environment marked by dramatic change
in media infrastructure. To further bolster the
IP axis strategy, in addition to leveraging strong,established IP, the key will be the extent towhich we can create new IP and roll it out inglobal markets.
Moving forward, BANDAI NAMCO willcontinue to flexibly change in line with thetimes as we take on new challenges. Our futurelies beyond change. As we move toward
a future in which we can communicate withfans around the world through our products
and services, BANDAI NAMCO will continue
to act in a bold manner in taking on challenges
and CHANGE.

December 20193

Closeup

In an operating environment marked bydramatic change, we will take on new ­challenges­without being limited by previous frameworks
The Network Entertainment Unit, which conducts planning, development, distribution,and sales of network content, home video games, etc., has announced the mid-term
vision of being a “Transnational Company” Creating Value for Consumers. To
develop its business, the Unit will aim to work from a global viewpoint and continue
to provide value that is always a half step ahead of the needs of users. In this section,
Yasuo Miyakawa, who became president and representative director of BANDAI
NAMCO Entertainment Inc., the Unit’s core company, from FY2020.3, discusses
the market environment, current business trends, and future strategies and visions.

with download sales now advancing rapidly,
it is necessary to implement initiatives thattranscend national boundaries. We must change
from the previous approach of making products
in Japan and selling them overseas. We need
to work as a “global company,” with local
subsidiaries in each region working from theirvarious perspectives to make and sell products
for worldwide markets. We are already­producing games originating in certain overseas
regions, and going forward we will strive tofurther expand these initiatives.
The company is also taking steps to

It has been six months since you
became president.
Miyakawa: In April 2019, I left my position

as president of SUNRISE, the core company
in the IP Creation Unit, to become the presidentof BANDAI NAMCO Entertainment. There
are differences in the products and services
offered by these two Units, but both businesses
are the same in the sense that they offer entertainment. Moving forward, I would like totake on a variety of challenges to ensure that
we can continue to provide high-quality content
that leverages BANDAI NAMCO’s distinct
strengths and reflects abundant ­creativity, whileconnecting with customers.
What are your thoughts about theoperating environment?
Miyakawa: The entertainment business model
is changing rapidly. For example, the s­ ubscription
business, which was rapidly adopted in thefields of music and visual ­products, is also
starting to make gains in the game industry,
and the advance of CG and communications

 nnouncement of participation in the ­management
Aof the Shimane Susanoo Magic

technologies is breaking down the boundaries
between visual products and games. Accompanying these changes, giant companies fromother industries, which were not previouslycompetitors, have started to enter the market
in large numbers.
In addition, we are starting to see a transition
from an era in which business operations ended
with the sale of a completed product to an eraof an “ongoing operations business model”
in which games are periodically updated andevents are held so that the same game can beenjoyed for an extended period of time. In
these ways, the business environment is­changing dramatically, and in this setting I
think we have reached the point where wemust make bold changes.
Are there any changes in the area ofmarketing?
Miyakawa: During the era in which gamesoftware was primarily distributed and soldas a tangible product, strategies were consideredat the level of countries and regions. However,create a new entertainment businessthat transcends the game framework.
Miyakawa: In April 2015, the company namewas changed from BANDAI NAMCO Games
to BANDAI NAMCO Entertainment. The newname incorporates the idea of taking on thechallenge of providing services and content thatleverage BANDAI NAMCO’s distinctive
strengths by broadly defining our field of businessas entertainment rather than limiting ourselves
to our existing business in the field of games.
One initiative that is representative of thisidea is our participation, from August, in the
management of the Shimane Susanoo Magic,
a B.League professional basketball team basedin Japan’s Shimane Prefecture. The world ofsports is analog rather than digital, but we believethat as the digital society p­ rogresses the importance of the analog world will increase. For
example, holding e-sports tournaments in a realvenue, rather than over the Internet, enables
competitors and customers to actually gather
together, and this has an appeal that can only
be experienced in an analog setting.

 RAGONBALL XENOVERSE 2
D(Plan for online distribution to Stadia)©BIRD STUDIO/SHUEISHA, TOEI ANIMATION©BANDAI NAMCO Entertainment Inc.

