Taking on a Range of Challenges, Including Investing to Achieve
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NEWS LETTER December 2016 BANDAI NAMCO Mirai-Kenkyusho BANDAI NAMCO Holdings Inc. 5-37-8 Shiba, Minato-ku, Tokyo 108-0014 Management Interview with the President Taking On a Range of Challenges, Including Investing to Achieve Sustained Growth and Expand Corporate Value We have passed the half-way point of the Mid-term Plan ending FY2018.3. BANDAI NAMCO Holdings’ consolidated results in the first half of FY2017.3 recorded favorable progress. For example, we reached new record highs in both sales and profits. In this issue of the newsletter, BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the progress with the Mid-term Plan and the situation with each of the Group’s businesses. Would you provide an overview of NAMCO Group. In the second half of the the first half of the fiscal year? fiscal year, we will continue striving to achieve Mitsuaki Taguchi Taguchi: In August 2016, we made an upward our projections while taking on the challenge President & Representative Director, revision to the results forecast for the first half of implementing a variety of initiatives, includ- BANDAI NAMCO Holdings Inc. of the fiscal year. We ended up surpassing the ing investment for sustained growth. revised figures and achieved record highs for to achieve our objectives for the final year of both sales and profits. In the Toys and Hobby The Mid-term Plan is making the plan — net sales of ¥600.0 billion and Business, favorable results were recorded by favorable progress. operating income of ¥60.0 billion. In addition, established IP* products in each region, such Taguchi: The goals of the Mid-term Plan com- these objectives do not represent a one-time as Mobile Suit Gundam in Asia and Japan and prise further strengthening the IP axis strate- achievement of a certain level of performance. Power Rangers in Europe and the Americas. gy and expanding our overseas business. We We must approach them as a transit point on In general, results were in line with initial are already starting to see results from our the way to sustained growth in the future. plans. Also, in the Network Entertainment initiatives, and we will further reinforce these Accordingly, we will take on the challenge of Business, DARK SOULS III home video game trends. In this way, our first task will be to implementing initiatives to further strengthen software became a major hit, and smartphone build a platform that can generate net sales of our foundation. game applications for domestic and overseas ¥500.0 billion and operating income of ¥50.0 markets, such as DRAGON BALL Z DOKKAN billion in a stable manner. We will then aim What steps are being taken for the BATTLE, maintained high levels of popular- for the next stage. I think that there are still next Mid-term Plan? ity. The Network Entertainment Business many things that we need to do to achieve Taguchi: Specific details have not been final- provided a strong driving force that support- sustained growth. To resolve these issues, ized, but we recently started the formulation ed the Group’s overall results. In the Visual we need to step up innovation in order to process by discussing where we want the and Music Production business, favorable heighten the sustainability of businesses and Group to be in 10 years. We had an off-site performances were recorded by initiatives IP. We also need to strengthen strategic invest- meeting of all officers, including outside centered on popular IP, such as Love Live! ment in order to cultivate new initiatives. In directors and outside audit & supervisory series and GIRLS und PANZER. These IP are addition to typical investments, in FY2016.3 we board members, to determine the Group’s receiving strong support from both existing also implemented strategic investments, such long-term vision. At this meeting, we reem- fans and new fans. as acquiring commercialization rights for new phasized the need to bolster the IP axis strat- IP and making WiZ CO., LTD., a planning egy, which will remain our biggest strength The outlook for the full fiscal year and development company, a subsidiary. In in the years ahead. We also recognized that has been revised. FY2017.3, we are continuing to step up IP we will achieve growth by leveraging this Taguchi: Considering the results in the first half initiatives overseas and are starting to invest strength on a worldwide basis. Accordingly, of the fiscal year and the current situation in in such areas as strengthening relationships I believe that, rather than striving to finalize each business, we revised the full-year projec- with IP rights holders. things on our own, we need to think about the tions to ¥590.0 billion for net sales and ¥57.0 We have passed the half-way point of the Group’s growth while drawing on outside billion for operating income. These challenging Mid-term