Newsletter No.75 March 2024

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 YoY growth in net sales,
which reached a record high.
Operating income affected by valuation
loss,etc., in the Digital Business.
Bandai Namco Holdings Inc. has announced its results for the first ninemonths of FY2024.3 (April to December, 2023). In this issue of the newsletter,
President Masaru Kawaguchi discusses the results, the current circumstancesin each business, and other matters.

Would you provide an overview of theresults for the first nine months ofFY2024.3?
Kawaguchi: In the first nine months of FY2024.3,
net sales were ¥772.0 billion and operating
profit was ¥78.2 billion. Net sales increased YoY
and reached a new record high. Established
IP* products and services, such as the Gundam
series, DRAGON BALL, and ONE PIECE, continued
to demonstrate a strong market presence ineach business.
Looking at operating profit, in the Digital
Business, we recorded a valuation loss for new
online game launched during the current fiscal
year and other titles, as well as a disposal loss
that resulted from reevaluation of the title
lineup with a focus on the next Mid-term Plan.
By business, the Toys and Hobby andAmusement Businesses continued to achieve
record-high results. As for sales, in the Toysand Hobby Business, favorable results wererecorded worldwide by Gundam series modelkits for the mature fan base, by card products,
and by other items. This business played asignificant role in leading Group sales. Looking
at operating profit, growth was recorded inthe Toys and Hobby Business, in which products with high profit margins were popular.
On the other hand, the Digital Business wasaffected by a YoY decline in repeat title unit
sales for home console games and by adecrease in the download sales ratio.
Also, we recorded a valuation loss for new
online game launched during the current fiscal*IP: Characters and other intellectual property

year and other titles. In addition, as a resultof the reevaluation of the title lineup, werecorded a disposal loss due to halting development on more than five titles.
In the entertainment industry, results areinfluenced by whether or not a company has
hit products. However, Bandai Namco implements portfolio management over a wide rangeof businesses, and we are bolstering the strengthof our earnings platform, which enables us togenerate stable earnings, whether or not wehave hit products. As a result, I think that, to acertain extent, we were able to offset businesses
that faced difficult conditions.
In regard to our results forecasts for the full
fiscal year, with consideration for the resultsin the first nine months, the fourth quarter
product and service marketing plans, etc., werevised the forecasts to ¥1.0 trillion in net sales,¥82.0 billion in operating profit, and ¥93.0 billion in recurring profit. For profit attributableto owners of parent, we will implement a partial
sale of investment securities, and accordingly
the forecast has not yet been determined.
Would you provide a detailed overview
of the circumstances for each business inthe third quarter?
Kawaguchi: In the Digital Business, looking at
network content, major app titles, such as
DRAGON BALL and ONE PIECE, recorded stable
results worldwide due to ongoing measuresfor customers. On the other hand, the resultsof new online game title fell short of plannedlevels by a substantial margin. In home consolegames, ARMORED CORE VI FIRES OF RUBICON,a new worldwide title, was popular. In homeconsole games overall, results were affectedby a difference in the product mix in comparison
with the same period of the previous year,
when, repeat sales of ELDEN RING made a significant contribution.
The performance of the Toys and Hobby
Business remained strong due to efforts insuch areas as expanding product lineups andglobal initiatives in categories that are doing
well, strengthening production systems, andexpanding customer touchpoints through real
events and stores. Specifically, products forthe mature fan base, such as Gundam model
kits, collectible figures, and character lottery
products, continued to perform favorably, due
mainly to initiatives in the areas of sales, marketing, and product lineup expansion. In
addition, contributions to results were madeby such products as the ONE PIECE tradingcard game and other card products, capsuletoys, confectionery, and food. These results
were attributable to initiatives to strengthen
product lineups, broaden target customer
groups, reinforce customer touchpoints, etc.

(Continued on next page)
March 2024 No.75

1

(Information in this section is as of the end of 14th February 2024.)

