NEWSLETTER September 2018 BANDAI NAMCO Holdings Inc. BANDAI NAMCO Mirai-Kenkyusho 5-37-8 Shiba, Minato-ku, Tokyo 108-0014 Mitsuaki Taguchi Interview with the President President & Representative Director, BANDAI NAMCO Holdings Inc. Continuing to innovate with a focus on global business initiatives aligned with changes in our markets Under the Mid-term Plan, the Group announced a mid-term vision of CHANGE for the NEXT — Empower, Gain Momentum, and Accelerate Evolution, and launched a five-Unit system. In the first quarter, the Group achieved record-high sales. In these ways, the Mid-term Plan has gotten off to a favorable start. In this issue of the newsletter, BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the future results forecast and the situation with each of the Group’s Units. How were the results in the first What is the outlook for the future? for the mature fan base, BANDAI SPIRITS quarter? Taguchi: In our industry, the environment is CO., LTD., a new company that consolidates Taguchi: In the first quarter of FY2019.3, in undergoing drastic changes, and it is difficult the mature fan base business of the Toys and comparison with the same period of the previous to forecast all of the future trends based on Hobby Unit, started full­scale operation. With year, each business recorded favorable overall three months of results. Considering bolstered a separate organizational structure and a clarified progress with core IP* and products/services, marketing and promotion for businesses mission, the sense of speed in this business despite differences in the home video game recording favorable results; recent business has increased. In Europe and the Americas, title portfolio in the Network Entertainment trends, such as changes in title launch timing; DRAGON BALL SUPER CARD GAME, a trad­ business. In particular, the Toys and Hobby and future products and service lineups, there ing card game that was launched to strengthen business and the Visual and Music Production are no changes to the forecasts that we an­ our initiatives in business for the mature fan business recorded higher sales and profits year nounced in May — sales of ¥306.0 billion base, has recorded growing popularity, and in on year, and overall the Group registered sales and operating profit of ¥29.0 billion in the August we held a nationwide tournament in of ¥150.8 billion and operating profit of ¥17.8 first half of the fiscal year and sales of ¥650.0 the U.S. In addition to Europe and North billion. Thanks to the efforts of our employees billion and operating profit of ¥60.0 billion America, we are expanding the region where to ensure that the new Mid­term Plan gets off for the full fiscal year. As I mentioned, core this product is sold to include South America, to a smooth start, in the first quarter we achieved IP products/services are recording favorable Asia, Oceania, etc., and moving forward will record­high sales. results, and we view these figures as goals step up initiatives for this game as a focus Looking at the two business that achieved that we must achieve. I would like to respond product in overseas markets. higher sales and profits year on year, the Toys to the expectations of stakeholders and aim Furthermore, we have begun to implement and Hobby business strengthened its roll­outs to reach even higher. initiatives targeting a full­blown entry to the of products for the mature fan base as a main mainland China market. We are moving forward strategy under the Mid­term Plan. In Japan and Would you discuss the trends in with preparations for the establishment of overseas, favorable results were recorded by each business? company to handle the local Toys and Hobby products for the mature fan base, such as Taguchi: In the Toys and Hobby business, business, and we are already taking steps to Gundam plastic models, collectable figures, broadcasts of KAMEN RIDER ZI-O, the new increase sales of Ultraman toys and Gundam and a lottery­related product. Also, in Japan KAMEN RIDER, started in Japan in September. plastic models, which are highly popular. As established IP, such as DRAGON BALL, KAMEN This is a compilation of Heisei KAMEN RIDER a new initiative for Gundam plastic models, RIDER, and PRETTY CURE!, was also popular. series, and accordingly we will implement a in August we opened THE GUNDAM BASE In the Visual and Music Production business, product roll­out featuring this product for the SHANGHAI, our flagship facility in Shanghai. core IP, such as Love Live! Sunshine!! and THE busy year­end sales period. In addition, we Moving forward, this facility will be a base IDOLM@STER, contributed to favorable sales continue to launch new IP, such as Bakutsuri for the communication of information about of such products as visual and music packaged Bar Hunter, for boys, and the new Cocotama