Consolidated Financial Report for the Second Quarter of
the Fiscal Year Ending March 31, 2021

November 6, 2020

DISCLAIMER- BANDAI NAMCO Holdings Inc. provides this translation for your reference and convenience only and without any
warranty as to its accuracy or otherwise. In the event of any discrepancy, the original “Kessan Tanshin” in Japanese
shall prevail.
- This document contains forward-looking statements that are based on management’s estimates, assumptions andprojections at the time of publication. A number of factors could cause actual results to differ materially fromexpectations.

Stock Listing: Tokyo Stock Exchange
Code Number: 7832
(URL: https://www.bandainamco.co.jp/)
November 6, 2020

Consolidated Financial Report for the Second Quarter of
the Fiscal Year Ending March 31, 2021 (Japanese GAAP)
Representative:
Mitsuaki Taguchi, President and Representative Director
Contact:
Yuji Asako, Director, Division General Manager of the Corporate Planning Division
Scheduled filing date of the quarterly security report:
November 10, 2020
Scheduled starting date for dividend payments:
December 7, 2020
The Financial Highlights of the Financial Results for the Quarter: Yes
The information session of the Financial Results for the Quarter: Yes (for institutional investors and analysts)* Figures are in millions of yen, rounded down
1. Consolidated Results for the Second Quarter of the Fiscal Year Ending March 31, 2021
(April 1, 2020 to September 30, 2020)(1) Consolidated Operating Results (For the Six Months Ended September 30, 2020)

Second Quarter of the Fiscal YearEnding March 31, 2021
Second Quarter of the Fiscal Year
Ended March 31, 2020

Net sales¥ million
337,122%(3.5)

349,327

4.4

Profit attributable toowners of parent¥ million%
31,715(8.4)(Percentages indicate year-on-year changes.)
Operating profit
Recurring profit¥ million%¥ million%
45,930(4.2)
47,193(3.2)
47,941

9.1

Basic earnings per share

48,746

6.4

Diluted earnings per share¥
Second Quarter of the Fiscal Year
144.38Ending March 31, 2021
Second Quarter of the Fiscal Year
34,6071.2
157.45Ended March 31, 2020
(Note) Comprehensive income: 44,190 million yen [46.1%] (FY2021.3 2Q), 30,236 million yen [(22.5)%] (FY2020.3 2Q)(2) Consolidated Financial Position
Total assets
Net assets
Equity ratio¥ million¥ million%
As of September 30, 2020
683,559
470,050
68.6
As of March 31, 2020
619,819454,684
72.5(Reference) Equity: 468,848 million yen (as of September 30, 2020), 449,292 million yen (as of March 31, 2020)¥––

