Consolidated Financial Report for the Third Quarter of
the Fiscal Year Ending March 31, 2009

February 12, 2009DISCLAIMER- NAMCO BANDAI 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.

-1-

Stock Listing: Tokyo Stock Exchange
Code Number: 7832
(URL: http://www.bandainamco.co.jp/)
February 12, 2009

Consolidated Financial Report for the Third Quarter of
the Fiscal Year Ending March 31, 2009
Representative:
Contact:
Scheduled filing date of the quarterly report:

Takeo Takasu, President and Representative Director
Yuji Asako, Executive Officer, Corporate Planning Division
February 12, 2009

1. Consolidated Results for the Third Quarter of the Fiscal Year Ending March 31, 2009
(April 1, 2008 to December 31, 2008)(Millions of yen with fractional amounts discarded, unless otherwise noted)(1) Consolidated Operating Results (For the nine months ended December 31, 2008)(Percentages indicate year-on-year changes.)
Operating income
Recurring income

Net sales

Third Quarter of the Fiscal YearEnding March 31, 2009
Third Quarter of the Fiscal Year
Ended March 31, 2008

¥ million
315,647%–¥ million
19,841%–¥ million
21,658%–335,602

1.5

25,772(20.0)

28,241(18.2)Net income

Third Quarter of the Fiscal YearEnding March 31, 2009
Third Quarter of the Fiscal Year
Ended March 31, 2008

Net income per share

Net income per share(diluted)¥ million
9,019

%
–

¥
36.32

¥
36.28

14,712(26.0)

57.91

57.80

(2) Consolidated Financial Position
Total assets

Net assets

Equity ratio¥ million¥ million%
As of December 31, 2008
377,801
268,223
70.2
As of March 31, 2008
413,023
289,944
69.4(Reference)
Equity: 265,157 million yen (as of December 31, 2008), 286,795 million yen (as of March 31, 2008)-2-

Net assets
per share¥
1,098.84
1,127.72

2. Dividend
Dividend per share
End of
End of
End offirst quarter second quarter third quarter
¥
¥
¥
–
12.00
–
–
12.00
–
–––
–––
–––

Dividend record dates

Fiscal Year Ended March 31, 2008

Fiscalyear-end

Total

¥
12.00
–––
12.00

¥
24.00
–––
24.00

Fiscal Year Ending March 31, 2009
(Projection)
Fiscal Year Ending March 31, 2009
Note: Revision of the projection in the third quarter of the fiscal year ending March 31, 2009: None
The stable portion of the dividend is given in the projection for the fiscal year-end based on the Company’s basic policy regarding
appropriation of profits. Thus, the actual fiscal year-end dividend will be decided according to the consolidated financial results.

3. Consolidated Projections for the Fiscal Year Ending March 31, 2009
(April 1, 2008 to March 31, 2009)(Percentages indicate year-on-year changes.)
OperatingRecurring
Net income
Net income
incomeincomeper share¥ million% ¥ million% ¥ million% ¥ million%¥
Full Year
440,000(4.4)
24,000(28.2)
26,000(28.2)
13,000(60.2)
52.69
Note: Revision of the projections in the third quarter of the fiscal year ending March 31, 2009: None
Net sales

4. Other Information(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Resulting in the Change in Scope ofConsolidation): Yes
Included: None

Excluded: 1 company (Banpresto Co., Ltd.)

Note: For more details, please refer to the section of “4. Others” of “Qualitative Information and Financial Statements” on page 10.
(2) Application of Simplified Accounting and Special Accounting for Preparing the Quarterly Consolidated Financial Statements: Yes
Note: For more details, please refer to the section of “4. Others” of “Qualitative Information and Financial Statements” on page 10.
(3) Changes in Accounting Policies, Procedures, and Methods of Presentation for Preparing the Quarterly Consolidated Financial
Statements
a. Changes due to revisions to accounting standards and other regulations: Yes
b. Changes due to other reasons: Yes
Note: For more details, please refer to the section of “4. Others” of “Qualitative Information and Financial Statements” on page 10.
(4) Number of Issued Shares (Common Stock)a. Total number of issued shares at the end of the period (including treasury stock)
As of December 31, 2008

250,000,000 shares

As of March 31, 2008

256,080,191 sharesb. Number of shares of treasury stock at the end of the period
As of December 31, 2008

8,692,819 shares

As of March 31, 2008

1,766,271 sharesc. Average number of shares during the period (cumulative from the beginning of the fiscal year)
For the third quarter of the fiscal year ending March 31, 2009

248,374,481 shares

For the third quarter of the fiscal year ended March 31, 2008

254,062,697 shares-3-

*Proper use of earnings projections, and other special matters
1. The above projections are based on information available to the Company as of the date of the announcement of these materials. Actual
business results may differ from the projections due to a number of factors in the future. Please refer to the section of “3. Qualitative
Information Regarding Consolidated Projections” of “Qualitative Information and Financial Statements” on page 9 for matters pertaining
to the above projections.
2. Commencing with the current fiscal year, the quarterly consolidated financial statements conform to the “Accounting Standard for
Quarterly Financial Reporting” (ASBJ [Accounting Standards Board of Japan] Statement No. 12, March 14, 2007) and the “Guidance on
Accounting Standard for Quarterly Financial Reporting” (ASBJ Guidance No. 14, March 14, 2007). They are also prepared inaccordance with the “Regulation for Quarterly Consolidated Financial Statements.”-4-

Qualitative Information and Financial Statements
Note: Concerning the comparison with the same period a year ago, the percentage values and the monetary amounts areprovided for reference purposes only.

1. Qualitative Information Regarding Consolidated Operating Results
The economic environment during the first nine months of the fiscal year ending March 31, 2009 was sluggish,particularly with respect to private consumption both in Japan and overseas amid a growing concern for the economic
outlook, which was fueled by the disarray in the financial markets that emerged out of the U.S. subprime mortgage crisis.
With the backdrop of a rapid deterioration of corporate earnings, employment insecurity developed into a societal problem. In
the entertainment industry, uncertainty remained due to the flagging consumption in the industry.
With these general economic concerns as a background, the BANDAI NAMCO Group (“the Group”) is pushing ahead
with “strengthening, enriching, and expanding of its portfolio management” in line with the three-year Mid-term Business
Plan, which is in its final year.
On the business front, in this harsh market conditions, the Toys and Hobby Business delivered steady performancecentering on long-established character toys during the end-of-year sales, the biggest sales season of the year, and in theGame Contents Business, the popular titles overseas significantly contributed to earnings in home video game software.
However, in an environment of weak private consumption, performance overall was sluggish and lower than the same periodof the previous fiscal year.
With regard to expenses, amortization of goodwill was recorded for BANDAI VISUAL CO., LTD., and BANDAI
NETWORKS CO., LTD., which both became wholly-owned subsidiaries in the previous fiscal year. Also, loss on valuationof investment securities was recorded, along with an increase in income taxes in Americas region.
As a result, the consolidated operating results for the first nine months were as follows. Net sales were 315,647 million
yen (a year-on-year decrease of 5.9%), operating income was 19,841 million yen (a year-on-year decrease of 23.0%),
recurring income was 21,658 million yen (a year-on-year decrease of 23.3%), and net income was 9,019 million yen (ayear-on-year decrease of 38.7%).