Gundam plastic models to local fans. products, live events, and related goods, which series, for girls. offered a variety of added value. Moreover, to expand our business in products *IP: Characters and other intellectual property September 2018 1 Interview with the President Each Unit is advancing initiatives the establishment of “venues” at which con­ What is the status of the new Gundam has made well­received guest appear­ sumers can experience fun that leverages the IP Creation Unit? ances in Pacific Rim: Uprising, a film released aligned with the main strategies in distinctive capabilities of BANDAI NAMCO. Taguchi: In regard to IP creation, Group com­ this year and produced by Legendary, and in the Mid-term Plan. These include VS PARK, a variety sports facility panies and partner companies are working Ready Player One, which was directed by that was opened in Osaka and has become together to create new IP. At the same time, Steven Spielberg. We are also advancing these What is the situation in the Network What are the trends in home video popular. As we move forward we will continue we are also taking steps to increase the recog­ types of initiatives to leverage the appeal of Entertainment business? games? to open “venues” that draw on our distinctive nition of existing IP. Recently, at the Anime IP brands around the world for Cowboy Bebop. Taguchi: In network content, the eagerly awaited Taguchi: Home video games are registering strengths, such as opening a VR ZONE flagship Expo in the U.S., which is one of the largest If we succeed in linking these initiatives to new title DRAGON BALL Legends made a favorable results, centered on overseas markets. facility in Osaka and the No. 2 TONDEMI, a animation events in North America, we increases in IP recognition and value and to smooth start, surpassing 10 million downloads Going forward, we will launch worldwide popular new format. announced that we would cooperate with the establishment of a foundation for the roll­ in the first month. Also, stable popularity was titles, such as SOULCALIBUR VI and NARUTO In amusement machines, in the previous Legendary, a film company, in the joint devel­ out of Group products, then we will also maintained by existing core titles in Japan and TO BORUTO: Shinobi Striker. Furthermore, year our initiatives were centered on the devel­ opment of a live­action Mobile Suit Gundam implement similar initiatives for other IP in overseas, such as titles in the DRAGON BALL in the first quarter we continued to record opment of VR­related equipment, but in film. This news drew considerable attention. the future. Z DOKKAN BATTLE, ONE PIECE Treasure favorable sales of DARK SOULS series products FY2019.3 we will launch new products in Cruise, and THE IDOLM@STER series. For and DRAGON BALL FighterZ products, espe­ popular series, such as Mobile Suit Gundam: Having a sense of pride and responsibility existing titles, we are using data analysis and cially in Europe and the Americas. As with Extreme Vs. and Wangan Midnight. In this way, devoting resources to marketing and operations network content, we will implement ongoing we will leverage synergies with facilities. about working in entertainment activities aligned with the characteristics of communications initiatives and promotional In Visual and Music Production, IDOLiSH7, fans in each region in order to ensure that events to ensure that these also become long­ an IP that originated from network content, Product roll-out initiatives targeting How was the General Meeting of also increase the speed with which we address consumers can enjoy them for longer periods lived products. In addition, e­sports has become has generated not only a popular game but also overseas fans are also being stepped up Shareholders? services and experiences that utilize new tech­ of time. For newly launched titles, we will a topic of conversation as a new type of com­ successful coordinated roll­outs of video prod­ for DRAGON BALL. Taguchi: At the General Meeting of Shareholders nologies and devices. Moving forward, the conduct planning and development with an petition that utilizes games. In e­sports, we ucts, music, and live events. Accordingly, it Taguchi: We participated as a Group in the held in June, we received a range of opinions BANDAI NAMCO Group will continue to enhanced focus on quality and work to meet will aggressively implement initiatives for has attracted further attention among young DRAGON BALL NORTH AMERICA TOUR. and questions, and I think that we were able take on the challenges of products, services, the expectations of fans. tournaments using such products as TEKKEN7 women, and we recently decided to produce This event, which enabled consumers to expe­ to communicate with our shareholders. At the and businesses that are aligned with the times.