NEWSLETTER

March 2020
BANDAI NAMCO Holdings Inc.

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

Interview with the President

The future of BANDAI NAMCO lies
beyond change.
BANDAI NAMCO Holdings has announced its results for the first nine months of
FY2020.3 (April to December, 2019) in February. In this issue of the newsletter,
BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the results for
the Group and the trends in each business.
Would you provide an overview of
the results for the first nine months
of FY2020.3?
Taguchi: For the nine-month period, we
achieved net sales of ¥532.5 billion and operating profit of ¥72.0 billion. This marks theachievement of record high sales and profits
for the first nine months of a fiscal year.
In the Toys and Hobby business, we hadfavorable results worldwide with products forthe mature fan base, such as Gundam plastic
models and DRAGON BALL figures. Overseas,products for the mature fan base were popular,
including not only Asia but also North America,
where we have established sales and marketingcompanies. In products for younger customers,
established-IP* toys and toy-related items,
such as KAMEN RIDER and Super Sentai,
were popular in Japan. As a result, the Toysand Hobby business achieved record high resultsin the first nine months of the fiscal year.
The Network Entertainment business registered stable results with mainstay network
content titles, including DRAGON BALL, ONE
PIECE, and THE IDOLM@STER, as a resultof events, updates, and other initiatives. In
addition, we are also seeing progress withnew titles, such as GUNDAM BREAKER
MOBILE and Sword Art Online: Alicization
Braiding, which were introduced in FY2020.3.
In home video games, repeat sales of existing
titles were up year on year on a unit sales

basis. Currently, DRAGON BALL Z KAKAROT,
which was launched in January, has been highly
evaluated by fans and shipments surpassed
1.5 million units in the first week of sales. We
are aiming for shipments of 2.0 million units
within FY2020.3. Moving forward, we willcontinue to focus on high-quality development
in network content and home video games.
Would you discuss the situation in
the Real Entertainment, Visualand Music Production, and IP C
­ reationbusinesses in the third quarter?
Taguchi: In Real Entertainment, existing amusement facilities in Japan recorded favorable
sales. Furthermore, we advanced the roll-outsof new-format facilities that leverage the distinctive strengths of BANDAI NAMCO, suchas opening new TONDEMI athletic facilities.
In amusement machines, sales were downfrom the same period of the previous fiscal
year, when we launched major titles and introduced new versions of existing games.
The Visual and Music Production businessworked to create buzz through IP production
initiatives extending to visual, music and live
events. These initiatives included sales of visualand music packaged products and live events
for THE IDOLM@STER, Love Live! Sunshine!!,and IDOLiSH7 as well as the release of a new
GIRLS und PANZER movie. Profits were influenced by a product mix that was different from

Mitsuaki Taguchi
President & Representative Director,
BANDAI NAMCO Holdings Inc.
the mix in the same period of the previous year,
when we launched multiple, high-value-added
packaged titles. Currently, we are moving ahead
with the planning of multiple IPs from new
viewpoints, and accordingly we would likeeveryone to look forward with anticipation.
In the IP Creation business, we worked tocreate IP-related buzz around the world. To
that end, we took steps to build excitement ina variety of ways, including visual products
for the Mobile Suit Gundam series, whichreached its 40th anniversary. These products
were released in theaters and on TV. The resultsin the licensing business were down in comparison with the same period of the previous
year, when favorable results were recorded.
However, influence on profits was limited due
to a change in the transaction configuration.
Looking at the Love Live! series, which is oneof a mainstay IPs, we have decided to produce
new animations and to roll out new projects.
In these ways, we will work to create further
excitement about this IP.

* IP: Characters and other intellectual property

In regard to the recent spread of the novel coronavirus, we would like to express our sympathy for those who have contracted this illness or have had their lives
affected by this crisis. In consideration of these circumstances, the BANDAI NAMCO Group is doing everything it can in such areas as business operations andemployee work systems. Please note that this newsletter includes information as of the end of February 2020. Thank you for your understanding. We would liketo offer our prayers for the early recovery of those who have contracted this illness and for the end of this crisis.

March 20201

(Information in this section is as of the end of February 2020.)