Operating Results by Business Segment(¥ million)
Net Sales

Current 3rd
QuarterPrior 3rd
Quarter

Operating Income
ChangeCurrent 3rd
QuarterPrior 3rd
Quarter

ChangeToys and Hobby

119,901

131,854(11,952)

10,413

11,536(1,122)

Amusement Facility

59,096

67,246(8,149)

48

1,004

(956)

Game Contents

106,198

104,509

1,688

10,162

9,992

169

Network

8,025

8,956

(930)

445

639

(194)

Visual and Music Content

23,75026,639(2,889)

162

3,789

(3,626)Other

14,114

15,041

(926)

426

825

(399)

Elimination and Corporate(15,439)(18,644)

3,205(1,815)(2,015)199

Consolidated

315,647

335,602(19,954)

19,841

25,772(5,931)-5-

Toys and Hobby BusinessIn the Toys and Hobby Business in Japan, which was robust overall, strong performers during the end-of-year sales, thebiggest sales season of the year, were the long-established character toys such as Engine Sentai Go-Onger and cooking toys
for girls. Also, the card game Battle Spirits has made a strong start, with its coordinated expansion including a TV animation.
The peripheral toy business, however, struggled in an environment of weak private consumption.
In overseas, the BEN10 character toys for boys contributed to earnings in the U.S. and Europe, but the performance fell
short of the same period last year which enjoyed strong performance from Tamagotchi.
As a result, net sales in the Toys and Hobby Business were 119,901 million yen (year-on-year decrease of 9.1%) andoperating income was 10,413 million yen (year-on-year decrease of 9.7%).

Amusement Facility BusinessIn the Amusement Facility Business, existing facilities in Japan were in harsh market conditions, and maintained sluggish
sales at 87.4% of the result of the same period a year ago. Under these conditions, aiming to make ongoing improvements inoperational efficiency to improve profitability, the Group implemented actions toward closing some of its facilities.
Overseas, in the U.S., facilities battled harsh market conditions, while in Europe, performance was steady, particularly
among hybrid facilities in the U.K. In Asia, a large-scale facility leveraging the Group’s synergy, Wonder Park Plus (HongKong) became popular.
As a result, net sales in the Amusement Facility Business were 59,096 million yen (year-on-year decrease of 12.1%) andoperating income was 48 million yen (year-on-year decrease of 95.2%).

Facilities as of December 31, 2008
Directly-Managed Facilities

Revenue-Sharing Facilities

Theme Parks

Spa Facilities

Total

345

1,209

4

3

1,561

Game Contents BusinessIn the Game Contents Business, sales of Soul Calibur IV for the PLAYSTATION 3 and Xbox360, which has beenreleased world-wide, exceeded 2 million units, significantly contributing to home video game software earnings. In Japan,
Gundam Musou 2, developed for the multiple platforms of PLAYSTATION 3, Xbox360 and PlayStation 2, Taiko Drum
Master Wii for Nintendo Wii, and Mobile Suit Gundam: Gundam VS. Gundam for PSP became popular. Also Active Life
Outdoor Challenge (Family Trainer Athletic World in Japan) for Nintendo Wii has made a strong start in Europe and North
America.
With regard to arcade game machines, although the large medal machine Sea Story Lucky Marine Theater gained
popularity, sales were down on the same period a year ago when strong sales were maintained particularly with respect torepeat sales. Game contents for mobile phones and other mobile devices delivered steady performance as a result of thedevelopment of a variety of content catering to users’ increasingly diverse preferences.
As a result, net sales in the Game Contents Business were 106,198 million yen (year-on-year increase of 1.6%) andoperating income was 10,162 million yen (year-on-year increase of 1.7%).

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Network BusinessIn the Network Business, game content within the mobile content business, tailored to a variety of users’ needs from highvalue-added content such as GUNDAM GATE and ONE PIECE Mobile Jack to casual games such as SIMPLE 100 and Zoo
Keeper, continued to perform well. In addition, customizable wallpapers for mobile phones such as Mobile Suit Gundam andHello Kitty became popular but the number of ring tone service subscribers continued to follow a trend of decline.
As a result, net sales in the Network Business were 8,025 million yen (year-on-year decrease of 10.4%). Operating
income, which includes the recording of amortization of goodwill, was 445 million yen (year-on-year decrease of 30.4%).

Visual and Music Content BusinessIn the Visual and Music Content Business in Japan, with regard to visual software packages, the TV animations Mobile
Suit Gundam 00, Macross F (Frontier) and CODE GEASS: Lelouch of the Rebellion R2, released simultaneously on Blu-ray
Disc and DVD, became popular but amid a time of changing hardware from DVD to Blu-ray Disc, performance overall was
sluggish. Sales of music software packages, particularly those related to animation, delivered strong performance. Overseas,
however, the Visual and Music Content Business struggled in the U.S., under harsh market conditions.
As a result, net sales in the Visual and Music Content Business were 23,750 million yen (year-on-year decrease of 10.8%).
Operating income, which includes the recording of amortization of goodwill, was 162 million yen (year-on-year decrease of
95.7%).

Other Business
Other Businesses consist of companies that provide support to the Group’s strategic business units such as logistics andbuilding management services. During the first nine months of the fiscal year ending March 31, 2009, the business remained
focused in its efforts to improve the operational efficiency of these group support services.
As a result, net sales in the Other Business were 14,114 million yen (year-on-year decrease of 6.2%) and operating
income was 426 million yen (year-on-year decrease of 48.4%).

Operating Results By Geographic Segment(¥ million)
Net Sales

Current 3rd
QuarterPrior 3rd
Quarter

Operating Income (Loss)
ChangeCurrent 3rd
QuarterPrior 3rd
Quarter

ChangeJapan

249,008

270,261(21,252)

13,29221,099(7,806)

Americas35,77935,502

276

1,697

(85)

1,783

Europe34,176

31,603

2,573

5,421

4,672

749

Asia

27,323

27,411

(87)

1,790

2,129

(339)

Elimination and Corporate(30,640)(29,175)(1,464)(2,360)(2,043)(316)

Consolidated

315,647

335,602(19,954)

19,841

25,772(5,931)-7-

JapanIn the Toys and Hobby Business, long-established character toys such as Engine Sentai Go-Onger maintained steady
performance and the card game Battle Spirits made a strong start, but the peripheral toy businesses struggled due to weak
private consumption. The Amusement Facility Business, particularly existing facilities, struggled under harsh market
conditions. In the Game Contents Business, Gundam Musou 2, developed for the multiple platforms of PLAYSTATION 3,
Xbox360 and PlayStation 2, Taiko Drum Master Wii for Nintendo Wii became popular and contributed to earnings. With
regard to arcade game machines, sales were down on the same period a year ago when strong sales were maintained
particularly with respect to repeat sales. In the Visual and Music Content Business, sales remained sluggish amid a hardware
transition period.
As a result, net sales in Japan were 249,008 million yen (year-on-year decrease of 7.9%). Operating income, which
includes the recording of amortization of goodwill in association with BANDAI VISUAL CO., LTD. and BANDAI
NETWORKS CO., LTD. becoming wholly-owned subsidiaries, was 13,292 million yen (year-on-year decrease of 37.0%).

Americas
In the Toys and Hobby Business, the BEN10 character toys for boys performed strongly but the performance fell short ofthe same period last year which enjoyed strong performance from POWER RANGERS and Tamagotchi. In the Amusement
Facility Business, the Group battled under harsh conditions. In the Game Contents Business, Soul Calibur IV for the
PLAYSTATION 3 and the Xbox360 contributed strongly to earnings, while Active Life Outdoor Challenge (Family Trainer
Athletic World in Japan) for Nintendo Wii made a strong start. In the Visual and Music Content Business, however, the Groupstruggled under harsh market conditions.
As a result, net sales in Americas were 35,779 million yen (year-on-year increase of 0.8%) and operating income was
1,697 million yen (compared with an operating loss of 85 million yen in the same period a year ago).

