NEWSLETTER March 2020 BANDAI NAMCO Holdings Inc. BANDAI NAMCO Mirai-Kenkyusho 5-37-8 Shiba, Minato-ku, Tokyo 108-0014 Interview with the President The future of BANDAI NAMCO lies beyond change. BANDAI NAMCO Holdings has announced its results for the first nine months of FY2020.3 (April to December, 2019) in February. In this issue of the newsletter, BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the results for the Group and the trends in each business. Would you provide an overview of basis. Currently, DRAGON BALL Z KAKAROT, the results for the first nine months which was launched in January, has been highly of FY2020.3? evaluated by fans and shipments surpassed Taguchi: For the nine-month period, we 1.5 million units in the first week of sales. We achieved net sales of ¥532.5 billion and oper- are aiming for shipments of 2.0 million units ating profit of ¥72.0 billion. This marks the within FY2020.3. Moving forward, we will Mitsuaki Taguchi President & Representative Director, achievement of record high sales and profits continue to focus on high-quality development BANDAI NAMCO Holdings Inc. for the first nine months of a fiscal year. in network content and home video games. In the Toys and Hobby business, we had the mix in the same period of the previous year, favorable results worldwide with products for Would you discuss the situation in when we launched multiple, high-value-added the mature fan base, such as Gundam plastic the Real Entertainment, Visual packaged titles. Currently, we are moving ahead models and DRAGON BALL figures. Overseas, and Music Production, and IP Creation with the planning of multiple IPs from new products for the mature fan base were popular, businesses in the third quarter? viewpoints, and accordingly we would like including not only Asia but also North America, Taguchi: In Real Entertainment, existing amuse- everyone to look forward with anticipation. where we have established sales and marketing ment facilities in Japan recorded favorable In the IP Creation business, we worked to companies. In products for younger customers, sales. Furthermore, we advanced the roll-outs create IP-related buzz around the world. To established-IP* toys and toy-related items, of new-format facilities that leverage the dis- that end, we took steps to build excitement in such as KAMEN RIDER and Super Sentai, tinctive strengths of BANDAI NAMCO, such a variety of ways, including visual products were popular in Japan. As a result, the Toys as opening new TONDEMI athletic facilities. for the Mobile Suit Gundam series, which and Hobby business achieved record high results In amusement machines, sales were down reached its 40th anniversary. These products in the first nine months of the fiscal year. from the same period of the previous fiscal were released in theaters and on TV. The results The Network Entertainment business reg- year, when we launched major titles and intro- in the licensing business were down in com- istered stable results with mainstay network duced new versions of existing games. parison with the same period of the previous content titles, including DRAGON BALL, ONE The Visual and Music Production business year, when favorable results were recorded. PIECE, and THE IDOLM@STER, as a result worked to create buzz through IP production However, influence on profits was limited due of events, updates, and other initiatives. In initiatives extending to visual, music and live to a change in the transaction configuration. addition, we are also seeing progress with events. These initiatives included sales of visual Looking at the Love Live! series, which is one new titles, such as GUNDAM BREAKER and music packaged products and live events of a mainstay IPs, we have decided to produce MOBILE and Sword Art Online: Alicization for THE IDOLM@STER, Love Live! Sunshine!!, new animations and to roll out new projects. Braiding, which were introduced in FY2020.3. and IDOLiSH7 as well as the release of a new In these ways, we will work to create further In home video games, repeat sales of existing GIRLS und PANZER movie. Profits were influ- excitement about this IP. titles were up year on year on a unit sales enced by a product mix that was different from * IP: Characters and other intellectual property In regard to the recent spread of the novel coronavirus, we would like to express our sympathy for those who have contracted this illness or have had their lives affected by this crisis. In consideration of these circumstances, the BANDAI NAMCO Group is doing everything it can in such areas as business operations and employee work systems. Please note that this newsletter includes information as of the end of February 2020. Thank you for your understanding. We would like to offer our prayers for the early recovery of those