Plan, and our performance has been knowledge and capabilities through the for- projections represent record-high levels of net basically in line with the plan, including our mation of a wide range of partnerships. sales and operating income for the BANDAI financial results. However, it will not be easy * IP: Intellectual property, such as characters December 2016 1 Management Interview with the President Leveraging technical capabilities and rapidly offering localized transformation belts with varying specs and at different price ranges. In addressing new platforms these ways, we are implementing initiatives to deepen our ties with local markets. Would you discuss the circumstances What is the situation overseas? in the Toys and Hobby Business? Taguchi: For Power Rangers, which is a lead- What is the situation in the Network Taguchi: From the fall, new programs were ing IP in Europe and the Americas, there will Entertainment Business? launched for KAMEN RIDER Ex-Aid, Heybot!, be a nationwide movie launch in the United Taguchi: Currently, virtual reality (VR) and and Digimon Universe App Monsters. Of these, States in March. In advance of this opening, augmented reality (AR) are drawing attention. KAMEN RIDER Ex-Aid has drawn consider- a new TV series — Ninja Steel — will start. In conjunction with the recently introduced able attention. Children can easily adapt to its In conjunction with TV and movies, we will Play Station VR, we have launched SUMMER TV game motif, and its design leverages conduct a series of large-scale promotions, LESSON, which enables users to enjoy char- luminescent colors. This bold challenge has and we will work to build on these initiatives acters and communications, and The iDOLM@ been well received by children, and KAMEN to promote business in FY2018.3 and there- STER Cinderella Girls: Viewing Revolution, RIDER Ex-Aid products have made a strong after. For girls, the Miraculous action doll has which enables users to enjoy highly realistic start, even for products in the Heisei Riders become popular, and moving forward we will live performances. Both of these products have series. This will be a key product for the busy nurture it as new IP. In addition, in Europe been highly evaluated. In addition, we also plan year-end sales period. Repeated broadcasts and the Americas, we are working to step up to offer titles for Nintendo Switch, which is have been establishing the popularity and initiatives for figures and other collectable Nintendo’s new platform. One of our strengths recognition of Heybot! animations, which are products as well as for plastic models. As one is the ability to rapidly respond to the launch for elementary school boys, and of Digimon of those initiatives, this fall we commenced of new platforms because we are always in Universe App Monsters animations. Accordingly, sales of DRAGON BALL plastic models in contact with advanced new technologies. we will utilize products to carefully nurture conjunction with the launch of DRAGON Moving forward, we will continue to take on these IP. BALL XENOVERSE 2 game software and an challenges that leverage the technical capa- In addition, targeting the busy year-end overseas campaign for DRAGON BALL Z bilities of the BANDAI NAMCO Group. sales period, we will launch major products DOKKAN BATTLE game application. Moreover, in home video game software, in the Power Rangers and Ultraman series In Asia, Gundam plastic models continue as I mentioned, DARK SOULS III has become for boys and the Pretty Cure! and Himitsu no to record favorable results. We have started a major hit. In addition, DRAGONBALL Cocotama series for girls. Also, Tamagotchi the distribution for the second season of Mobile XENOVERSE, which launched in February reached its 20th anniversary, and we launched Suit Gundam: Iron-Blooded Orphans at the 2015, has recorded shipments of more than 4 an anniversary product, Tamagotchi m!x. same time in Japan and overseas, and we are million units. DRAGON BALL XENOVERSE Characters that appeared in the first-generation also holding events in locations throughout 2, the latest entry in the series, was launched Tamagotchi also make an appearance in the Asia. In these ways, we are implementing in October and initial shipments surpassed anniversary product. In this way, two gener- detailed marketing initiatives. Moreover, for 1.4 million units. We will continue to implement ations — parents and children — can enjoy KAMEN RIDER, in overseas markets we are online events and other initiatives to sustain playing Tamagotchi together. selling products that have the same specs as the popularity of DRAGON BALL XENOVERSE products in Japan. In addition, we are also 2 for an extended period of time. Focus Products in Each Business KAMEN RIDER Ex-Aid transformation belt is off to a good start. Worldwide, DRAGON BALL Z DOKKAN BATTLE has In visual packaged products, surpassed 100 million downloads.