EuropeIn the Toys and Hobby Business, the BEN10 character toys for boys performed strongly but the performance fell short ofthe same period last year which enjoyed strong performance from POWER RANGERS and Tamagotchi. The Amusement
Facility Business showed steady performance, particularly among hybrid facilities in the U.K. In the Game Contents
Business, Soul Calibur IV, developed for the PLAYSTATION 3 and the Xbox360, and Dragon Ball Z: Burst Limit for the
PLAYSTATION 3 and the Xbox360 became popular, delivered strong performance.
As a result, net sales in Europe were 34,176 million yen (year-on-year increase of 8.1%) and operating income was 5,421
million yen (year-on-year increase of 16.0%).

Asia
The Toys and Hobby Business delivered a steady performance centering on the Mobile Suit Gundam plastic models andthe POWER RANGERS character toys for boys, but the performance fell short of the same period last year. In the Amusement
Facility Business, Wonder Park Plus (Hong Kong), a large-scale facility also serving as the base for the Group’s information
dissemination in the Asia region, became popular.
As a result, net sales in Asia were 27,323 million yen (year-on-year decrease of 0.3%) and operating income was 1,790
million yen (year-on-year decrease of 16.0%).

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2. Qualitative Information Regarding Consolidated Financial Position
At the end of the third quarter of the fiscal year ending March 31, 2009, total assets stood at 377,801 million yen, adecrease of 35,221 million yen from the end of the previous fiscal year. The main factors of this decline were a decrease of
25,966 million yen in cash and time deposits due to the purchase of treasury stock and the payments of dividends and income
taxes, and a decrease of 6,570 million yen in property, plant and equipment.
Total liabilities amounted to 109,577 million yen, a decrease of 13,501 million yen from the end of the previous fiscal
year. The main factors of this decline were decreases in accounts payable–other included in other current liabilities, accrued
income taxes, and long-term debt of 6,272 million yen, 2,074 million yen, and 2,669 million yen, respectively.
Total net assets stood at 268,223 million yen, a decrease of 21,720 million yen from the end of the previous fiscal year.
The main factors of this decline were an increase in treasury stock of 6,782 million yen, and a decrease in additional paid-in
capital of 8,294 million yen as a result of purchases and retirement of treasury stock, and a decline of 8,722 million yen intranslation adjustments as a result of currency rate fluctuation.
As a result, the equity ratio became 70.2% compared with 69.4% at the end of the previous fiscal year.

As of the end of the third quarter, cash and cash equivalents (hereafter “funds”) remaining on hand had decreased by
25,971 million yen from the end of the previous fiscal year to 103,317 million yen. Below is the breakdown of cash flows by
activities.

Cash Flows from Operating Activities
The amount of funds provided by Operating Activities totaled 2,261 million yen (down 80.7% compared with the same
period of the previous fiscal year). As a main breakdown of funds used, income taxes paid was 12,474 million yen (15,954
million yen in the same period of the previous fiscal year), inventories increase by 7,132 million yen (compared with 7,713
million yen in the same period of the previous fiscal year). However, overall, there was a net increase in funds due to income
before income taxes and minority interests of 20,074 million yen (28,048 million yen in the same period of the previous fiscal
year).

Cash Flows from Investing Activities
The amount of funds provided by Investing Activities totaled 271 million yen (32,354 million yen used in the same periodof the previous fiscal year).There was 7,381 million yen in payments for purchases of property, plant and equipment, andintangible assets (11,751 million yen in the same period of the previous fiscal year). However, this was offset mainly by
3,907 million yen in proceeds from sale of property, plant and equipment (609 million yen in the same period of the previous
fiscal year) and 4,030 million yen in proceeds from withdrawal from time deposits (1,284 million yen in the same period of
the previous fiscal year).

Cash Flows from Financing Activities
The amount of funds used in Financing Activities amounted to 23,726 million yen (up 511.4% compared with the same
period of the previous fiscal year). Main factors of this decline in funds are 17,500 million yen in payments into fund trust forpurchase of treasury stock (not applicable in the same period of the previous fiscal year) and dividends paid of 6,009 million
yen (7,162 million yen in the same period of the previous fiscal year).

-9-3. Qualitative Information Regarding Consolidated Projections
As for the future of the economy, there are fears that the trend of economic recession that has occurred from the disarrayof the global financial market will become prolonged and serious. Also, the uncertain environment of weak private
consumption and employment insecurity is expected to continue. This, moreover, is impacting the entertainment industry, inwhich the Group is extensively involved, and the Group expects the harsh business environment will continue.
Amidst these conditions, during the current Mid-term Business Plan, the BANDAI NAMCO Group will continue topromote the “strengthening, enriching, and expanding of its portfolio management”. In addition, the Group will focus ondeveloping strong foundations with respect to profitability and organizational structure for the next Mid-term Business Plan
starting April 2009.
Specifically, in the Toys and Hobby Business, in Japan, while strengthening development of the products Samurai Sentai
Shinkenger, Masked Rider Decade, and FRESH Pretty Cure, all of which are new TV shows, the Group will focus on Battle
Spirits, whose development is centered on a card game. Overseas, the Group will work on strengthening productdevelopment centering on the action figures BEN10, and POWER RANGERS.
For the Amusement Facility Business, in Japan, the Group will continue to pursue improved profitability by closing somefacilities, reviewing the rules for facility openings/closures, and implementing a variety of other efficiency improvement
strategies. For overseas, the Group will aim to strengthen its earnings base according to strategies that exploit regional
characteristics.
In the Game Contents Business, the Group will strengthen its balanced multi-platform strategy for home video gamesoftware targeted for the global market, which adapts to user preferences. As for the arcade game machines, the Group will
beef up the link between its arcade game machines and its amusement facilities.
As for the Network Business, the Group will bolster the earnings base by developing content designed with profitability
in mind, and commence preparations for Group reorganization that will begin from next fiscal year.
In the Visual and Music Content Business, the Group will continue to market popular TV animations on Blu-ray Disc andDVD. Also, the Group will release such globally well-known titles on Blu-ray Disc simultaneously throughout the world,
focusing on making sure the content characteristics are tailored to suit the platform and the geographic location.
As a result of the above, the Group has not made any changes to its full-year consolidated projections for the fiscal year
ending March 31, 2009, which were announced on November 5, 2008.

4. Others(1) Changes in Significant Subsidiaries during the Period (Changes in Specified Subsidiaries Resulting in the Change in
Scope of Consolidation)
As of April 1, 2008, the prize business of Banpresto Co., Ltd. (hereafter, “Banpresto”), a specified subsidiary of theCompany, was separated to newly incorporate Banpresto Co., Ltd. At the same time, Banpresto’s game operations,encompassing planning, development, and sales of Banpresto’s game software and amusement machines were merged byabsorption-type merger with NAMCO BANDAI Games, Inc., a specified subsidiary of the Company. As a result,
Banpresto is an extinct company and is not included within the scope of specified subsidiary from the first quarter.