2. Cash Dividends
End offirst quarterEnd ofsecond quarter¥20.00¥21.00

Annual cash dividends
End ofFiscalthird quarteryear-end–¥112.00

Total

Fiscal Year Ended March 31, 2020–¥132.00
Fiscal Year Ending March 31, 2021–
Fiscal Year Ending March 31, 2021–
¥21.00¥42.00(Projections)(Note) Revision to the projections of cash dividends for the Fiscal Year Ending March 31, 2021: No
Concerning the projected amounts of the year-end cash dividends for the fiscal year ending March 31, 2021, the base dividend isstated based on the Company’s basic policy on the distribution of profits. The year-end cash dividend for the fiscal year ending
March 31, 2021, will be considered by the Company based on the basic policy on the distribution of profits.
3. Consolidated Projections for the Fiscal Year Ending March 31, 2021 (April 1, 2020 to March 31, 2021)(Percentages indicate year-on-year changes.)
Net sales
OperatingRecurring
Profit attributable
Basic earnings
profitprofitto owners
per shareof parent¥ million% ¥ million% ¥ million% ¥ million%¥
Full Fiscal Year
650,000(10.2)
50,000(36.5)
50,500(36.7)
33,000(42.8)
150.23(Note) Revision to the projections: No* Notes(1) Changes in Significant Subsidiaries during the Period(Changes in Specified Subsidiaries Resulting in the Change in Scope of Consolidation): No(2) Application of Special Accounting for Preparing the Quarterly Consolidated Financial Statements: Yes(Note) For more details, please refer to the section of “(3) Notes to Consolidated Financial Statements, (Application of Special
Accounting for Preparing the Quarterly Consolidated Financial Statements)” of “2. Consolidated Financial Statements and Significant
Notes” on page 9 of the attached material.
(3) Changes in Accounting Policies, Changes in Accounting Estimation and Restatementa) Changes in accounting policies due to revisions to accounting standards and other regulations: Nob) Changes in accounting policies due to other reasons: Noc) Changes in accounting estimation: Nod) Restatement: No(4) Number of Issued Shares (Common Stock)a) Total number of issued shares at the end of the period (including treasury stock)
222,000,000 shares
As of September 30, 2020
As of March 31, 2020
222,000,000 sharesb) Number of shares of treasury stock at the end of the period
2,327,146 shares
As of September 30, 2020
As of March 31, 2020
2,324,320 sharesc) Average number of shares during the period (cumulative from the beginning of the fiscal year)
219,667,816 shares
For the Second Quarter of the Fiscal Year Ending March 31, 2021
For the Second Quarter of the Fiscal Year Ended March 31, 2020
219,807,530 shares* Quarterly Consolidated Financial Reports are not required to be subjected to quarterly reviews conducted by certified public accountants
or an audit firm.
* Explanation on appropriate use of the projections of business results, etc.
- Forward-Looking Statements:
This document contains forward-looking statements that are based on management’s estimates, assumptions and projections at the timeof publication and those forward-looking statements do not purport to be a promise by the Company to achieve such results. A numberof factors could cause actual results to differ materially from expectations. Please refer to the section of “(3) Explanation Regarding
Consolidated Projections and Other Forward-Looking Statements” of “1. Qualitative Information Regarding Consolidated Results for
the Second Quarter” on page 3 of the attached material for matters pertaining to the earnings projections.
- To Obtain Financial Highlights:
The Financial Highlights will be posted on the Company’s website on November 6, 2020.

Attached Material
Index
1. Qualitative Information Regarding Consolidated Results for the Second Quarter ....................... 2(1) Explanation Regarding Operating Results ......................................................................................................................... 2(2) Explanation Regarding Financial Position ......................................................................................................................... 3(3) Explanation Regarding Consolidated Projections and Other Forward-Looking Statements .............................................. 3

2. Consolidated Financial Statements and Significant Notes ................................................................ 5(1) Consolidated Balance Sheets.............................................................................................................................................. 5(2) Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income ................................... 7(Consolidated Statements of Operations) ........................................................................................................................... 7(Consolidated Statements of Comprehensive Income)....................................................................................................... 8(3) Notes to Consolidated Financial Statements ...................................................................................................................... 9(Notes on Premise of Going Concern) ............................................................................................................................... 9(Notes on Significant Changes in the Amount of Stockholders’ Equity) ........................................................................... 9(Application of Special Accounting for Preparing the Quarterly Consolidated Financial Statements) .............................. 9(Segment Information) ....................................................................................................................................................... 9(Significant Subsequent Events) ...................................................................................................................................... 11-1-