Interview with the President

Striving to create a world in which fans aroundthe world transcend borders to create­connections through IP
The full-year forecasts for FY2020.3
have been revised.
Taguchi: We reevaluated the full-year forecasts
for FY2020.3, with consideration for our resultsin the first nine months of the fiscal year, ourmarketing plans for products and services in
the fourth quarter, and a variety of initiatives
that we will implement, including investment
for business development, in FY2021.3 andthereafter. Consequently, we did not change
the forecast for net sales of ¥720.0 billion,
but the forecast for operating profit wasrevised from ¥70.0 billion to ¥75.0 billion.
In the fourth quarter, we expect results to
be down year on year. The major reasons
include the following. In the Toys and Hobby
business, we are planning e-commerce site
promotions in global markets as we move tostrengthen roll-outs of products for the mature
fan base around the world, and we are alsoplanning initiatives for the 40th anniversaryof Gundam plastic models. Moreover, in consideration of market conditions in the year-end/
New Year’s sales period, we are taking a cautious approach to future forecasts. In a typicalfiscal year, the fourth quarter is a period inwhich we record upfront costs related to thelaunch of core IP in preparation for the following fiscal year. In the fourth quarter of thecurrent fiscal year, we will start the roll-out
of Healin’ Good ♥ PRETTY CURE! and Mashin
Sentai Kiramager products, and from April
we will roll out Digimon Adventure: products.
We will do our utmost to successfully launchthese IPs as we move toward FY2021.3.
In network entertainment, in the fourth
quarter we will continue to approach customers
worldwide through such initiatives as eventsfor existing core titles in network content.
Furthermore, we will strengthen new titles
and work to maintain a stable business scale.
In the network content business, worldwide,
we plan to launch eight more new titles in t
he fourth quarter than in the same period of
the previous year. Accordingly, the burdenof development expenses and other initialexpenses is expected to increase. In home
video games, the new titles DRAGON BALLZ KAKAROT and ONE PIECE Pirate Warriors

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BANDAI NAMCO NEWS

4 will be launched in the fourth quarter. ONE
PIECE Pirate ­Warriors 4 is scheduled forlaunch in late March, and accordingly the costs
will be recorded upfront in FY2020.3. Also,
due to the title mix and characteristics in the
fourth quarter, we expect repeat-title unit sales
and the download sales ratio to decline year
on year. FY2020.3 was a period immediately
preceding the launch of home video game
titles. In FY2021.3 we plan to launch THE
IDOLM@STER STARLIT SEASON, SWORDART ONLINE Alicization Lycoris, Mobile
Suit Gundam: Extreme Vs. Maxi Boost On,
and other titles. Moreover, although the launchdate has yet to be determined, we are moving
forward with the development of ELDEN
RING, which is highly anticipated by fans.
Would you discuss dividends
for FY2020.3?
Taguchi: The basic dividend policy of BANDAI
NAMCO Holdings is to provide a return toshareholders that targets a total return ratioof 50% or more based on stable dividend
payments of 2% of DOE (dividends on equity),
while maintaining a stable level of dividends
over the long term and focusing on the costof capital. In accordance with this basic policy,
we revised our FY2020.3 forecast for annual
dividends to ¥123 per share, including thestable dividend portion of ¥40 and a resultslinked dividend of ¥83. An interim dividendof ¥20 per share has already been paid, andaccordingly the year-end dividend forecast is¥103 per share.

The Group is stepping up ­Gundamrelated activities.
Taguchi: Mobile Suit Gundam reached its 40th
anniversary in 2019, and 2020 will mark the40th anniversary of Gundam plastic models.
Accordingly, we will continue to create buzz
about this IP in a variety of ways. For the 40th
anniversary of Gundam plastic models, wewill implement cooperative initiatives withother companies, such as our collaborative
products with J.LEAGUE, and launch strategic
products. Furthermore, to prepare for future
growth in demand, we will also take steps in
the area of production, such as expanding ourmanufacturing base in Shizuoka City in Japan.
Currently, Gundam enjoys a high level of
popularity in Asia, including Japan. Moving
forward, we will strive to develop this IP into
“the world’s Gundam.” In particular, to increaseawareness overseas, we will step up events,
strengthen product and promotion roll-outs,
and implement a variety of other initiatives.
In 2020, we will set up a life-size moving
Gundam Statue in Yokohama, and Gundam
will serve as ambassador of the Japan Pavilion
at Expo 2020 Dubai. Moreover, the “G-SATELLITE into Space” initiative, which is a
project led by JAXA, will involve the launchof Gundam plastic models into space. In 2020,
Japan and Japanese culture will be the focus
of attention from around the world. We will
work to create buzz, identify expectations,and link these trends to the live-action filmthat is currently being produced jointly with
Hollywood. Moving forward, we will strive
to create a world in which fans around theglobe transcend borders to create connections
through the Gundam IP.