- 10 -

(2) Application of Simplified Accounting and Special Accounting for Preparing the Quarterly Consolidated Financial
Statements
a. Calculation of debt default estimate for general receivables
As it is deemed that there is no material change in the debt default ratio and the like at the end of the current third
quarter from what was calculated at the end of the previous fiscal year, debt default estimate was calculated using thedebt default ratio and the like at the end of the previous fiscal year.

b. Inventory valuation method
With respect to the calculation of inventories at the end of the current third quarter, physical inventories were omitted
and a reasonable calculation method based on the physical inventories at the end of the previous fiscal year was
employed.
In addition, concerning the write-down of the book value of inventories, only for those items whose drop in
profitability was apparent, was an estimate of net selling price made and were book values written down.

c. Calculation of depreciation of fixed assets
For fixed assets to which the declining-balance method is applied, the amount of depreciation for the fiscal year is
proportionally divided up into amounts for the quarterly period.

d. Calculation of taxes
Taxes are calculated first by reasonably estimating the effective tax rate after applying tax effect accounting against
income before income taxes and minority interests for the fiscal year including the current third quarter, and next bymultiplying the quarterly income before income taxes and minority interests by such estimated effective tax rate.
Also, adjustment for income taxes is included in income taxes.

(3) Changes in Accounting Policies, Procedures, and Methods of Presentation for Preparing the Quarterly Consolidated
Financial Statements
Changes in Accounting Treatments
a. Application of “Accounting Standard for Quarterly Financial Reporting” and related regulations
Commencing with the current fiscal year, the quarterly consolidated financial statements conform to the “AccountingStandard for Quarterly Financial Reporting” (ASBJ Statement No. 12, March 14, 2007) and the “Guidance on
Accounting Standard for Quarterly Financial Reporting” (ASBJ Guidance No. 14, March 14, 2007). They are also
prepared in accordance with the “Regulation for Quarterly Consolidated Financial Statements.”

b. Application of “Accounting Standard for Measurement of Inventories”
Before the change, in consolidated subsidiaries in Japan, game software and other work in process were stated byusing the specific cost method, and inventories held for normal sales were stated at cost by mainly using the total averagemethod. However, because the “Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, July 5,2006) is applied from the first quarter, game software and other work in process are stated by using the specific cost
method (for the value stated in the balance sheet, write-downs based on the decreased profitability), and inventories held
for normal sales are stated at cost by mainly using the total average cost method (for the value stated in the balance sheet,- 11 -

write-downs based on the decreased profitability).
This change has immaterial impact on operating income, recurring income and income before income taxes andminority interests.

c. Application of “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements”
From the first quarter, the “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries
for Consolidated Financial Statements” (PITF Practical Solution No. 18, May 17, 2006) is applied, and necessary
amendments for consolidated financial statements are made.
As a result of this change, operating income decreased by 19 million yen, and recurring income and income before
income taxes and minority interests each decreased by 26 million yen.
Note that the impact on segment information is shown on the segment information page.

d. Application of “Accounting Standard for Lease Transactions” and related regulation
Before the change, in the Company and consolidated subsidiaries in Japan, the accounting treatment for finance leasetransactions not involving the transfer of ownership followed, mutatis mutandis, the method for operating leasetransactions. However, because the “Accounting Standard for Lease Transactions” (ASBJ Statement No. 13 [BusinessAccounting Council Committee No. 1, June 17, 1993; revised March 30, 2007]) and the “Guidance on AccountingStandard for Lease Transactions” (ASBJ Guidance No. 16 [The Japanese Institute of Certified Public Accountants(JICPA) Accounting Standard Committee, January 18, 1994; revised March 30, 2007]) can be applied starting fromquarterly consolidated financial statements for the fiscal year beginning on or after April 1, 2008, commencing with thefirst quarter, this accounting standard and guidance is applied and the accounting treatment for such transactions follows
the method for ordinary purchase or sales transactions.
Depreciation of lease assets pertaining to finance lease transactions not involving the transfer of ownership is
calculated on a straight-line method over the lease period as useful life without residual value.
This change has no impact on operating income, recurring income and income before income taxes and minority
interests.
Also, the accounting treatment for finance and lease transactions not involving the transfer of ownership whosetransaction commenced before the current first fiscal year in which the Accounting Standard for Lease Transactions andrelated regulations are applied continuously follows, mutatis mutandis, the method for operating lease transactions.

Additional Information
Change in useful life for property, plant and equipment
Commencing with the first quarter, some consolidated subsidiaries in Japan have changed the useful life following
the amendment of statutory useful life due to the revision of the Corporate Tax Law in 2008.
This change has immaterial impact on operating income, recurring income and income before income taxes andminority interests.

- 12 -

5. Quarterly Consolidated Financial Statements(1) Quarterly Consolidated Balance Sheets(¥ million)
Current 3rd Quarter
As of December 31, 2008

(Summary) Prior Fiscal YearAs of March 31, 2008

AssetsCurrent assets
Cash and time deposits

100,137

126,103

Trade receivables

74,794

73,140

Short-term investments

4,466

7,068

Merchandise and finished goods

14,392

11,463Work in process

23,254

21,481

Raw materials and supplies

4,914

3,484

Other current assets

24,401

25,578

Allowance for doubtful receivables

(363)

(607)

245,997

267,71356,87663,446

Goodwill

13,09815,800

Other intangible assets

10,553

11,191

Total intangible assets

23,651

26,991Other investments and other assets

52,59756,087

Allowance for doubtful receivables(1,322)(1,215)

Total investments and other assets

51,27554,871

131,803145,309377,801

413,023

Total current assets
Fixed assets
Property, plant and equipment
Intangible assets

Investments and other assets

Total fixed assets
Total assets- 13 -

(¥ million)
Current 3rd Quarter
As of December 31, 2008

(Summary) Prior Fiscal YearAs of March 31, 2008

Liabilities
Current liabilities
Trade payables

43,63642,603

Short-term borrowings

5,465

5,338

Accrued income taxes

7,188

9,262

Provision

2,262

2,385

Other current liabilities

32,99442,059Total current liabilities

91,548

101,648

Long-term debt

7,993

10,662

Provision

1,910

1,598

269

346

Other long-term liabilities

7,856

8,823

Total long-term liabilities

18,02921,430109,577

123,079

Common stock

10,00010,000Additional paid-in capital

79,651

87,945Retained earnings

196,643

192,865

Treasury stock(9,622)(2,840)Total stockholders' equity

276,671

287,971(1,569)

192

48

(112)

Land revaluation(6,299)(6,284)

Translation adjustments(3,693)

5,028

Total valuation difference and translation
adjustments(11,514)(1,175)

Stock subscription rights

1,611

1,531

Minority interests

1,454

1,616

Total net assets

268,223

289,944377,801

413,023

Long-term liabilities

Negative goodwill

Total liabilities
Net assets
Stockholders' equity

Valuation difference and translation
adjustments
Other securities valuation difference
Deferred gains or losses on hedges, net of
taxes

Total liabilities and net assets- 14 -

(2) Quarterly Consolidated Statement of Income(¥ million)
Current 3rd Quarter(From April 1, 2008
to December 31, 2008)
Net sales

315,647

Cost of sales

202,538

Gross profit

113,109

Selling, general and administrative expenses

93,267

Operating income

19,841Non-operating income
Interest income

1,430

Dividend income

305

Amortization of negative goodwill

86

Equity in gain of affiliated companies

281

Other non-operating income

654

Total non-operating income

2,758

Non-operating expenses
Interest expense

138

Foreign exchange loss

652

Other non-operating expenses

152

Total non-operating expenses

942

Recurring income

21,658Extraordinary income
Gain on sale of fixed assets

1,634

Reversal of allowance for doubtful receivables

46

Gain on reversal of stock subscription rights

25

Other extraordinary income

80

Total extraordinary income

1,787

Extraordinary loss
Loss on sale of fixed assets

10

Loss on impairment of fixed assets

48

Loss on valuation of investment securities

955

Special retirement expenses

651

Litigation settlement

1,083

Other extraordinary loss

621

Total extraordinary loss

3,370

Income before income taxes and minority
interests

20,074

Income taxes

10,875

Minority interests

178

Net income

9,019- 15 -

(3) Quarterly Consolidated Statement of Cash Flows(¥ million)
Current 3rd Quarter(From April 1, 2008
to December 31, 2008)
Cash Flows from Operating Activities
Income before income taxes and minority
interests