Management

Interview with the President

Demonstrating our market presence withestablished IP, such as the Gundam series,
DRAGON BALL, and ONE PIECEIn the IP Production Business, in visual work
production, we produced multiple new works,
including TV animations and theatrical works.
Of these, Mobile Suit Gundam THE WITCH FROMMERCURY enabled us to secure new fans andwas linked to favorable sales of Group products and services.
Furthermore, we achieved stable resultswith licensing operations, video streaming,etc., for the Gundam series, the LoveLive! series,
IDOLiSH7, That Time I Got Reincarnated as aSlime, BLUELOCK, and others. In addition,
GUNDAM FACTORY YOKOHAMA had favorable
results in addressing inbound demand, etc.
In the Amusement Business, sales at existing
amusement facilities in Japan were up 2.4%
year on year. In addition, we made favorable
progress with store development initiatives
leveraging Bandai Namco’s distinct strengths.
These initiatives, which involved collaboration
with the Groupʼs products and services,
included Bandai Namco Cross Stores andGASHAPON Department Stores. In amusement
machines, favorable results were recorded bysuch initiatives as update kits for Mobile Suit
Gundam: Extreme Vs. 2 OverBoost and Mario
Kart Arcade GP DX.
Would you discuss the trends and future
focus topics for the Digital Business?
Kawaguchi: In the Digital Business, in regard
to the development system, we are advancing
stricter title screening through the introductionof Support Committee, in addition to the existing Title Screening Committee. In addition,
we will aim to have an optimal title portfoliothat reflects multi-faceted viewpoints, and wewill implement strategic development initiatives. Moreover, we will deepen collaboration

GUNDAM FACTORY YOKOHAMA addressed inbound demand(in operation to the end of March 2023).

2with Bandai Namco Studio Inc., development
studios, and strengthen management of theentire development process.
Recently, we launched TEKKEN 8 on January 26. It has been highly evaluated by fans,and sales are approaching 2 million units.
Going forward, we will continue to implement
fan communications initiatives and strive tonurture this product into a long-lived title. We
are also currently preparing to launch ELDEN
RING download content and DRAGON BALL
Sparking!! ZERO (a new title). To meet theexpectations of the fans that have been waiting, the Digital Business will sincerely addressfans and move forward with development
while focusing on quality and other areas.
What are the circumstances in the Toysand Hobby Business?
Kawaguchi: The market environment reflects
growing worldwide recognition of IP. Accordingly, we are strengthening global initiatives
for products such as Gundam model kits,collectible figures, capsule toys, and cards. Inparticular, we are currently bolstering eventsand directly-managed stores, which are pointsof contact with fans. In this way, we are actively
implementing activities to foster recognitionof the quality of our products and to expand
brand awareness. In addition, to address
demand, we are strengthening production
systems and e-commerce sales systems.
In card games, whic h are doing well, since
the end of 2023 we have been implementing
a world tour in six countries and regions. Thishas been effective in creating buzz in termsof both visitors and sales. Moreover, in February we implemented a worldwide launchof a new DRAGON BALL card game that involves©創通・サンライズ

BANDAI NAMCO NEWS

both paper and digital cards. Going forward,these DRAGON BALL card products and othercard games that are currently on sale will be
developed as established products in thetrading card game market over the long term.
The Toys and Hobby Business commercializes more than 400 IP a year and launchesapproximately 100 new items each day. For
established IP products, such as the Gundam
series, DRAGON BALL, ONE PIECE, KAMEN RIDER,and Ultraman, we have established a stable
platform by collaborating with media andimplementing commercialization initiatives
on a worldwide basis. In addition, anime anda variety of other areas give rise to new IP, andgoing forward we will rapidly commercialize
this IP in suitable categories and continue toexpand our IP portfolio. For the full fiscal year,
the Toys and Hobby Business will aim toachieve another record-high performance.
What is the situation in the IP Production
Business?
Kawaguchi: Mobile Suit Gundam SEED FREEDOM is a theatrical work that opened inJanuary. It has been very well received, andin the first 18 days after its opening, it wasseen by 1.63 million people and registeredbox-office revenues of over ¥2.68 billion. Goingforward, we plan to make this work available
in a variety of countries and regions in stages.
In addition, GUNDAM FACTORY YOKOHAMA,
which I mentioned previously, has been thefocus of buzz among fans around the world.
In the future, this business will work in close
cooperation with product merchandising
to increase and maintain the Gundam fanbase worldwide. Also, we are preparing tolaunch a BLUELOCK theatrical work and a
new anime for That Time I Got ReincarnatedONE PIECE CARD GAME official shop has achieved solid results.
©尾田栄一郎／集英社©尾田栄一郎／集英社・フジテレビ・東映アニメーション

TEKKEN 8 has gotten off to a favorable start.

