NEWSLETTER December 2017 BANDAI NAMCO Mirai-Kenkyusho BANDAI NAMCO Holdings Inc. 5-37-8 Shiba, Minato-ku, Tokyo 108-0014 Management Interview with the President Being a Group That is Full of Personality and Fixated on Quality and Appeal to Provide Dreams, Fun and Inspiration around the World The BANDAI NAMCO Group announced consolidated operating results for the first half (April to September 2017) of FY2018.3. Net sales reached record highs for H1 performance, with operating profit also surpassing projections. BANDAI NAMCO Holdings’ President Mitsuaki Taguchi had the following to say about performance outlooks and activities of each SBU moving forward, as well as on progress regarding the next Mid-term Plan. How would you summarize the a new network service-related platform and in first half? opening new facilities, including VR facilities, Taguchi: As domestic and overseas network to increase. We will also conduct careful over- content continued to perform strongly, core sight of release schedules for home video game Mitsuaki Taguchi IP* products and services for the Toys and and visual packaged product titles to ensure President & Representative Director, Hobby, Network Entertainment, and Visual they correspond to environmental changes. BANDAI NAMCO Holdings Inc. and Music Production SBUs gained in popu- We plan to take another look at full-year larity. As such, net sales reached record highs projections when we begin to see results from What progress has been made for H1 at ¥308.8 billion and operating profit, the year-end sales season and indications of regarding the next Mid-term Plan? at ¥34.9 billion, outperformed projections made their effects. While bearing in mind the plan Taguchi: We are making steady progress in at the time first quarter performance results for the second half devised in August, each developing the next plan. Our mission is to were announced. business will work diligently on present oper- provide dreams, fun and inspiration to people Interim dividends were ¥12 per share. ations. At the same time, I would like to start around the world. The desire to deliver products Starting from our stable annual per share preparations in anticipation of the next Mid-term and services that meet the expectations of our dividend payment amount of ¥24, we will Plan, aimed at achieving sustainable growth. fans worldwide remains unchanged moving further examine year-end dividends based on forward. From here on out, as in the past, we our fundamental policy for shareholder returns, Can you talk about establishing are not only aiming for business expansion, which aims for a consolidated dividend payout companies in China? but are completely fixated on quality and appeal ratio of 30%. Taguchi: The next Mid-term Plan calls for in our products and services and strive to be a increased business development in China. As Group full of personality. To that end, we will Could you describe the full-year such, we will be establishing the holding com- strengthen our IP axis strategy as well as outlook for FY2018.3? pany—BANDAI NAMCO Holdings CHINA accelerate global development through collab- Taguchi: We have not revised the full-year CO., LTD.—in Shanghai in December. This orative efforts between BANDAI NAMCO outlook. Because the year-end sales season has business will be the head of Group holding Group companies. What I would like to promote not yet begun and market conditions are chang- companies on the Chinese mainland, while our is additional creation of new IP and further ing more dramatically, I believe we must keep holding company in Hong Kong will head the strengthening of our IP axis strategy, in par- a cautious eye on the financial outlook. More- companies in the rest of Asia. In addition, we ticular. I want this Group to be one that drives over, in comparison to when financial results have established holding companies in the IP creation and is capable of continuing to for the first quarter were announced in August, Americas as well as the UK and other European produce and nurture IP. we have also been seeing changes on the countries. These holding companies will aim to business side. We expect prior investment costs both strengthen governance and bolster busi- associated with intensifying advertising for ness support and cooperation in those regions. network contents and those incurred in launching *IP: Intellectual property, such as characters December 2017 1 Management Interview with the President Performance of network contents continues to including DRAGON BALL Z DOKKAN BATTLE Rather than simply “responding” to the and ONE PIECE Treasure Cruise, which are be strong being rolled out worldwide; NARUTO, which changes of the times, we aim to “adapt” and Plans for the repeated introduction of is popular in China; and IDOLM@STER, which take on new challenges is in