NEWSLETTER No.68 2022 June

Bandai Namco miraikenkyusho
5-37-8, Shiba, Minato-ku, Tokyo, 108-0014, Japan

Management

Interview with the President

Masaru Kawaguchi
President and Representative Director
Bandai Namco Holdings Inc.

Achievement of record-high results in FY2022.3
Aiming for further evolution under theMid-term Plan
Bandai Namco Holdings Inc. has announced its consolidated results for FY2022.3.
In this issue of the newsletter, Bandai Namco Holdings’ President Masaru Kawaguchi
discusses a number of topics, including the strategies in the Mid-term Plan, whichstarted in April 2022.
The Group has a new corporate logo.
Kawaguchi: In April 2022, we introduced thePurpose, which is the ultimate definition of who
we are as a Group, and a new corporate logo,
which expresses the thoughts that have been
incorporated into the purpose. The new logo
will be displayed on all Group products andservices, and we also refreshed the designs ofour public websites, business cards, etc.
We have also started branding activities
that reflect an awareness of fans around theworld, such as utilizing brand videos and signing a sponsorship agreement with a Major
League Baseball team. We are starting to seea change in the awareness of employees inline with the idea that “Bandai Namco hasentered a new phase.”
The results For FY2022.3 have beenannounced.
Kawaguchi: Looking at our results in FY2022.3,
net sales were ¥889.2 billion, operating profit
was ¥125.4 billion, recurring profit was ¥133.6
billion, and profit attributable to owners ofparent was ¥92.7 billion. We achieved record
highs for sales and profits. In FY2022.3, we wereable to focus on the medium to long term
future and carefully formulate the Mid-term
Plan because we delayed the start of the Midterm Plan by one year. Another factor
contributing to our results was aggressive
action on the front lines of each business as
everyone worked to advance their businessin the right direction.
Looking at the full-year results, we surpassed the full-year forecasts that weannounced in February when we presented
the third-quarter results. A major factor in thisachievement was ELDEN RING, a home video

game that was launched on February 25. By
the end of the fiscal year, shipments had
reached 13.4 million units, in comparison withthe forecast of 4 million units. Other businesses
also continued to record favorable results withpopular products, services, etc.
Please review the circumstances for eachbusiness in FY2022.3.
Kawaguchi: In addition to the Group as awhole, the Digital business and the Toys andHobby business also achieved record-highresults. In the Digital business, favorable
results were recorded by new home video
game titles, such as ELDEN RING, whichbecame a major hit. In addition, sales of repeat
titles were solid throughout the year. In theToys and Hobby business, favorable results
were registered by products for the mature
fan base, core IP products, toy-related products,and others. In particular, the Toys and Hobby
business received a strong response to its
overseas business development initiatives.
The Visual and Music business and theAmusement business, which were significantly
affected by the spread of COVID-19 in FY2021.3,
achieved recoveries in their results due not
only to the market recovery but also to theirfront-line initiatives to address changes in thebusiness environment. In the Creation business, we worked with new visual products,
such as the Gundam series, and licensing
revenues increased.
Would you discuss dividends?
Kawaguchi: Our basic policy is to provide areturn to shareholders that targets a total
return ratio of 50% or more based on stabledividend payments of 2% of DOE (dividendson equity). In accordance with this policy,
we are planning to pay an annual per-share
dividend, including interim dividends, of¥212 per share (total return ratio of 50.2%),
including a base dividend of ¥48 per shareand a performance-based dividend of ¥164
per share.
Please discuss the Group’s results inFY2023.3.
Kawaguchi: We are planning for net sales of¥880.0 billion and operating profit of ¥100.0billion. ELDEN RING, which became a major
hit, was a special factor in FY2022.3. Nonetheless, we will take on the challenge ofmaintaining a high level of results in eachbusiness in FY2023.3. Our results are influenced by the lineups of products and services
and by whether or not we have hit products,
but I would like to focus on operating profitof ¥100.0 billion going forward.
In the Digital business, ELDEN RING was amajor hit in FY2022.3, and we are consideringa variety of initiatives to be implemented overthe medium to long term in order to develop
ELDEN RING into a long-selling product. In
home video games and network content, wewill work to build existing titles into long-selling
products, and we will provide fans with the newtitles that we are planning for the future.

(Continued on next page)2022 June No.68

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(Information in this section is as of the end of May 2022.)