TEKKEN™ 8 & ©Bandai Namco Entertainment Inc.

as a Slime, so please look forward to these
initiatives.
What are the trends in the Amusement
Business?
Kawaguchi: We have had favorable results witha variety of initiatives. These include a campaign
implemented in collaboration with the Toysand Hobby prize business; Bandai Namco CrossStore measures implemented in cooperation
with Group IP, products, and services; andGASHAPON Department Stores initiatives. We
are moving ahead with the opening of facilities
overseas. At these facilities, we do not simplysell merchandise. Rather, we provide added
value that leverages the distinctive strengthsof the Bandai Namco Group. Examples include
highlighting the appeal of IP worldviews andteaching about ways to enjoy IP.
Looking at amusement machines, westarted operation in inland China of an online
machine cabinet for Taiko no Tatsujin, which

has gotten off to a strong start. Inaddition, in spring 2024 we will
launch a new work in the popularseries WANGAN MIDNIGHT MAXIMUM TUNE, and we are currently
developing an arcade game for
THE IDOLM@STER.
The Amusement Business isrecording favorable results, but it
also faces challenges such as
rising fuel prices and labor costs.
Going forward, the business will
pursue both business growth andincreased efficiency.

 NE PIECE CARD GAME (left), DRAGON BALL SUPER CARD GAME FUSIONOWORLD (right)©尾田栄一郎／集英社©尾田栄一郎／集英社・フジテレビ・東映アニメーション©バードスタジオ／集英社・東映アニメーション

Accompanying sale of investment securities,
the net profit forecast will be disclosed after
the sale price is determined.
Would you explain the sale of investment
securities?
Kawaguchi: We decided to sell a portion of theshares of common stock of Toei Animation Co.,
Ltd., that we own, as one of the selling shareholders taking part in a secondary offering ofToei Animation’s common stock. We acknowledge that seeking increased efficiency ofthe assets we hold and improvement in ourfinancial position through reconsideration ofcross-shareholdings based on the Corporate
Governance Code are important management
issues for increasing our corporate value. Eachyear the Company has been implementing
a sufficient review of cross-shareholdings,
including whether or not to continue to holdthem, from a medium-to long-term perspective,
taking into consideration the importance ofthe cross-shareholdings and economic rationale, and has been making efforts to reduceand liquidate cross-shareholdings. Amid theseefforts, we received a proposal to sell the sharesof Toei Animation that we own, and we decided
to take part as a selling shareholder.
We plan to record the extraordinary income
accompanying the stock sale in the fourthquarter. However, at this point, the sale priceis undetermined, and accordingly we have notyet determined the full-year profit forecast. We
will promptly disclose this information when
the sale price is determined. Toei Animation
has been a valued business partner of theBandai Namco Group for more than 50 years.
Today, Bandai Namco and Toei Animation
continue working together to create buzz abouta variety of IP, and going forward the two companies will continue to maintain a strong
relationship as valued business partners.

Sharesto be soldSale price

Do you have a message for stakeholders?
Kawaguchi: For the Bandai Namco Group,
the next year will be the final year of the Midterm Plan. The operating environment in theentertainment industry reflects simultaneous
worldwide growth in the popularity of IP, andwe believe these favorable conditions willcontinue. We would like to link these conditions to a good start for our business activities
in the next fiscal year and also to the next Midterm Plan.
The motivating force and number one sourceof enjoyment for Bandai Namco employees iswhen they see how our products and services
help fans to find joy and inspiration. Going forward, we will focus on our fans and identify theirneeds. We will work to create a world of smiles
and happiness together with fans.

Common stock of Toei Animation Co., Ltd.: 3,113,300 shares(as one of the selling shareholders taking part in a secondary offering of common
stock to be conducted by Toei Animation)* Accompanying the secondary offering, in light of domestic demand and other conditions,a Japanese lead manager of the secondary offering may sell in Japan an over-allotment of amaximum 583,900 shares of common stock of Toei Animation it will borrow from Bandai
Namco Holdings.

Undetermined(Scheduled to be determined on a date between February 27, 2024, and March4, 2024.)

In the fourth quarter of FY2024.3, we plan to record extraordinary income(gain on sale of investment securities) accompanying the secondary offering.
*The latest information regarding shareholder return is available on the Company’s website

March 2024 No.75

3

(Information in this section is as of the end of 14th February 2024.)