1. Qualitative Information Regarding Consolidated Results for the Second Quarter(1) Explanation Regarding Operating Results
During the second quarter (six months) of the fiscal year ending March 31, 2021, the spread of the novel coronavirus
disease (COVID-19) continued to have a big impact on the overall economy and consumer activity in Japan and overseas.
As part of our response against the spread of COVID-19, the Group has been giving the highest priority to the safety of our
stakeholders, including employees and their families, and customers, while implementing measures to prevent the spread of
infection. We also promoted various measures suited to the changes in lifestyles and preferences of customers bystrengthening the sales and marketing that utilize digital strategies. In accordance with our three-year Mid-term Plan started
in April 2018, in which we set forth the Mid-term Vision of “CHANGE for the NEXT: Empower, Gain Momentum, and
Accelerate Evolution,” we have also been taking advantage of the worldview and unique characteristics of IP (Intellectual
Property: meaning characters and other intellectual property) to further evolve the “IP Axis Strategy” that aims to maximize
IP value through the provision of the optimal products and services at the optimal possible times. The measures also include
an initiative to strengthen development in regions and businesses with high growth potential and an initiative to realize thetotal capabilities of the Group in regions around the world under the ALL BANDAI NAMCO concept.
During the second quarter (six months), although each business was impacted by the spread of COVID-19, the Toys andHobby Business saw increased popularity for products for the mature fan base in Japan and overseas while the Network
Entertainment Business enjoyed favorable performance of key titles in network content and strong repeat sales of home video
game titles.
Consequently, the Group’s consolidated results for the second quarter (six months) were net sales of 337,122 million yen(year-on-year decrease of 3.5%), operating profit of 45,930 million yen (year-on-year decrease of 4.2%), recurring profit of47,193 million yen (year-on-year decrease of 3.2%), and profit attributable to owners of parent of 31,715 million yen (yearon-year decrease of 8.4%).
Operating results by segment are as follows.
Toys and Hobby Business
As for the Toys and Hobby Business, in Japan, products for the mature fan base such as plastic models of the Mobile Suit
Gundam series and collectible figures performed favorably as a result of getting successful outcomes from sales, marketing,etc. that utilize digital strategies. Popularity was also gained for long-established IP products such as the KAMEN RIDER
series, as well as for toys and peripheral products utilizing new IP. However, products offered through amusement facilities
were impacted by the temporary closures of facilities in response to the spread of COVID-19. Overseas, in the Asian region,
products for the mature fan base performed stably while in the Americas and Europe, business was affected by the temporary
closures of retail stores.
As a result, net sales in the Toys and Hobby Business were 128,858 million yen (year-on-year increase of 0.6%), andsegment profit was 18,809 million yen (year-on-year increase of 6.7%).
Network Entertainment Business
As for the Network Entertainment Business, in network content, key titles being distributed worldwide such as the
DRAGON BALL series and ONE PIECE, and key titles in Japan such as The iDOLM@STER series, continued to perform
favorably due to ongoing measures targeting users. In home video games, in addition to the good start of the new title
CAPTAIN TSUBASA: RISE OF NEW CHAMPIONS, repeat sales of existing titles such as the DRAGON BALL series,
TEKKEN 7, and the DARK SOULS series, enjoyed popularity, primarily overseas, due to ongoing measures targeting users
and increased demand for digital sales.
As a result, net sales in the Network Entertainment Business were 170,273 million yen (year-on-year increase of 11.3%),
and segment profit was 34,726 million yen (year-on-year increase of 39.1%).
Real Entertainment Business
As for the Real Entertainment Business, the temporary closures of amusement facilities in Japan and overseas in responseto the spread of COVID-19 had a big impact on facilities operations and the sale of arcade games. In response to thesechanges in the business environment, we promoted initiatives, such as offering claw crane games that can be played online
and strengthening the use of Group products and services in facilities, that only BANDAI NAMCO can offer. Fixed costs
incurred during the temporary closures of facilities etc. in response to the official requests from the national and local
governments have been recognized under extraordinary loss as “loss on temporary store closures and other related to COVID19.”-2-