20,074

Depreciation and amortization

16,191

Loss on impairment of fixed assets

48

Amortization of goodwill

3,049

Increase (decrease) in allowance for doubtfulreceivables(124)

Increase (decrease) in provision

186

Interest and dividend income(1,735)Interest expense

138

Foreign exchange loss (gain)(36)

Equity in loss (gain) of affiliated companies(281)

Loss on disposal of fixed assets

146

Loss (gain) on sale of fixed assets(1,624)

Loss on disposal of amusement facilities andmachines

635

Loss (gain) on sale of investment securities(66)

Loss (gain) on valuation of investment
securities

979

Decrease (increase) in trade receivables(5,280)Decrease (increase) in inventories(7,132)

Investment for amusement facilities andmachines(6,157)

Increase (decrease) in trade payables

3,509

Increase (decrease) in accounts payable–other(5,627)

Increase (decrease) in consumption tax
payables(1,295)Other(2,510)Subtotal

13,086

Interest and dividends received

1,754Interest paid

(104)

Income taxes paid

(12,474)

Net cash provided by operating activities

2,261- 16 -

(¥ million)
Current 3rd Quarter(From April 1, 2008
to December 31, 2008)
Cash Flows from Investing Activities
Payments for deposit in time deposits(1,393)

Proceeds from withdrawal from time deposits

4,030

Purchases of property, plant and equipment(5,377)

Proceeds from sale of property, plant andequipment

3,907

Purchases of intangible assets(2,003)Purchases of investment securities(140)

Sales of investment securities

233

Acquisition of shares in consolidated
subsidiaries, net of cash acquired(31)

Advances of loans receivable(60)

Collection of loans receivable

278

Guarantee money deposited(999)

Proceeds from collection of guarantee money
deposited

1,835

Other

(5)

Net cash provided by investing activities

271

Cash Flows from Financing Activities
Net increase in short-term borrowings

157

Repayment of long-term debt

(2,669)Payments into fund trust for purchase oftreasury stock
Proceeds from withdrawal of fund trust forpurchase of treasury stock(17,500)
2,376

Purchase of treasury stock(6)

Dividends paid

(6,009)Dividends paid to minority interests(76)

Net cash used in financing activities(23,726)

Effect of exchange rate changes on cash andcash equivalents
Net increase (decrease) in cash and cash
equivalents
Cash and cash equivalents at beginningof period
Increase in cash and cash equivalents due toconsolidation of additional subsidiaries(5,921)(27,114)129,289
1,142

Cash and cash equivalents at end of period

103,317- 17 -

Commencing with the current fiscal year, the quarterly consolidated financial statements conform to the “Accounting Standard for
Quarterly Financial Reporting” (ASBJ Statement No. 12, March 14, 2007) and the “Guidance on Accounting Standard for Quarterly
Financial Reporting” (ASBJ Guidance No. 14, March 14, 2007). They are also prepared in accordance with the “Regulation for Quarterly
Consolidated Financial Statements.”(4) Notes on Premise of Going Concern
No items to report(5) Segment Information[By industry segment]
Current 3rd quarter (April 1, 2008 to December 31, 2008)(¥ million)

Toys and Amusement Game
Hobby
Facility
Contents

Network

Visual andMusic
Content

Other

Total

Elimination
Consolidated
andCorporate

Net sales(1) To external customers

117,985

58,828

101,607

7,745

23,086

6,394

315,647–

315,647(2) Intersegment transactions

1,916

268

4,590

279

664

7,720

15,439(15,439)–

Total

119,901

59,096106,198

8,025

23,750

14,114331,086(15,439)

315,647

Operating income

10,41348

10,162

445

162

426

21,657(1,815)

19,841

Notes:
1. The industry segments used above are those used for internal management purposes.
2. Main products in each business segment:
Toys, candy toys, products for vending machines, cards, plastic models, apparel, sundries(1) Toys and Hobby:
and stationery
Amusement facility operations(2) Amusement Facility:
Home-use video game software, commercial-use video game machines and prizes for(3) Game Contents:
amusement arcade machines
Mobile content(4) Network:
Video products, visual software and on-demand video distribution(5) Visual and Music Content:
Transportation and storage of products, leases, real estate management, printing and(6) Other:development and sale of environmental devices
3. Changes in accounting policy
As set out in 4. (3) Changes in Accounting Treatments c. of Qualitative Information and Financial Statements, we apply the“Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements”(PITF Practical Solution No. 18, ASBJ, May 17, 2006) from the first quarter.
These changes had the following effect on operating income for each segment.
(¥ million)
Toys and Amusement Game
Hobby
Facility
Contents

Operating income (loss)

(17)

–

Network

Visual andMusic
Content––(1)- 18 -

Other

Total

–

(19)

Elimination
andConsolidated
Corporate–(19)

[By geographic segment]
Current 3rd quarter (April 1, 2008 to December 31, 2008)
Japan(¥ million)

Americas

Europe

Asia

Total

Elimination
and Corporate

Consolidated

Net sales(1) To external customers

237,532

33,861

34,164

10,088315,647–

315,647(2) Intersegment transactions

11,476

1,918

11

17,23430,640(30,640)–

Total

249,008

35,77934,17627,323346,288(30,640)

315,647

Operating income

13,292

1,697

5,421

1,790

22,201(2,360)19,841

Notes:
1. Definition of geographic segments and main countries and regions in geographic segments(1) Foreign geographic segments are defined by geographic region, similarity of economic activities, interrelation of businessactivities.
(2) The main countries and regions in each geographic segment are as follows:(i) Americas: United States and Canada(ii) Europe: France, United Kingdom and Spain(iii) Asia:
Hong Kong, Thailand, Korea and China
With the recent establishment of BANDAI (SHENZHEN) CO., LTD., in the second quarter, the Group’s Asia region now
includes China.
2. Changes in accounting policy
As set out in 4. (3) Changes in Accounting Treatments c. of Qualitative Information and Financial Statements, we apply the“Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements”(PITF Practical Solution No. 18, ASBJ, May 17, 2006) from the first quarter.
These changes had the following effect on operating income for each segment.
(¥ million)Japan
Operating income (loss)

Americas–

Europe

–

Asia

(15)

Total
(4)

Elimination
and Corporate

Consolidated

–

(19)

(19)

[Foreign sales]
Current 3rd quarter (April 1, 2008 to December 31, 2008)
Americas
I.

Foreign sales (¥ million)

II.