◀Gundam speciallydesigned for the   Japan Pavilion at
Expo 2020 Dubai©創通・サンライズ▲ Home video game ONE PIECE Pirate Warriors 4©尾田栄一郎／集英社・フジテレビ・東映アニメーション©BANDAI NAMCO Entertainment Inc.

The Group has announced personnel
changes at the director level.
Taguchi: On April 1, Masaru Kawaguchi, thepresident of BANDAI CO., LTD., will become
Executive Vice President and Director of
BANDAI NAMCO Holdings Inc. The objectiveof this move is to deepen collaboration between
management and business execution and tofurther solidify our management foundation.
Moving forward, the Group will strive to work
together and leverage our comprehensive
strengths under the ALL BANDAI NAMCO
concept. To that end, it will be necessary forGroup companies to work in a more-unified
manner, to collaborate, and to foster chemicalchange. In these endeavors, businesses involving tangible goods will be one of our core
operational areas. Mr. Kawaguchi, while concurrently working as the president of BANDAI
CO., LTD., will serve as the vice president of
BANDAI NAMCO Holdings Inc., and strive
to advance integration and collaboration fromthe optimal viewpoint.

What are the Group’s goals
for FY2021.3?
Taguchi: The changes generated directly andindirectly by digitalization are altering thestructure of our industry and our markets. In
response, we have selected CHANGE as thetheme of our Mid-term Plan. This choice wasbased on belief that that the Group will haveno future if we simply continue to follow ourprevious ways of doing things. The speed ofchange in the current age means that we cannot
afford to stand still. If we move too slowly,
or simply take a passive approach, then it ispossible that the value that we have created
up to this point will be entirely lost. In the
midst of this change, we must accurately
understand how customers feel about our
products and services and carefully determine
our next steps.
On the front lines, near our customers, wemust strive to accurately understand customer
trends and thinking. This will continue to beimportant for BANDAI NAMCO. And inproviding products and services, we must

address customer needs and endeavor to pursue
the true nature of those needs. The continued
existence of the BANDAI NAMCO Group
rests on our ability to provide products andservices that are irreplaceable, for IP and forcustomers. I believe that the future of BANDAI
NAMCO lies beyond change. Moving forward,
we will strive to be a Group that responds
flexibly to the emerging trends of the times
and continues to CHANGE.

Directors at Major Companies in the BANDAI NAMCO Group (as of April 1, 2020)
BANDAI NAMCO Holdings Inc.

BANDAI NAMCO Entertainment Inc.

BANDAI NAMCO Arts Inc.

President and Representative Director

Mitsuaki Taguchi

President and Representative Director

Yasuo Miyakawa

President and Representative Director

Kazumi Kawashiro

Executive Vice President
and Director

Masaru Kawaguchi *Managing Director

Nao Udagawa

Shunji Inoue

Managing Director

Naoki Katashima *Vice President and Representative Director
Executive Director

Satoshi Kono *Director

Hideyuki Kurita

Director

Yuka Sakurai

Director

Kenji Hamada

Director
Director

Shuji Ohtsu
Yuji Asako

Director (Part-time)

Yasuo Miyakawa

Director (Part-time)

Hitoshi Hagiwara

Director (Part-time)

Kazumi Kawashiro

Director (Part-time)

Makoto Asanuma

Director (Outside)

Yuzuru Matsuda

Director (Outside)

Satoko Kuwabara

Director (Outside)

Mikiharu Noma

Director (Outside)

Koichi Kawana

Director

Toru Konno

Director

Hiroshi Kawasaki

Director

Masahiro Shimizu

Director (Part-time)

Daisuke Uchiyama *Director (Part-time)

Masaru Kawaguchi

Director

Kimikazu Ueyama

Director (Part-time)

Kiyoko Matsumura

BANDAI NAMCO Amusement Inc.