As a result, net sales in the Real Entertainment Business were 24,320 million yen (year-on-year decrease of 48.0%), andsegment loss was 8,022 million yen (segment profit for the same period of the previous fiscal year was 1,526 million yen).
Visual and Music Production Business
As for the Visual and Music Production Business, although IP related visual and music package software, among others,
including the LoveLive! series and The iDOLM@STER series, continued to be sold, live events were canceled due to the
spread of COVID-19, and releases of visual and music products and the launch of their package software titles were
postponed due to delays in production schedules, among other reasons, which impacted business performance. In responseto these changes in the business environment, we streamed live events without spectators and carried out other new initiatives
for live events that are suited to this environment.
As a result, net sales in the Visual and Music Production Business were 11,091 million yen (year-on-year decrease of
46.6%), and segment profit was 826 million yen (year-on-year decrease of 78.5%).
IP Creation Business
As for the IP Creation Business, we stirred up public attention by disseminating information on production of video
works and IP such as the Mobile Suit Gundam series and the LoveLive! series, leading to those series gaining popularity. In
addition, because SOTSU CO., LTD., which became a consolidated subsidiary of the Company in the previous fiscal year,
belonged to this business unit in the first quarter of the fiscal year ending March 31, 2021, goodwill was amortized despite
recording the revenue of said company.
As a result, net sales in the IP Creation Business were 9,559 million yen (year-on-year increase of 21.8%), and segment
profit was 1,914 million yen (year-on-year decrease of 15.1%).
Other Businesses
Other Businesses consist of companies that conduct businesses such as logistics support, printing, and other kinds ofadministration and operational support for each of the Group companies. We are making efforts to manage such operations
related to group support in an efficient manner.
Net sales in the Other Businesses were 15,700 million yen (year-on-year increase of 2.3%), and segment profit was 661
million yen (year-on-year decrease of 29.1%).
(2) Explanation Regarding Financial Position
At the end of the second quarter of the fiscal year ending March 31, 2021, total assets stood at 683,559 million yen, an
increase of 63,739 million yen from the end of the previous fiscal year. The main factors were increases of 5,833 million yen
in trade receivables, 4,842 million yen in finished goods and merchandise, 12,171 million yen in work in process, and 17,008
million yen in investment securities.
Total liabilities amounted to 213,508 million yen, an increase of 48,373 million yen from the end of the previous fiscal
year. The main factor was an increase of 44,478 million yen in short-term loans payable.
Total net assets stood at 470,050 million yen, an increase of 15,366 million yen from the end of the previous fiscal year.
The main factors were increases of 7,109 million yen in retained earnings mainly due to the recording of 31,715 million yen
in profit attributable to owners of parent despite cash dividends paid of 24,606 million yen, and 12,336 million yen invaluation difference on available-for-sale securities, net of tax.
As a result, the equity ratio became 68.6% compared with 72.5% at the end of the previous fiscal year.
(3) Explanation Regarding Consolidated Projections and Other Forward-Looking Statements
Looking ahead, the Group expects uncertainty to continue in countries around the world due to the impact of the spreadof COVID-19 on society, the overall economy, people’s daily lives and consumption. Furthermore, we expect the changes
occurring in the market environment and in user preferences to become more extreme.
Under these circumstances, the Group will continue carrying out initiatives to prevent the spread of COVID-19, giving
the highest priority to the safety of our stakeholders, including employees and their families, and customers. Moreover, as amember of society, we wish to respond to the requests from society and our customers under our Group’s mission to offer“Dreams, Fun and Inspiration” to people around the world through products and services. On the business front, the Groupis working to minimize the impact that the spread of COVID-19 is having on society, the overall economy, people’s daily
lives and consumption, and the impact from the change in the market environment and user preferences, by continuing tocollect information and take flexible countermeasures.

-3-For consolidated projections for the full fiscal year ending March 31, 2021, as the spread of COVID-19 is expected tohave an impact on society and the economy overall, and the future situation is expected to remain unclear in countries aroundthe world, it is difficult to calculate the impacts on each business properly. In addition to the impact of the spread of COVID19 on each business, we plan to reexamine the trend for the coming Christmas and New Year selling season, which is thelargest selling season of the year for the Toys and Hobby Business, progress on the development and sales schedule of home
video games, and other factors when their impact on earnings has become clear; therefore, at this stage we have not revised
the previous projection.
We will promptly disclose any potential impacts on earnings due to changes in the market environment and so forth going
forward.
* For your reference, we are experiencing or expect to experience the following impacts on business operations from the
spread of COVID-19.
• Impact on consumption due to factors including the closure of sales outlets• Postponement or cancellation of events and an associated impact on promotion• Impact on the development schedule of products• Impact on the production schedule of the Group’s factories and other cooperating factories• Impact on the development schedule of home video games and network content and on operation systems• Impact from the closure of amusement facilities• Impact on the schedules or releases of visual productions and package launch scheduled-4-2. Consolidated Financial Statements and Significant Notes(1) Consolidated Balance Sheets(¥ million)
Prior Fiscal Year(As of March 31, 2020)