Consolidated sales (¥ million)

III. Share of sales to customers outside Japan (%)

Europe

Asia

Total

35,72035,036

12,98583,742–––

315,647

11.3

11.1

4.1

26.5

Notes:
1. Foreign sales are defined as total sales by the Company and its consolidated subsidiaries in countries and regions other than Japan.
2. Segmentation by country or by region and the main countries and regions in each geographic segment are as follows:(1) Foreign geographic segments are defined by geographic region, similarity of economic activities, and interrelation of businessactivities.
(2) The main countries and regions in each geographic segment are as follows:(i) Americas: United States, Canada and Latin America(ii) Europe: France, United Kingdom, Spain, Middle East, and Africa(iii) Asia:
Hong Kong, Singapore, Thailand, Korea, Australia, China and Taiwan- 19 -

(6) Notes on Significant Changes in the Amount of Stockholders’ Equity
The Company purchased 13,000,000 shares of its treasury stock (15,112 million yen) during the first nine months inaccordance with the provision of Article 156 of the Companies Act as applied pursuant to Article 165, Paragraph 3 of theCompanies Act.
In addition, the Company retired 6,080,191 shares of its treasury stock (8,336 million yen) pursuant to Article 178 of
the Companies Act as of August 18, 2008, thus reducing its additional paid-in capital by the same amount.
(7) Significant Subsequent Event(Transactions conducted by commonly controlled entities)
Merger of subsidiaries, and transfer, to the Company, of partial operations of subsidiary by company split following thereorganization of Group operations
NAMCO BANDAI Holdings Inc., (hereinafter “the Company”), at a Board of Directors meeting held on January 28,
2009, passed the resolution to conduct an absorption-type merger whereby NAMCO BANDAI Games Inc. (hereinafter“NAMCO BANDAI Games”) is the surviving company and BANDAI NETWORKS CO., LTD., (hereinafter “BANDAI
NETWORKS”) is the company being absorbed. In connection with this, the Company passed the resolution to have part ofthe stock management operations at BANDAI NETWORKS succeeded by the Company by company split (absorption-type
split).

1. Overview of transaction including transaction objectives, name and business content of restructured companies, andlegal form of business combination(1) Overview of transaction including transaction objectives
The Group aims to grow further in network-related markets where the business environment undergoes dramatictransformations in pace with technological development, and in which we face stiff competition on a global scale in ourcontent distribution business for mobile phones. To do this, we have been examining the optimum organizational
structure for the Group.
Under our existing structure, the Group has been striving to promote the growth of the businesses of both NAMCO
BANDAI Games and BANDAI NETWORKS. The strong point of NAMCO BANDAI Games has been the effective
utilization of content based on in-house technological strengths in the respective platforms of home video gamesoftware, arcade game machines, and mobile phones, while the strong point of BANDAI NETWORKS has been thedevelopment of multi-faceted businesses centering on content business for mobile phones and technology solution
services as well as e-commerce business.
With this transaction, the above two companies will be merged and a new division will be established inside
NAMCO BANDAI Games. The division will boost its combined strength in network businesses and create new content
and new businesses by bringing together different expertise.
Furthermore, when the aforementioned Group reorganization is implemented, the part of the stock management
operations at BANDAI NETWORKS shall be succeeded by the Company by company split (absorption-type split).

(2) Name and business content of restructured companies
a. NAMCO BANDAI Games Inc.
Planning, development and sales of home video game software, arcade game machines, etc.

- 20 -

b. BANDAI NETWORKS CO., LTD.
Distribution of mobile phone content, web site development services on consignment, online sales, etc.
c. NAMCO BANDAI Holdings Inc.
Planning and execution of management strategies, management and support of Group companies(3) Legal form and schedule of business combination
a. Absorption-type merger under which NAMCO BANDAI Games will be the surviving company and BANDAI
NETWORKS will be the extinct company.
January 28, 2009: Conclusion of merger agreement
February 27, 2009 (Scheduled): Meeting of Shareholders (BANDAI NETWORKS)
April 1, 2009 (Scheduled): Effective date of merger
b. Company split where BANDAI NETWORKS is the splitting company in an absorption-type split and theCompany is the successor company in an absorption-type split.
January 28, 2009: Approval of split agreement by Board of Directors (the Company)
January 28, 2009: Conclusion of split agreement
April 1, 2009 (Scheduled): Effective date of split

2. Outline of accounting treatment used
Accounting treatment on non-consolidated financial statements and consolidated financial statements shall follow
the provisions of “Accounting for Transactions Conducted by Commonly Controlled Entities, etc.” of Part 3, Section 4of the “Accounting Standards for Business Combinations.”(Investment in game software sales company in Europe)
The Company, at the Board of Directors meeting held on January 28, 2009, passed a resolution for NAMCO BANDAI
Games Europe S.A.S. (hereinafter “NAMCO BANDAI Games Europe”), a wholly-owned subsidiary of the Company, toinvest in a game software sales company established in Europe by Atari Europe S.A.S. (hereinafter “Atari Europe”), a
subsidiary of Infogrames Entertainment S.A. (hereinafter “Infogrames Entertainment”).
In accompaniment with this resolution, NAMCO BANDAI Games Europe concluded a share purchase agreement with
Atari Europe on February 2, 2009.

1. Purpose of investment
The Group aims to strengthen its overseas operations as one of its medium to long-term business strategies. Up until
now, the Group has been outsourcing game software sales in Europe to outside partners on the basis of individual titles
and, through this investment, aims to bolster its game content operations in Europe by developing a marketing network
for Europe, in which it is involved. The Group sees this investment as part of its efforts to reinforce overseas operations
based on its next Mid-term Business Plan, which starts in April 2009.

2. Outline of investment
NAMCO BANDAI Games Europe, a wholly-owned subsidiary of the Company, will invest in a company establishedwith the spin off of Atari Europe’s European sales division at a share of 34%. Moreover, the agreement includes the- 21 -

option clause that enables this company to become our wholly-owned subsidiary in the future.

(1) Amount of investment
Approx. 27 million euros(2) Outline of new company to invest in
Name: Distribution Partners S.A.S.
Major business activities: Distribution and sales of electronic products, particularly products for PCs and game
consolesHead office: Lyon, France
Representative: Patrick Staar, Chairman & President
Capital: 37,000 euros(3) Schedule of investment
December 23, 2008: Establishment of new company
February 2, 2009: Conclusion of share purchase agreement
End of February 2009 (Scheduled): Investment(4) Details of options included in the agreement
Rights holder
Atari Europe S.A.S.

Exercise period

DetailFebruary 2, 2009 to June 30,

Option enabling Atari Europe to2012sell its 66% equity stake to
NAMCO BANDAI Games
Europe

NAMCO BANDAI Games

June 30, 2012 to June 30, 2013

Europe S.A.S.

Option enabling NAMCO
BANDAI Games Europe topurchase the remaining 66%
equity stake from Atari Europe

Note: If the option to make the company a wholly-owned subsidiary were to be exercised, the projected
price of acquisition is between 40 million euros to 126 million euros (approx.).

(5) Outline of subsidiary NAMCO BANDAI Games Europe
Name: NAMCO BANDAI Games Europe S.A.S.
Major business activities: Sales and marketing of game software
Head office: Cergy, France
Representative: Shusuke Takahara(6) Outline of capital tie-up partner (Infogrames Entertainment)
Name: Infogrames Entertainment S.A.
Major business activities: Holding company of the Atari Group- 22 -

Head office: Lyon, France
Representative: David Gardner(7) Outline of capital tie-up partner (Atari Europe)
Name: Atari Europe S.A.S.
Major business activities: Development and sales of video games
Head office: Lyon, France
Representative: David Gardner

3. Other
The impact that this investment will have on the Company’s consolidated financial results for the current fiscal year
will be minimal.

(Tender Offer to purchase shares of D3 INC.)
The Company, and NAMCO BANDAI Games, wholly-owned subsidiary of the Company, at their respective Board of
Directors meetings held on February 12, 2009, passed the resolution to acquire, by tender offer, all common shares andstock subscription rights issued by D3 INC. The details of this resolution are as follows.