ManagementInterview with the President

Under the new Mid-term Plan, we willadvance a variety of initiatives focusing on
deep, broad, and multifaceted connections
with fans
In the Toys and Hobby business, we will work
to maintain our high share in Japanesemarket. In addition, we will aim to expand
business in global markets to foster growthover the medium to long term. In this way, wewill strive to achieve a new record-high performance. We will also take steps to address
rising raw material prices and freight rates. Ininland China, business is currently affectedby the suspension of production and theclosure of stores due to the lockdown. Nonetheless, inland China will continue to be a key
market going forward.
In the IP*1 Production business, which wascreated through the integration of the Visualand Music business and the Creation business,
we are carefully monitoring the market environment for live-event-related operations. We
are planning to produce multiple new visual
products, and we are expecting an increasein accompanying licensing revenues etc. Goingforward, we will continue focusing on thecreation of IP, which is an important elementin the IP axis strategy.
In the Amusement business, the market
environment remains uncertain. However,
we will provide amusement facilities andamusement machines that leverage Bandai
Namco’s distinctive strengths. Looking atprofits, we expect to see increases in fixed
costs, such as rent.

we will launch communities for each category,such as anime, Gundam plastic models,games, and music. These will be linked with
the Bandai Namco ID, which will be an accountshared throughout the Group. Already, inMarch we launched Gundam Navi, a navigation
app that brings together Gundam information.
For the Gundam plastic model colony, which
will launch this year, we are preparing content
that leverages Bandai Namco’s distinctive
strengths in both digital and physical elements, such as battles in which models arescanned and then fight. We plan to launch ane-sports colony in 2023. We envision a community that enables fans around the world toparticipate in games, such as Gundam Evolution, an FPS*2 game that is currently indevelopment. In addition to these colonies,
in the future we are thinking of providing
venues that will enable companies outside
the Group as well as fans to roll out businesses
utilizing Gundam.
For the Bandai Namco metaverse activities,
we are not thinking of something that limits
fans only to the Bandai Namco Group. We will
aim to maximize IP value by connecting withfans and partners around the world in an open
and multifaceted manner while also broadening the possibilities of IP. The operating
environment is changing at a rapid pace, andgoing forward we will strive to address changes
in technologies and fan preferences.

The Mid-term Plan has been launched.
Would you describe the plan’s mainstrategies?
Kawaguchi: After the announcement of theMid-term Plan, I think that people have highexpectations for the “IP Metaverse” in termsof fostering deeper, broader, and more multifaceted connections with fans under the IP
axis strategy. Our approach to the metaverse
will involve rolling out initiatives for each IP
in order to stay close to fans. All regions andbusinesses are involved with Gundam, andthe first step is the Gundam Metaverse. This
IP metaverse will not entail the creation of alarge space that is complete from the beginning. Rather, in virtual spaces (space colonies),
Gundam Metaverse*1 IP: Intellectual property, such as characters

2BANDAI NAMCO NEWS

Please discuss the global roll-out of theIP axis strategy.
Kawaguchi: In preparation for the current
Mid-term Plan, we integrated business companies and consolidated bases in regions
around the world. In this way, we prepared asystem that can advance our strategies underthe ALL BANDAI NAMCO concept. People will
be in the same office, which will naturally giverise to information exchange and collaboration. In the future, in addition to globalinitiatives in each business, we will further
deepen collaboration among businesses. We
plan to roll out products and services aroundthe world based on the release of new visualproducts. These include DRAGON BALL, ONE
PIECE, and Gundam. Accordingly, by leveraging
this opportunity and implementing cross-organizational projects, we will roll-out products,services, and marketing initiatives in collaboration with the visual products. We will havea Group booth at Anime Expo, which will beheld in the United States in July. Through thisbooth, we will strongly highlight to local fansthe products and services for IP that we arerolling out on a worldwide basis. In addition,in regard to collaboration, we will advanceinitiatives to maximize IP value. For example,the Toys and Hobby business will develop
products based on ELDEN RING.
Looking at home video games in the Digitalbusiness, in FY2023.3 we plan to launch new
titles, such as DRAGON BALL, ONE PIECE, andGundam. We are preparing multiple worldwide
titles during the period of the Mid-term Plan,
and we will work to make these long-­sellingproducts. We will also focus on launching titles
and IP originating overseas. Furthermore, toincrease title quality, in addition to existing roadcasts of Mobile Suit Gundam: THE WITCH FROMBMERCURY are scheduled to start in October 2022.
©創通・サンライズ ©創通・サンライズ・MBS

review committee, we have also establishedcommittee supported by highly experienced
producers. In this way, we are providing planning advice from technical and business model
perspectives. Leveraging these two frameworks, we will aim to realize a more-precisedevelopment system.
In the Toys and Hobby business, we will
work to expand IP lineups and categories.
Currently, core IP products are Gundam andDRAGON BALL in the Americas and Europe andGundam, Ultraman, and KAMEN RIDER inChina. Going forward, we will work to further
strengthen Digimon, ONE PIECE, etc. For ONE
PIECE, we plan to launch new trading cards
on a worldwide basis. Distribution of Gundam
plastic models is expanding in all regions. To
address demand from fans around the world,
we decided to acquire a site in Shizuoka,