Current 2nd Quarter(As of September 30, 2020)

AssetsCurrent assets
Cash and time deposits

189,856

190,954

Trade receivables

83,75489,588Finished goods and merchandise

22,282

27,124Work in process

51,09863,270Raw materials and supplies

3,409

4,595

Other current assets

34,65852,485

Allowance for doubtful receivables(1,398)(1,580)Total current assets

383,662

426,439

96,90699,204

Fixed assets
Property, plant and equipment
Intangible assets
Goodwill

15,704

18,160

Other intangible assets

11,71812,532

Total intangible assets

27,42330,693

Investment securities

66,45383,461Other investments and assets

Investments and other assets
45,80744,192

Allowance for doubtful receivables

(432)

(431)

Total investments and other assets

111,827

127,222

236,157

257,119

619,819

683,559

Total fixed assets
Total assets-5-(¥ million)
Prior Fiscal Year(As of March 31, 2020)

Current 2nd Quarter(As of September 30, 2020)

Liabilities
Current liabilities
Trade payables
Short-term loans payable

70,16977,830946

45,425

Provision

3,892

2,050

Other current liabilities

67,49864,015

Total current liabilities

142,506

189,321

Net defined benefit liability

9,840

9,496

Other long-term liabilities

12,788

14,691Long-term liabilities

Total long-term liabilities

22,62824,187

165,135

213,508

Common stock

10,00010,000Capital surplus

52,00452,220Retained earnings

394,699

401,808

Total liabilities
Net assets
Stockholders’ equity

Treasury stock(3,634)(3,899)Total stockholders’ equity

453,069

460,129

16,837

29,174

Accumulated other comprehensive income
Valuation difference on available-for-sale securities, net oftax
Deferred gains or losses on hedges, net of tax

250

(56)

Revaluation reserve for land, net of tax(3,902)(3,902)Foreign currency translation adjustments(12,321)(12,212)Remeasurements of defined benefit plans, net of tax(4,639)(4,283)

Total accumulated other comprehensive income(3,776)

8,718

5,392

1,202

454,684

470,050

619,819

683,559

Non-controlling interests
Total net assets
Total liabilities and net assets-6-

(2) Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income(Consolidated Statements of Operations)(¥ million)
Prior 2nd Quarter(From April 1, 2019
to September 30, 2019)

Current 2nd Quarter(From April 1, 2020
to September 30, 2020)

Net sales

349,327

337,122

Cost of sales

215,437

206,645

Gross profit

133,889

130,477

Selling, general and administrative expenses

85,94784,546

Operating profit

47,94145,930

Dividend income

569

1,145

Share of profit of entities accounted for using equity method343–

Other non-operating income

802

631

Total non-operating income

1,716

1,777

Foreign exchange losses

818

354

Other non-operating expenses

92

159

Non-operating income

Non-operating expenses

Total non-operating expenses

911

514

48,74647,193Gain on sales of investment securities–

276

Reversal of provision for loss on liquidation of affiliatedcompanies

21–

Subsidies for employment adjustment and other related to
COVID-19–

916

Other extraordinary income

29

87

Total extraordinary income

51

1,280

Loss on impairment of fixed assets

36

946

Loss on temporary store closures and other related to
COVID-19

–

2,275

218

193

Recurring profit
Extraordinary income

Extraordinary loss

Other extraordinary loss
Total extraordinary loss

255

3,415

Profit before income taxes

48,54245,059

Income taxes

13,853

13,411

Profit34,68831,647

Profit (loss) attributable to non-controlling interests
Profit attributable to owners of parent

-7-

80

(68)