1. Purpose of Tender Offer
A key theme of the Group’s next Mid-term Business Plan, which starts in April 2009, is three years of laying down
the foundation for growth in global markets. An important growth field that the plan identifies is the home video gamesoftware business, which is mainly being developed by NAMCO BANDAI Games. The key objectives for the home
video game software business are medium- to long-term growth in the U.S. and Europe, and the consolidation of a firmuser base in Japan. In order to achieve the objectives of the new Mid-term Business Plan, the Group is planning tostrengthen the creation and development of new content not only in the home video game software business, but also
through collaboration with the mobile content business.
D3 INC. operates in both the home video game software business and the mobile content business. It aims to cover awhole range of features held in the different types of home video game consoles and mobile phone handsets, and it
provides a wide selection in a broad range of products and services catering to the diverse preferences of all users fromlight users to core game users. While raising the satisfaction levels of existing game users, it is advancing themulti-development and global development of content by focusing on the creation of synergy between businesses inorder to discover and capture potential game users.
Presently in the game content market, in Japan, despite a trend of decline, there is a trend of rising popularity towards
casual games that can be enjoyed as a light pastime, and game content that can be enjoyed by families, while in the U.S.
and Europe, the market is expected to continue to expand. In addition, in the network-related market such as mobile
content distribution we are seeing a technological revolution and diversification of network content and services, and as aresult, the Group is squarely facing fierce competition due to the significant changes in the business environment and anincreased number of competing companies.
In such an environment, in order for the Group to win through in this time of extreme environmental changes andfurther strengthen our global presence, we came to the conclusion that NAMCO BANDAI Games and D3 INC. should- 23 -

operate as one group, achieving business expansion through unified and superior content development. Therefore,
NAMCO BANDAI Games has decided to execute this tender offer (hereinafter “Tender Offer”) with the intention of
making D3 INC. (hereinafter “the Target”), its wholly-owned subsidiary.

2. Outline of Tender Offer(1) Outline of the Target
Name: D3 INC.
Major business activities: Holding and supplying game content deployed world-wide; formulating and integrating
management strategy on a group level; risk control; shared services between administrative divisions; investor andpublic relations
Date of establishment: February 5, 1992
Head office: 1-9-5 Dogenzaka, Shibuya-ku, Tokyo
Capital: 1,737 million yen
Representative: Yuji Ito, President and Representative Director
Issued shares: 21,037 shares(2) Class of shares and bid price of Tender Offer
Common shares: 62,000 yen per share
Stock subscription rights: 1 yen per right(3) Period of Tender Offer
From February 13, 2009 to March 16, 2009 (22 trading days)(4) Number of shares etc. planned for purchase by Tender Offer
Maximum number for purchase by Tender Offer to be translated into shares: Not specified
Minimum number for purchase by Tender Offer to be translated into shares: 15,731 common shares(5) Change in number of shares held by Tender Offer
Number of shares held before Tender Offer: 0 shares
Number of shares held after Tender Offer: 15,731 shares or more

(6) Public noticedate of start of Tender Offer

February 13, 2009(7) Tender Offer starting agent
Daiwa Securities SMBC Co. Ltd.
Daiwa Securities Co. Ltd. (sub-agent)(8) Existence of any agreement by the Target concerning Tender Offer
NAMCO BANDAI Games has reached agreement with the Target’s parent company, Fields Corporation concerning- 24 -

the Tender Offer. Fields Corporation will apply to the Tender Offer with regard to all the Target’s shares held by Fields
Corporation (12,000 shares, which is a shareholding ratio of all issued shares [hereinafter “shareholding ratio”] of
57.04%). In addition, NAMCO BANDAI Games has reached agreement with other shareholders of the Target
concerning the Tender Offer. Yuji Ito, shareholder and president and Representative Directoe of the Target (3,600 shares,
17.11% shareholding ratio), Masaki Kojima, shareholder and director of the Target (24 shares, 0.11% shareholding
ratio), Shigehiro Aoki, shareholder and outside corporate auditor of the Target (27 shares, 0.13% shareholding ratio),and Mitsuhiro Kanamoto, shareholder and outside corporate auditor of the Target (20 shares, 0.10% shareholding ratio)
have all agreed to apply to the Tender Offer with regard to all the Target’s shares that they hold. Also, NAMCO
BANDAI Games has reached agreement with the Company, its parent company, concerning the Tender Offer. The
Company will apply to the Tender Offer with regard to all the Target’s shares held by the Company (60 shares, 0.29%
shareholding ratio).
Furthermore, a resolution has been made at a Board of Directors meeting of the Target to endorse the Tender Offer.

(9) Funds required for Tender Offer
975 million yen(the above is the bid price per share multiplied by the minimum number of shares targeted by Tender Offer (15,731
common shares))(10) Source of funds for Tender Offer
Appropriation of funds on hand(11) Othera. Schedule following the Tender Offer (concerning the so-called “two step purchase”)
NAMCO BANDAI Games is planning to make the Target a wholly-owned subsidiary by the method described
below if it fails to acquire all the issued shares of the Target in the Tender Offer (excluding treasury stock).
In terms of practical action, after the formation of this Tender Offer, NAMCO BANDAI Games plans torequest the Target to: (i) hold a meeting of shareholders that will include the proposals to (1) change the Target’s
articles of incorporation to make it possible to issue shares in classes different to common shares to thereby makethe Target a company with class shares as prescribed in the Companies Act, (2) change the Target’s articles ofincorporation to make all common shares issued by the Target subject to class-wide call, and (3) issue the Target’s
shares of different class in exchange for the class-wide call of the Target’s common shares; and (ii) hold a classshareholders meeting for common share holders of the Target that will include the proposals to partially amend thearticles of incorporation concerning the matter described in (i) (2). Note that NAMCO BANDAI Games plans toendorse each of the above proposals at the above mentioned shareholders meeting and class shareholders meeting.
In the event that the above procedures are each executed, all common shares issued by the Target will beacquired by the Target due to the common shares becoming subject to a class-wide call and different class sharesof the Target, as a consideration of the aforesaid acquisition of common shares, will be issued to the Target’s
shareholders, but shareholders who are entitled, in accordance with the processes of applicable laws andregulations, to fractions less than one share in the aforesaid issuance of the Target’s shares, will be issued cash
acquired from the sale of a quantity of the Target’s shares corresponding to the aggregate of the aforesaid fractions- 25 -

of one share (the total will be in units of a share with fractions less than a share omitted). Note the amount of cash
delivered to the aforesaid shareholders, which will be proceeds from the sale of the Target’s shares of a quantity
corresponding to the aggregate of fractional shares, is planned to be calculated using the bid price of the Tender
Offer as the standard price. Moreover, the class and number of the Target’s shares delivered as a consideration of
the aforesaid acquisition value of the common shares have not been determined as of the submission of thisdocument but in order for the Target to become a wholly-owned subsidiary of NAMCO BANDAI Games, it isplanned to make a decision to the effect that the number of Target’s shares that must be delivered to the Target’s
shareholders who did not apply to the Tender Offer is a fraction less than one share. In the event that the articles ofincorporation are changed to make the common shares subject to a class-wide call as described in (i) (2) above, (a)the shareholder holds the right to demand the Target to buy the shares held by the shareholder pursuant to theprovisions of the Articles 116 and 117 in the Companies Act, and other related laws and regulations, provided toprotect the rights of minority shareholders, and (b) based on the same object of claim, when a resolution has been
passed at a shareholders meeting to make a class-wide call of all shares subject to a class-wide call, theshareholder can petition for a determination of the acquisition price of the aforesaid shares pursuant to theprovisions of the Article 172 of the Companies Act, and other related laws. The price per share at which the Target
purchases shares from shareholders and the price per share at which the Target acquires shares by the methods of(a) or (b), is in the end decided in a court of law, which means such prices may be different to the bid price of theTender Offer. It is each Target shareholder’s own responsibility to have an understanding of the necessary
procedures etc. and make judgment concerning the exercise of demands and petitions by these methods.
Note that it depends on circumstances such as interpretation of related laws and regulations by the authorities,
and circumstances following the Tender Offer such as the NAMCO BANDAI Games’ shareholding ratio in theTarget and the Target-share-ownership circumstances of the Target’s shareholders other than NAMCO BANDAI
Games but it is possible that other methods holding the equivalent effect will be implemented or time will be
required for implementation. Note that even if such events should occur, however, NAMCO BANDAI Games
plans to make the Target a wholly-owned subsidiary by ultimately delivering cash to the Target’s shareholders
other than NAMCO BANDAI Games.
Also, with regard to the subject stock subscription rights, if all stock subscription rights of items could not be
acquired upon completion of the Tender Offer, NAMCO BANDAI Games may request the Target to perform thenecessary procedures to extinguish the related stock subscription rights and the Target, responding to such request,
may carry out the necessary procedures to extinguish the related stock subscription rights.