BANDAI NAMCO Entertainment Festival©SUNRISE/PROJECT L-GEASS Character Design©2006-2017 CLAMP・ST

4

BANDAI NAMCO NEWSThe Shimane Susanoo Magic have justmoved back up to the B1 level this year. Fansand members of other local communities havebeen drawn together, and the team’s efforts
to move up have fostered interest in the dramaof competition. I think it will get even moreinteresting going forward. We will strive toimplement initiatives that leverage BANDAI
NAMCO’s distinct viewpoint, such as creative
measures at venue booths and collaborations
between our IP and the Shimane Susanoo
Magic. In these ways, we will work together
with members of the local community andfans to create and sustain an atmosphere of
excitement around the team.

The BANDAI NAMCO Entertainment
Festival was also quite successful.
Miyakawa: The BANDAI NAMCO ­Entertainment

Festival was held on October 19 and 20 at theTokyo Dome. It was our first festival-style
live event featuring appearances by large
numbers of artists and idols connected with
the BANDAI NAMCO Group’s IP. The objectives were to entertain the fans of each IP as
well as to create opportunities for fans to learn
about other IP. Both days were sold out, andthe festival was a major success. Going forward, we will strive to communicate the appealof the IP rolled out by BANDAI NAMCO as
we leverage these types of real venues in
addition to digital fields.

Planning to launch multiple new major titles
and aggressively taking steps to address new
platforms
What is the situation with roll-outs inthe second half?
Miyakawa: In home video games, we launched

CODE VEIN, which is entirely original IP
from the company, in late September. We areaiming for shipments of one million units
during the current fiscal year. In addition, weplan to launch multiple major new titles, suchas DRAGON BALL Z KAKAROT (launchplanned for January 2020), ONE PIECE Pirate
Warriors 4 (launch planned for March 2020),
and ELDEN RING, which was jointly developed with FromSoftware Inc. (launch timing
not yet determined).
In network content, we will continue ourefforts to sustain the popularity of core titles,
such as the DRAGON BALL series, ONE
PIECE, and THE IDOLM@STER series.
Moreover, we started on-line distribution of
GUNDAM BREAKER MOBILE in the first
half, and it has been popular in Japan andoverseas. Moving forward, we will continue
to take on the challenge of new titles thatreflect the same dedication to quality.
Moreover, we are also working aggressively
to address new platforms. From October, westarted distribution of PAC-MAN PARTY
ROYALE on Apple Arcade, the subscription

service operated by Apple. Furthermore, weplan to distribute DRAGONBALL XENOVERSE
2 through Stadia, a cloud game platform beingrolled out by Google. We are aiming to makethese initiatives into opportunities to put ourgames into the hands of fans that we previously
were unable to reach.
In 2020 PAC-MAN will reach its 40th
anniversary.
Miyakawa: We believe that PAC-MAN, whichis in-house IP, holds significant potential. We
plan to implement initiatives for the 40th
­anniversary, centered overseas. In advance of
those initiatives, in November we launched ateaser site and released a music video. In addition, we exhibited at ComplexCon, a cultural
event in the U.S. PAC-MAN has an especiallystrong presence in the U.S., much stronger
than in Japan, and we will implement a variety
of measures from the U.S. to regions aroundthe world. In this way, we will strive to­communicate the new appeal of PAC-MAN.

Yasuo Miyakawa
President and Representative Director,
BANDAI NAMCO Entertainment Inc.

you will have a failure, but if you don’t giveup and continue until you succeed, then you
won’t really fail. I have told our employeesthat it is important to have an image of successand to work towards that success with­everything you’ve got. If you don’t take onchallenges, then you won’t succeed and you
won’t grow. Of course, challenges that involverisks exceeding the scale of the company require
careful judgment by leaders, but going forward
I want to create an environment in which each
employee is able to take on challenges without
fearing failure.

What are your policies toward work?
Miyakawa: I like the phrase “If you keep on

trying until you succeed, then you won’t really
fail.” If you quit as soon as you fail once, thenDecember 20195