Director (Part-time)

Takaaki Suzuki

President and Representative Director

Hitoshi Hagiwara

Director (Part-time)

Makoto Asanuma

Executive Vice President

Kazuya Kiyoshima

SUNRISE INC.

Managing Director

Seiji Kagawa *BANDAI CO., LTD.

Director

Haruo Iwayaguchi

President and Representative Director

Director

Yoshiyasu Horiuchi

Director (Part-time)

Takahiro Mizuno

Masaru Kawaguchi

President and Representative Director

Makoto Asanuma

Managing Director

Shin Sasaki

Director

Naoya Masaki

Akihiro Sato

Director (Part-time)

Masayuki Ozaki

Director

Nobuhiko Momoi

Director (Part-time)

Kazuhiro Takenaka

Director

Shinjirou Kaji

Director (Part-time)

Hirofumi Inagaki

Director

Akira Togashi

Director (Part-time)

Yoshiyasu Horiuchi

Director (Part-time)Taro Tsuji

Director (Part-time)

Satoshi Kono

Director (Part-time)

Yasuo Miyakawa

Director

Newly appointed* Change in position
March 20203

(Information in this section is as of the end of February 2020.)

Closeupas an opportunity and to provide customers
around the world with products that leverage
our strengths.

Providing high-quality products around theworld while accelerating collaboration insideand outside the GroupThe IP Creation Unit handles a range of visual production activities, including­planning and production of animations as well as the management and use of
copyrights and other rights. In accordance with its Mid-term Vision—Evolvingfrom Animation Production Company to IP Development—the Unit is aggressively taking on the challenges of further reinforcing the strengths of its existing
IP, while at the same time strengthening its ability to create IP without beingbound by animation frameworks, as well as bolstering its ability to communicate
the appeal of IP in markets around the world. In this section, Makoto Asanuma,
the president of SUNRISE, which is the core company of the IP Creation Unit, discusses the Unit’s market environment, focus titles, and vision for the future.
It has been a year since you
became president of SUNRISE.
Asanuma: I have been a member of the management team at SUNRISE INC., serving from
April 2018 as Senior Managing Director andfrom April 2019 as President and Representative
Director. Before I moved to SUNRISE, I worked
with products and services utilizing IP in the
Network Entertainment Unit, principally games,
etc. In the Network Entertainment Unit, thecreation of new IP, such as IP from games, wasan important initiative. The mission of the IP
Creation Unit incorporates not only creating
IP but also aiming to maximize IP value by
working in close cooperation with other Units.
Furthermore, production studios play a central
role in our organization, which makes us aunique Unit within the Group. As the presidentof the IP Creation Unit’s core company, I havea strong sense of the importance of my duties
and a great feeling of satisfaction about working
in the creative business of visual production.

Would you discuss the operating
environment in the IP Creation Unit?
Asanuma: Japanese animation has always
been highly evaluated on the global stage
for its quality and quantity. Through the global
advances of online video distribution services,such as over the Internet, Japanese animations
can be enjoyed around the world. We now
have an environment that makes it possible
to further increase the creation of global hits.
Furthermore, in many countries CG animation is the mainstream rather than
hand-drawn animation, and in this environment the quality of hand-drawn Japanese
animation has become a strength. SUNRISE
has established a production department
specializing in CG, and accordingly we candetermine how to produce more-appealing
animations by combining the quality ofhand-drawing with CG technologies. In thisway, we can strengthen our operations. Goingforward, we will strive to approach change▲ A new Love Live! series will be produced.

◀ We are planning to exhibit a life-size moving Gundam in
Yokohama in October 2020.

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BANDAI NAMCO NEWS

What is the secret to creating
high-quality products?
Asanuma: It is important to rapidly create large
numbers of products while maintaining highlevels of quality. Judgments about the qualityof a visual product can only be made whenusers watch the completed product on a screen.
If you are just thinking about a plan, you will
not obtain evaluations from users, and accordingly it is essential to move rapidly in thecreation of a visual product. However, visual
production involves creating 1 from 0, that is,creating something from nothing, and thisprocess entails significant struggles. To overcome those difficulties, it is important to believe
in your own product plan and to have thestrength to charge ahead. To cultivate that typeof attitude, we are holding regular lecture
meetings with experts from inside and outside
the company, such as the company’s highly
experienced producers and officers from other
Units. We are also implementing initiatives
to support employee motivation.
Moreover, the promotion of collaboration
within the Group, in ways that transcend Unit
boundaries, is also a positive factor in thecreation of visual products. Personnel exchanges
within the Group are being actively promoted.
For example, I became president of SUNRISE
after working as a director at BANDAI NAMCOEntertainment Inc. Under the IP axis strategy,
the drive to create new IP has permeatedthroughout the Group. These factors are having
a major influence. The BANDAI NAMCO▲ Sunrise Drawing Academy