b. Delisting of the Target’ shares
NAMCO BANDAI Games has not set a maximum with regard to the number of shares etc. to be purchased in
the Tender Offer. Depending on the results of the Tender Offer, the Target’s shares may, in accordance withdelisting standards of the JASDAQ Securities Exchange, be delisted according to prescribed procedures. Also,
even if the Target’s shares do not comply with the aforesaid standard, NAMCO BANDAI Games plans after thetermination of the Tender Offer to make the Target a wholly-owned subsidiary in accordance with “a. Schedulefollowing the Tender Offer (concerning the so-called “two step purchase”)” above, and in this event also, theTarget’s shares will be delisted. After the Target’s shares are delisted, those shares cannot be traded on the
JASDAQ Securities Exchange.
- 26 -

Reference
Quarterly Consolidated Financial Statements for the prior 3rd Quarter(1) （Summary）Quarterly Consolidated Statement of Income
Prior 3rd Quarter(Apr 1 to Dec 31, 2007)¥ millionI

Net sales

335,602

II

Cost of sales

215,272

Gross profit

120,330

Selling, general and administrative expenses

94,557

Operating income

25,772Non-operating income

3,012

1. Interest income

1,747

2. Dividend income

201

III

IV

4. Other non-operating income
V

1,063

Non-operating expenses

543

1. Interest expense132

2. Equity in losses of affiliated companies

222

3. Expenses related to rental assets

55

2. Other non-operating expenses

133

Recurring incomeVIVII

28,241

Extraordinary income

974

1. Gain on sale of investments in affiliated companies

298

2. Reversal of allowance for doubtful receivables

155

3. Reversal of accrued retirement and severance benefits478

4. Other extraordinary income

42

Extraordinary loss

1,167

1. Loss on disposal of fixed assets

485

2. Loss on impairment of fixed assets

81

3. Litigation settlement286

4. Loss on valuation of investment securities

224

4. Other extraordinary loss

89

Income before income taxes and minority interests

28,048

Income taxes

12,639Minority interests696

Net income

14,712- 27 -

(2) （Summary）Quarterly Consolidated Statement of Cash Flows
Prior 3rd Quarter(Apr 1 to Dec 31, 2007)¥ millionI

Cash Flows from Operating Activities
Income before income taxes and minority interests

28,048Depreciation and amortization

17,686

Loss on impairment of fixed assets

81

Amortization of goodwill

1,842

Increase (decrease) in allowance for doubtful receivables(1,383)

Interest and dividend income(1,948)Interest expense

132

Loss (gain) on sale of investment securities(288)

Decrease (increase) in trade receivables

3,700

Decrease (increase) in inventories(7,713)

Investment for amusement facilities and machines(7,032)

Increase (decrease) in trade payables

1,756

Increase (decrease) in accounts payable—other(6,793)Other(2,280)Subtotal

25,808Interest and dividends received

1,930Interest paid

(88)

Income taxes paid

(15,954)

Net cash provided by operating activities
II

11,694

Cash Flows from Investing Activities
Payments for deposit in time deposits(3,191)

Purchases of property, plant and equipment(8,338)Purchases of intangible assets(3,413)Purchases of investment securities(3,900)

Sales of investment securities

26

Acquisition of shares in consolidated subsidiaries, net ofcash acquired
Advances of loans receivable(15,446)(1,562)

Collection of loans receivable

1,324

Proceeds from collection of guarantee money deposited

1,791

Other

356

Net cash used in investing activities(32,354)- 28 -

Prior 3rd Quarter(Apr 1 to Dec 31, 2007)¥ million
III

Cash Flows from Financing Activities
Net increase (decrease) in short-term borrowings

15,271

Repayment of long-term debt

(1,633)Purchases of treasury stock(9,968)Dividends paid

(7,162)

Other

(387)

Net cash used in financing activities
IV(3,880)(98)

VEffect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents(24,639)

VI

Cash and cash equivalents at beginning of period

124,155

VII

Increase in cash and cash equivalents due to consolidationof additional subsidiaries
Cash and cash equivalents at end of period

VIII- 29 -

485
100,002(3) Segment Information[By industry segment]
Prior 3rd Quarter (April 1, 2007 to December 31, 2007)
Toys and Amusement
Hobby
Facility(¥ million)
Game
Content

Network

Visual andMusic
Content

Other

Elimination
Consolidated
andCorporate

Total

Net sales(1) To external customers

128,817

66,957

98,044

8,679

25,953

7,150

335,602–335,602(2) Intersegment transactions

3,037

288

6,464

277

685

7,890

18,644(18,644)–

Total

131,854

67,246

104,509

8,956

26,63915,041

354,247(18,644)335,602

Operating expenses

120,318

66,241

94,517

8,316

22,84914,215

326,459(16,629)

309,829

Operating income

11,536

1,004

9,992

639

3,789

825

27,787(2,015)25,772

Notes:
1. The industry segments used above are those used for internal management purposes.
2. Main products in each business segment:
Toys, candy toys, products for vending machines, cards, plastic models, apparel, sundries(1) Toys and Hobby:
and stationery
Amusement facility operations(2) Amusement Facility:
Home-use video game software, commercial-use video game machines and prizes for(3) Game Content:amusement arcade machines
Mobile content(4) Network:
Video products, visual software and on-demand video distribution(5) Visual and Music Content:
Transportation and storage of products, leases, real estate management, printing and(6) Other:development and sale of environmental devices[By geographic segment]
Prior 3rd Quarter (April 1, 2007 to December 31, 2007)
Japan(¥ million)

Americas

Europe

Asia

Total

Elimination andCorporate

Consolidated

Net sales(1) To external customers

259,462

34,13531,596

10,408335,602–335,602(2) Intersegment transactions

10,7991,367

617,002

29,175(29,175)–

Total

270,261

35,502

31,603

27,411

364,778(29,175)

335,602

Operating expenses

249,161

35,58826,931

25,281

336,962(27,132)

309,829

Operating income (loss)

21,099

(85)

4,672

2,129

27,816(2,043)25,772

Note:
Definition of geographic segments and main countries and regions in geographic segments(1) Foreign geographic segments are defined by geographic region, similarity of economic activities, and interrelation of businessactivities.
(2) The main countries and regions in each geographic segment are as follows:(i) Americas: United States and Canada(ii) Europe: France, United Kingdom and Spain(iii) Asia:
Hong Kong, Thailand and Korea- 30 -