who have contracted this illness and for the end of this crisis. March 2020 1 (Information in this section is as of the end of February 2020.) Interview with the President Striving to create a world in which fans around The Group is stepping up Gundam- The Group has announced personnel What are the Group’s goals related activities. changes at the director level. for FY2021.3? the world transcend borders to create Taguchi: Mobile Suit Gundam reached its 40th Taguchi: On April 1, Masaru Kawaguchi, the Taguchi: The changes generated directly and connections through IP anniversary in 2019, and 2020 will mark the president of BANDAI CO., LTD., will become indirectly by digitalization are altering the 40th anniversary of Gundam plastic models. Executive Vice President and Director of structure of our industry and our markets. In The full-year forecasts for FY2020.3 4 will be launched in the fourth quarter. ONE Accordingly, we will continue to create buzz BANDAI NAMCO Holdings Inc. The objective response, we have selected CHANGE as the have been revised. PIECE Pirate Warriors 4 is scheduled for about this IP in a variety of ways. For the 40th of this move is to deepen collaboration between theme of our Mid-term Plan. This choice was Taguchi: We reevaluated the full-year forecasts launch in late March, and accordingly the costs anniversary of Gundam plastic models, we management and business execution and to based on belief that that the Group will have for FY2020.3, with consideration for our results will be recorded upfront in FY2020.3. Also, will implement cooperative initiatives with further solidify our management foundation. no future if we simply continue to follow our in the first nine months of the fiscal year, our due to the title mix and characteristics in the other companies, such as our collaborative Moving forward, the Group will strive to work previous ways of doing things. The speed of marketing plans for products and services in fourth quarter, we expect repeat-title unit sales products with J.LEAGUE, and launch strategic together and leverage our comprehensive change in the current age means that we cannot the fourth quarter, and a variety of initiatives and the download sales ratio to decline year products. Furthermore, to prepare for future strengths under the ALL BANDAI NAMCO afford to stand still. If we move too slowly, that we will implement, including investment on year. FY2020.3 was a period immediately growth in demand, we will also take steps in concept. To that end, it will be necessary for or simply take a passive approach, then it is for business development, in FY2021.3 and preceding the launch of home video game the area of production, such as expanding our Group companies to work in a more-unified possible that the value that we have created thereafter. Consequently, we did not change titles. In FY2021.3 we plan to launch THE manufacturing base in Shizuoka City in Japan. manner, to collaborate, and to foster chemical up to this point will be entirely lost. In the address customer needs and endeavor to pursue the forecast for net sales of ¥720.0 billion, IDOLM@STER STARLIT SEASON, SWORD Currently, Gundam enjoys a high level of change. In these endeavors, businesses involv- midst of this change, we must accurately the true nature of those needs. The continued but the forecast for operating profit was ART ONLINE Alicization Lycoris, Mobile popularity in Asia, including Japan. Moving ing tangible goods will be one of our core understand how customers feel about our existence of the BANDAI NAMCO Group revised from ¥70.0 billion to ¥75.0 billion. Suit Gundam: Extreme Vs. Maxi Boost On, forward, we will strive to develop this IP into operational areas. Mr. Kawaguchi, while con- products and services and carefully determine rests on our ability to provide products and In the fourth quarter, we expect results to and other titles. Moreover, although the launch “the world’s Gundam.” In particular, to increase currently working as the president of BANDAI our next steps. services that are irreplaceable, for IP and for be down year on year. The major reasons date has yet to be determined, we are moving awareness overseas, we will step up events, CO., LTD., will serve as the vice president of On the front lines, near our customers, we customers. I believe that the future of BANDAI include the following. In the Toys and Hobby forward with the development of ELDEN strengthen product and promotion roll-outs, BANDAI NAMCO Holdings Inc., and strive must strive to accurately understand customer NAMCO lies beyond change. Moving forward, business, we are planning e-commerce site RING, which is highly anticipated by fans. and implement a variety of other initiatives. to advance integration and collaboration from trends and thinking.