high demand in Japan, are gaining a stable high-profile home video game titles base of popularity. In addition to maintaining the popularity of our current titles through How is the amusement business popular. In addition, an animated TV program How is the Toys and Hobby SBU In addition, as a challenge with a focus on detailed measures and meticulous management performing? based on our original IP, IDOLiSH7 , which performing? the future, we exhibited our communication that make use of data analysis, we are also Taguchi: The large-scale VR facility we opened generated from BANDAI NAMCO Online Taguchi: THE GUNDAM BASE TOKYO, a robot, Guncierge Haro, which represents a focusing on cultivating new titles. We are also in Shinjuku, Tokyo in July—VR ZONE Inc.’s game app, will begin in January. The complex with the world’s largest selection of Groupwide project that utilizes AI, at a trade- planning to introduce new titles for NARUTO SHINJUKU—is performing well, which rein- boy band that appears in this title— TRIGGER— Gundam plastic models, was opened in Diver show. This project garnered a significant amount x BORUTO: NINJA BORUTAGE and SWORD forces my conviction that VR and IP are highly is already gaining attention, with its debut City Tokyo Plaza in Odaiba, Japan, in August of attention at the show. I would like to see ART ONLINE, which are marketed worldwide, compatible. We are gradually introducing new album, REGALITY, reaching number one and has since drawn many visitors. A life-sized the Toys and Hobby SBU experiment with and are working on contents such as Project activities to ensure that this flagship store is a on the Oricon weekly albums chart for music Unicorn Gundam statue was unveiled in Sep- combining such cutting-edge technology with LayereD, user-generated content which began place where people can enjoy themselves no CDs. Moving forward, we will develop products tember, also attracting a large amount of atten- IP. as an effort to create new IP from game apps. matter when they choose to visit. While we and more to make this IP more appealing. tion. The statue and facility each work together Beyond that, BXD Inc., established through a already have small-to-medium portal stores in Moreover, Actas Inc., which produces to multiply visitors to the other, which has What is the approach to Europe and joint investment by BANDAI NAMCO cities such as Kobe, Japan and London, UK, GIRLS und PANZER among other titles, joined stimulated more interest in Gundam plastic the Americas markets? Entertainment Inc. and Drecom Co., Ltd., will we plan to open a total of 20 stores in Japan BANDAI NAMCO Group. This will enable models. Gundam plastic models have also been Taguchi: In Europe and the Americas, in addition begin distributing online games and managing and overseas. us to strengthen our IP axis strategy. In this performing well in the rest of Asia, with a to Power Rangers products and services, we new platforms next spring. BXD’s work will In addition, NAMCO LIMITED opened way, the Group has grown by one more ani- large-scale Gundam event being held from launched a card game for DRAGON BALL, an combine the digital and the real in a charac- Asobi Park PLUS in Hong Kong as its first mation studio with personality. Together, we October to November in Taiwan. Moving IP which app for smartphones is popular, in teristically BANDAI NAMCO way, and we international development project. We have will focus on creating titles that satisfy our forward, we will ramp up events, video distri- North America in July. Card game sales are look forward to what they will accomplish. garnered praise for development projects uti- fans and making high quality IP and high bution, and store promotions to invigorate showing a good start in the region. The second lizing our IP as well as our fusion of VR and quality products. interest in Gundam plastic models across Asia. round of launches will begin in November, What about home video games? AR (augmented reality) overseas, which led In new IP, the initial response to the trans- with large-scale events planned in locations Taguchi: At the Tokyo Game Show 2017, held to our opening this store. Moving forward, we How is the outlook moving forward? formation belt from Kamen Rider Build, which all over the United States next year. in September, we displayed DRAGON BALL will actively continue to open stores in prom- Taguchi: Digitalization is continuing in all began broadcasting in September, has been the Demand for products for adult customers, FighterZ, SWORD ART ONLINE: FATAL ising locations both in and outside Japan. fields, leaving the market experiencing signif- highest in Heisei Kamen Rider history and is such as collectable action figures is increasing BULLET, CODE VEIN, and other titles set to icant changes. Because “responding” to such performing well.