34,60731,715

(Consolidated Statements of Comprehensive Income)(¥ million)
Prior 2nd Quarter(From April 1, 2019
to September 30, 2019)
ProfitCurrent 2nd Quarter(From April 1, 2020
to September 30, 2020)

34,68831,647(719)

12,248Other comprehensive income
Valuation difference on available-for-sale securities, net oftax
Deferred gains or losses on hedges, net of tax

(63)

(306)

(3,995)95

Remeasurements of defined benefit plans, net of tax

292

356

Share of other comprehensive income of associates
accounted for using equity method

33

148

Foreign currency translation adjustments

Total other comprehensive income
Comprehensive income(4,451)

12,54330,23644,19030,172

44,21164(20)Comprehensive income attributable toComprehensive income attributable to owners of the parent
Comprehensive income attributable to non-controllinginterests-8-

(3) Notes to Consolidated Financial Statements(Notes on Premise of Going Concern)
Not applicable.

(Notes on Significant Changes in the Amount of Stockholders’ Equity)
Not applicable.

(Application of Special Accounting for Preparing the Quarterly Consolidated Financial Statements)(Calculation of taxes)
Taxes are calculated first by reasonably estimating the effective tax rate after applying tax effect accounting against
profit before income taxes for the fiscal year including the current second quarter, and next by multiplying the profit before
income taxes by such estimated effective tax rate.

(Segment Information)
I. Prior 2nd Quarter (From April 1, 2019 to September 30, 2019)
1. Information regarding the amounts of net sales and profit/loss by reportable segment(¥ million)
Reportable segments
Adjustments(Note 2)

Consolidated
Total(Note 3)349,327–

349,327

10,862

22,517(22,517)–356,502

15,342371,844(22,517) 349,327

50,203932

51,136(3,194)

Network
Real
Visual andToys andIP
Entertain- Entertain- Music
Hobby
Creationmentment Production
Business
Business
Business Business Business

Subtotal

123,889

150,785

46,514

18,123

5,533

Inter-segment sales
and transfers

4,155

2,250

295

2,637

Total

128,044

153,036

46,810

Segment profit

17,62024,964

1,526

Other
(Note 1)

Total

344,847

4,479

2,316

11,655

20,761

7,850

3,837

2,255

Net sales
To externalcustomers

Notes: 1.

47,941The “Other” category is a business segment not included in reportable segments under which operations such as
logistics services and printing for each of the Group companies are classified.

2.

Included in the 3,194 million yen deducted from segment profit as adjustment are an addition of 277 million yen
in inter-segment eliminations, and a deduction of 3,472 million yen in corporate expenses that cannot be allocatedto any reportable segment. The corporate expenses are mainly costs related to the administration division that has
not been attributed to a reportable segment.

3.

Segment profit is adjusted with operating profit in the consolidated statements of operations.

2. Information regarding loss on impairment of fixed assets and goodwill by reportable segment(Material loss on impairment of fixed assets)
Not applicable.
(Material changes in the amount of goodwill)
Not applicable.
(Material gains on negative goodwill)
Not applicable.

-9-II. Current 2nd Quarter (From April 1, 2020 to September 30, 2020)
1. Information regarding the amounts of net sales and profit/loss by reportable segment(¥ million)
Reportable segments
Adjustments(Note 2)

Consolidated
Total(Note 3)

337,122–

337,122

10,876

22,680(22,680)–

344,10215,700359,803(22,680) 337,122

48,253661

48,914(2,984)

Network
Real
Visual andToys andIP
Entertain- Entertain- Music
Hobby
Creationmentment Production
Business
Business
Business Business Business

Subtotal

125,454

168,71123,922

9,572

4,637

Inter-segment sales
and transfers

3,403

1,561

397

1,519

Total

128,858

170,273

24,320

Segment profit (loss)

18,80934,726(8,022)

Other(Note 1)

Total

332,299

4,823

4,921

11,803

11,091

9,559

826

1,914

Net sales
To externalcustomers

Notes: 1.

45,930The “Other” category is a business segment not included in reportable segments under which operations such as
logistics services and printing for each of the Group companies are classified.