Group has leveraged its distinctive strengths
to establish a cycle under which we work
together to create IP, leverage our comprehensive strengths to make that IP a hit, andthen use the resulting profits to invest in thecreation of the next IP. Going forward, I think
we should strive to accelerate that cycle.
Progress is also being made with theestablishment of a business­foundation and collaboration outside
the Group.
Asanuma: We have received the transfer ofthe visual production business from XEBEC
and established SUNRISE BEYOND. We havealso invested in Sublimation Inc., a CG production company, and echoes Inc., which

operates one of Japan’s largest platforms
exclusively for contributions of original manga.
The production of animations involves a large
number of processes, and it is difficult for one
company to handle all of them. Accordingly,
I think that it is important to strengthen our
foundation for the creation of visual products
through these types of measures. In addition,
there is a growing labor shortage in animation.
In this environment, we have established theSunrise Drawing Academy, and we are offering
grants to support students. In these ways, we
are working to support the development ofanimators. By providing opportunities foryounger generations to acquire skills, we will
strive to activate the animation industry.

Working to future bolster Gundam, Love Live!,and other popular IP and to promote thecreation of new IP
Gundam marked its 40th ­anniversary
in 2019.
Asanuma: We rolled out a variety of initiatives
for the Mobile Suit Gundam 40th Anniversary
Project, centered on five visual products. We
have strengthened overseas roll-outs, and in
July Mobile Suit Gundam: Narrative became
the first Gundam series product to be releasedin theaters in China. We have also opened an
official YouTube channel, the “Gundam Channel,” which we are using to provide information
about Gundam to fans around the world.
In 2020, we plan to hold the theater openingof Mobile Suit Gundam Hathaway, the latest
visual product in the Gundam series, on July23, and in October we plan to hold the public
opening of a life-size moving Gundam in
Yokohama. Moreover, at the Expo 2020 Dubai,
which will open in October, Gundam will serveas the PR ambassador for the Japan Pavilion.
Through this bold initiative, we will strive tohelp Gundam make a leap to the status of
global IP.
Love Live! reached its 9th anniversary.
Asanuma: The theme of this IP is the activities
of nine girls, so from the beginning we haveconsidered the ninth anniversary to be a turning

point. In addition to live events, such as Love
Live! Fest, which brings together the school
idols who appear in the series, we also rolled
out a variety of anniversary-related initiatives,
such as goods, visual products, music, etc.
We recently decided to produce a new seriesof TV animations, and accordingly wewill strive to create even more buzz as wemove forward.
What products will the Unit focus on?
Asanuma: In the Aikatsu! series, which is theGroup’s original IP, the latest product is Aikatsu
on Parade!, which has been popular sincebroadcasts started in October 2019. April 2020
will mark the start of “Wave, Listen to me!,”a TV animation based on a manga featuringa Hokkaido radio station created in collaboration with the monthly magazine Afternoon.
We are also preparing products for global
markets, such as a live-action Gundam filmin joint production with Hollywood, andCowboy Bebop, a live-action TV series thatwill be distributed on Netflix in the U.S. In
addition, we are also actively working withthe planning of visual products for new IP. So
there is a lot to look forward to.

Makoto Asanuma
President and Representative Director,
SUNRISE INC.

What are your policies toward work?
Asanuma: A company comprises the employees

working on the front lines. Of course, it also
involves working in accordance with instructions from senior management, but ultimately
what is important is employees doing theirjobs with motivation and loyalty. There is adifference in the quality of work when you
do something because you were told to or you
do something on your own initiative. The roleof senior management is to establish an environment that enables employees to turn ingood performances. I believe that is the best
way to improve a company. Going forward,
I will strive to establish a distinctive IP Creation
Unit style of management that enables employees to tackle their work in a spirit of autonomy
and independence.

©創通・サンライズ

March 20205