Japan next to the Bandai Hobby Center manufacturing base and to build a new plant there.
We plan to start operations at the new plant in
2024, and until then we will take steps tostrengthen our production system to meet theexpectations of fans, such as adding molding
machines at multiple Group manufacturingbases.
As the source of IP, the IP Production business will produce visual products with a focus
on global markets from the planning stage,
implement worldwide distribution, andstrengthen the licensing business. In theAmusement business, while maintaining a
focus on local needs, we will conduct global
development of business formats that areregistering strong results in Japan.

Aiming for growth by addressing all stakeholders
and society and realizing our Purpose
What is the situation in IP Creation?
Kawaguchi: We implemented reorganization
initiatives within the IP Production Unit, where
the most important mission is IP creation. By
consolidating the know-how that each company has in visual, music, and live events, wewill further reinforce our IP creation and production capabilities. Currently, this Unit hasa system that can create IP from not only 22
in-house visual product studios but also morethan 30 outside studios. In addition, we leverage human resources networks, such ascreators and directors, to form the optimalteam for each product. We draw on different
approaches, such as dedicated in-houseproduct creation and product creation in collaboration with a wide range of external
partners. In this way, we create a diverse rangeof IP. We then coordinate activities with theGroup’s wide range of content outlets, suchas music, live events, games, and toys, andwe license the IP to outside partners. In thisway, through nurturing and production initiatives, we strive to maximize the value of IP.
Under the current Mid-term Plan, we areplanning to create about 40 products a year
based on IP from the IP Production business,
including both new and existing IP. Of these,
we have a special focus on Gundam, for which
we will steadily implement collaboration
within the Group from the planning stage toworldwide roll-outs. In FY2023.3, plans callfor a new film to be released and a new TV
series to be broadcast. In addition, new initiatives will ensure that we continue to create
buzz, such as the live-action film currently injoint production with Legendary and a Gundam-themed booth at Expo 2025 Osaka,
Kansai, Japan. Furthermore, we will strive
to create IP from a variety of perspectives,
including from products and services ofour businesses, collaborative projects, theBandai Namco Content Fund, and overseas
markets.
A sustainability perspective will be incorporated into the evaluation of the officer
compensation plan.
Kawaguchi: With the approval of the shareholders’ meeting scheduled for June as aprecondition, we will revise the director compensation plan with the purposes of promoting
sustainable growth for the Group, improving

corporate value over the medium to long term,and promoting the sharing of value withshareholders.
Looking at the performance-based bonus
portion of variable remuneration for directors,
excluding directors who are Audit and Supervisory Committee members and outside
directors, the sustainability evaluation will beadded to the evaluation of the rates of achievement of mid-term targets, annual targets, andtargets relative to the previous fiscal year
regarding consolidated operating profit. In
accordance with our Purpose, we think that it
will be necessary to address social issues as amember of society and to advance activities
for the realization of a sustainable society
together with our stakeholders. Accordingly,
we have also included sustainability in themain strategies in the Mid-term Plan. By incorporating a sustainability perspective into officer
compensation evaluation, we will strive tofurther strengthen awareness and initiatives.
Finally, do you have a message
for readers?
Kawaguchi: “Connecting and working together
to create things” is an especially importantpart of Bandai Namco’s Purpose. Rather thanfocus inward, Bandai Namco will address allstakeholders and society, including fans andpartners, and work to realize the Purpose. In
this way, we will strive to record growth. We
have received a variety of new proposals frompartners who are in agreement with the concept of “connecting and working together tocreate things.” These proposals and theexpectations of fans motivate and encourage
us as we strive to evolve into a Bandai Namco
Group that is more and more entertaining.
Please look forward to exciting developmentsin the future.

Making donations for humanitarian support in Ukraine
To provide humanitarian support for people in Ukraine and people who have sought refugein neighboring regions, in March 2022 the Bandai Namco Group made a donation of ¥100
million to Save the Children Japan. We hope that the people and communities in Ukraine
will be able to return to peaceful days as soon as possible.

*2 FPS: First-person shooter

2022 June No.683