Management

Interview with the President
Consolidated Financial Results in First Nine Months of FY2024. 3
Net Sales

Operating Profit(million yen)

Recurring Profit

Profit Attributable toOwners of Parent onsolidated Financial Results by Segment
Cin First Nine Months of FY2024. 3 (million yen)
Business Segment

Net Sales

Segment ProfitResults

772,035

78,282

89,63060,398

Digital

263,012

1,615

Year-on-year changes

103.9%

73.7%

76.6%

71.5%

Toys and Hobby

390,21269,717

IP Production

55,585

6,801

Amusement

88,3107,560

Other24,571

1,268

Elimination andCorporate(49,657)(8,681)

Consolidated
Total

772,035

78,282Full-year Consolidated Forecast for FY2024.3
Net Sales(million yen)

Operating Profit

Recurring Profit

Revised projections*

1,000,000

82,00093,000Results in previous year

990,089

116,472

128,006(as of February 2024)(April 2022 to March 2023)

Profit Attributable toOwners of Parent

90,345* Forward-looking statements are based on a variety of assumptions and are not promises or guarantees that the statedfuture forecasts/measures will be realized.

Directors at principal companies
in the Bandai Namco Group

Change in position(as of April 1, 2024)

Bandai Namco Holdings Inc.

Bandai Namco Entertainment Inc.

Bandai Namco Filmworks Inc.

* Following the General Meeting of Shareholders scheduled
for June 2024

President and CEO

Nao Udagawa

President and CEO

Makoto Asanuma

Director

Daisuke Uchiyama

Satoshi Kono

Director

Toru Konno

Vice President andDirector
Managing Director

Shin Sasaki

Director

Kazunori Goka

Director

Naoya Masaki

Director

Kimikazu Ueyama

Director (Part-time)

Yoshitaka Tao

Director (Part-time)

Yuji Asako

President andRepresentative Director

Masaru Kawaguchi

DirectorYuji Asako

DirectorDirector

Akira Togashi

Nobuhiko Momoi

Director

Director (Part-time)

Masayuki Ishii

Nao Udagawa

Director (Part-time)

Director (Part-time)

Koji Fujiwara

Kazuhiro Takenaka

Director (Part-time)

Makoto Asanuma

Director (Part-time)

Hiroshi Kawasaki

Director (Part-time)

Shuji Ohtsu

Director (Part-time, Outside)

Toshio Shimada

Director (Part-time, Outside)

Koichi Kawana

Director (Audit and Supervisory
Committee Member)

Takashi Kaneko ☆

President and CEO

Kazuhiro Takenaka

Managing Director

Taro Tsuji

Toru Shinoda

Director

Shinjiro Kaji

Director

Akira Togashi

Director

Keisuke Furusawa

Director

Noriko Fujita

Director (Part-time)

Daiki Miyatani

Director (Part-time)

Nobuhiko Momoi

Director (Audit and Supervisory
Committee Member, Outside)

Director (Audit and Supervisory

Committee Member, Part-time, Outside)

Satoko Kuwabara

Director (Audit and Supervisory
Committee Member, Part-time, Outside)

Takayuki Komiya

Takashi Kaneko

4☆ New appointment

Director (Audit and Supervisory
Committee Member)(planned)
Bandai Namco Holdings. Inc.

BANDAI NAMCO NEWS

Director (Part-time)
Director (Part-time)

BANDAI CO., LTD.

Director (Part-time)

Kai Tanaka ☆

Keisuke Furusawa
Yoshiyasu Horiuchi

Bandai Namco Music Live Inc.
President and CEO

Yoshitaka Tao

Managing Director

Takaaki Suzuki

Director

Manabu Kuroda

Director

Atsushi Arai

Director (Part-time)

Kimikazu Ueyama

Director (Part-time)

Kai Tanaka

BANDAI SPIRITS CO., LTD.

Bandai Namco Amusement Inc.

President and CEO

Hiroshi Sakakibara

President and CEO

Hiroshi Kawasaki

Director

Takahiro Mizuno

Managing Director

Haruo Iwayaguchi

Director

Keisuke Furusawa

Director

Yoshiyasu Horiuchi

Director

Noriko Fujita

Director

Hiroshi Ikeda

Director (Part-time)

Kotaro HamaDirector (Part-time)

Director (Part-time)

Kazuhiro Takenaka

Director (Part-time)

Masayoshi Iiyama ☆
Takahiro Mizuno