2.

Included in the 2,984 million yen deducted from segment profit (loss) as adjustment are an addition of 180 million
yen in inter-segment eliminations, and a deduction of 3,164 million yen in corporate expenses that cannot beallocated to any reportable segment. The corporate expenses are mainly costs related to the administration divisionthat has not been attributed to a reportable segment.

3.

Segment profit (loss) is adjusted with operating profit in the consolidated statements of operations.

2. Information regarding loss on impairment of fixed assets and goodwill by reportable segment(Material loss on impairment of fixed assets)
Not applicable.
(Material changes in the amount of goodwill)In the IP Creation Business, goodwill increased 3,676 million yen due to the acquisition of additional shares of
SOTSU CO., LTD., a consolidated subsidiary of the Company.
(Material gains on negative goodwill)
Not applicable.
3. Information regarding changes to reportable segments, etc.
Effective the first quarter of the fiscal year ending March 31, 2021, the classification of SOTSU CO., LTD., which
previously was classified as a business belonging to the Other segment, was changed to a business belonging to the IP
Creation Business in order to strengthen the IP Axis Strategy.
As SOTSU CO., LTD. changed from being an associate accounted for using the equity method to a consolidated
subsidiary in the previous fiscal year on the deemed acquisition date of November 30, 2019, the operating results of thatcompany are not included in the second quarter of the fiscal year ended March 31, 2020.

- 10 -

(Significant Subsequent Events)(Business combination through acquisition)
The Company’s consolidated subsidiary BANDAI NAMCO Entertainment Europe S.A.S. (“BNEE”), which belongs to
the Network Entertainment Unit, concluded an agreement to acquire 100% of the issued shares of Reflector EntertainmentLtd. (“Reflector”) in accordance with the resolution passed at the Board of Directors meeting of the Company held on
September 16, 2020 and acquired the shares on October 22, 2020.
1. Overview of business combination(1)

Name and description of business of the acquired company
Name of the acquired company:

Reflector Entertainment Ltd.

Description of business:

Content planning and production, and development of home video
games, etc.

(2)

Main reasons for business combination
In accordance with our three-year Mid-term Plan started in April 2018, the Group is strengthening the IP
Axis Strategy in the global market, continuing to empower, gain momentum, and accelerate evolution
without being bound by previous business models and established ideas, and aiming for the next stage as anentertainment company.
Currently, the Network Entertainment Business, in order to increase the presence of the home video
game business and network content business in the global market, is working to improve the quality of its
titles, enhance the development system and strengthen its marketing.
Reflector possesses high technical development capabilities in the development of home video game
titles, and is currently developing the new title “Unknown 9: Awakening” in partnership with BNEE.
Through this share acquisition where Reflector, an important business partner, became a subsidiary of
BNEE, the Company aims to build a portfolio of home video games for the Americas and Europe with aproper balance of Japan-developed and locally developed titles by strengthening the development system
necessary to create and expand locally developed home video game titles.

(3)

Date of business combination
October 22, 2020

(4)

Legal form of business combination
Acquisition of shares(5)Company name after combination
Reflector Entertainment Ltd.

(6)

Ratio of voting rights acquired
100%

(7)

Identification of the acquiring company
BNEE was identified as the acquirer since it acquired the shares in exchange for cash.

2. Acquisition cost of the acquired company, and consideration for the acquisition and breakdown thereof byconsideration type
Consideration for the acquisition:

Cash

Acquisition cost:(Note)

1,862 million yen
1,862 million yen

Consideration for the acquisition does not include contingent consideration for acquisition. Contingent
consideration for acquisition is not determined at this time because it is specified in the agreement that
additional consideration for the acquisition shall be paid based on performance levels, etc. of theacquired company over a certain period of time.

- 11 -

3. Amount, cause, amortization method, and amortization period of goodwill arising on the acquisition
Not determined at this time.
4. Amounts and breakdown of assets acquired and liabilities assumed on the date of the business combination
Not determined at this time.

- 12 -