NEWSLETTER March 2021 BANDAI NAMCO Holdings Inc. BANDAI NAMCO Mirai-Kenkyusho 5-37-8 Shiba, Minato-ku, Tokyo 108-0014 Interview with the President Going forward, the Group’s businesses will work together under the ALL BANDAI NAMCO concept and strongly advance the IP axis strategy around the world. BANDAI NAMCO Holdings Inc. has announced its results for the first nine months of FY2021.3 (April to December, 2020), as well as the Group’s new organizational structure from FY2022.3. In this issue of the newsletter, BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the Group’s FY2021.3 results, as well as the new Unit structure and officer system, which will take effect from FY2022.3 Mitsuaki Taguchi President & Representative Director, BANDAI NAMCO Holdings Inc. Would you provide an overview of previous users and new customers. Moreover, the results for the first nine months of in Japan, in addition to established IP, contri- unit sales of repeat titles for the nine-month FY2021.3? butions to results were also made by the rapid period reached 20.69 million units, compared Taguchi: For the nine-month period, we achieved commercialization of new IP*, such as Demon with 11.25 million units in the same period of net sales of ¥543.4 billion and operating profit Slayer: Kimetsu no Yaiba and Disney: Twist- the previous fiscal year. We were able to effec- of ¥72.9 billion. This marks the achievement ed-Wonderland. Favorable results were also tively meet demand associated with the trend of record high sales and profits for the first nine recorded in toy-related items, such as in the toward people staying at home. months of a fiscal year. confectionery category, where the Charapaki Moving forward, in both network content The Group has businesses that have been series became a hit. Products sold at amusement and home video games, we will continue to significantly affected by the spread of COVID- facilities were affected by the closure of facilities, focus on the high-quality titles that are supported 19, as seen with the closure of amusement especially in the first quarter, but nonetheless by customers and to maintain communications facilities and the cancellation of live events. the Toys and Hobby business overall achieved with customers through events and updates. On the other hand, we also have businesses that record-high results. We will also advance the development of major have benefited from demand associated with In the fourth quarter, we will launch new home video game titles, such as SCARLET people staying at home, such as products for series for established IP, such as Super Sentai NEXUS and Elden Ring, which we are planning the mature fan base in the Toys and Hobby and PRETTY CURE!, and will continue to address to launch in the future. In addition, we will business and home video games in the Network the mature fan base, where we have secured advance marketing measures and implement Entertainment business. In difficult circum- demand associated with the trend toward people future-focused investment, such as research stances, all of our employees have worked hard staying at home. In addition, we will strengthen into new technologies. to confront the unprecedented COVID-19 sit- measures to address digitalization in each region uation, to implement countermeasures on the and category. In these ways, we will work to What is the situation in the front lines to help prevent the spread of the implement initiatives that will foster growth in Real Entertainment business? infection, and to aggressively address the trend FY2022.3 and thereafter. Taguchi: In the Real Entertainment business, toward digitalization. amusement facilities around the world were What is the situation in the closed or had shortened operating hours due to Please discuss the situation in each Network Entertainment business? the spread of COVID-19, and this affected the business. First, what are the Taguchi: As a result of continued measures to amusement facility business as well as sales of circumstances in the address demand from customers around the amusement machines. Toys and Hobby business? world, the Network Entertainment Business Looking at game centers in Japan, the var- Taguchi: In the Toys and Hobby business, prod- registered favorable results with mainstay ious measures implemented from the first half ucts for the mature fan base, such as Gundam network content titles, including titles in the of the fiscal year are showing results. Going plastic models and collectible figures, were DRAGON BALL series and THE IDOLM@ forward, the COVID-19 environment is popular around the world. We responded rapidly STER series, and network content sales increased expected to remain challenging, and accord- to digitalization, and as a result we captured year on year. In home video games, there were ingly we will implement structural reforms demand from existing users, as well as from only a few new title launches, but nonetheless in the Real Entertainment business. * IP: Characters and other intellectual property March 2021 1 (Information in this section is as of the end of February 2021.) Interview with the President The Real Entertainment business will work to that we are planning for the fourth quarter, In the Entertainment Unit, BANDAI NAMCO axis strategy, we will aim to enhance our as well as the assumption that the spread of Entertainment Inc. will oversee the Digital presence in global markets. The IP Production build a strong foundation by collaborating with COVID-19 would continue around the world. Business, including network content, home Unit will consolidate the studio and produc- other Group businesses even more closely. Furthermore, in the Real Entertainment business, video games, etc., and BANDAI CO., LTD., tion functions and aim to step up the creation which is the most significantly affected by will oversee the Toys and Hobby business, such of a wide range of IP. The Amusement Unit Would you discuss the situation in the also having a positive knock-on effect on sales COVID-19, in the fourth quarter we will record as toys, plastic models, etc. These two companies will work to create a strong business foun- Visual and Music Production and IP of products, such as Gundam plastic models. an extraordinary loss of approximately ¥13.0 will work together to manage the overall Unit. dation for the next Mid-term Plan. Creation businesses? Moving forward, in addition to on-line billion for expenses associated with structural In the IP Production Unit, BANDAI Taguchi: The Visual and Music Production streaming and releases of visual products, we reforms. Specifically, this will include impair- NAMCO Arts Inc. will oversee the Visual Please discuss the director system business was also significantly affected by will continue to take steps to create buzz around ment losses on fixed assets in the facilities and Music Business, including visual and for BANDAI NAMCO Holdings Inc. the spread of COVID-19. Even in this setting, the world. These initiatives will include install- business around the world, as well as other music content, live entertainment, etc., and Taguchi: On April 1, Masaru Kawaguchi, we achieved a solid performance in sales of ing a life-size Freedom Gundam statue in losses. In addition to these accounting allow- SUNRISE INC. will oversee the Creation who is currently BANDAI NAMCO Holdings’ music CDs, but results were affected by such Shanghai, China; having Gundam serve as ances, we are also working to reduce fixed Business, such as animation production, etc. Executive Vice President and Director, will factors as the cancellation and delay of live ambassador of the Japan Pavilion at the Dubai expenses and increase operational efficiency. These two companies will work together to become the Company’s President and Rep- events and the postponement of launches of Expo; and participating in the production of In business operations, we are implementing manage the overall Unit. In the Amusement resentative Director. I will become Chairman visual products, which in turn delayed sales a live-action Gundam film. the principles of selection and concentration Unit, BANDAI NAMCO Amusement Inc. and Director, and from that position I will of packaged products. Currently, to respond Looking at products and services, a new for operations that leverage IP and the resources will manage the business. support Mr. Kawaguchi from an optimal to changes in the operating environment, we version of a popular arcade game, Mobile Suit of the Group’s businesses, such as Capsule Toy In addition, a director of BANDAI NAMCO overall perspective. Mr. Kawaguchi has a are working with new ways of interacting with Gundam: Senjo no Kizuna II, is currently in Stores and Torumo. By further enhancing unity Holdings Inc. will be responsible for and strong track record as a leader, including highly skilled at linking one successful ini- fans, such as streaming of live events with no development, and we are expanding the world- among the Group’s businesses, we will work supervise each Unit. This will reduce the the repeated achievement of record-high tiative to the next. Mr. Kawaguchi has a customers in attendance at the event venue. wide roll-out of Gundam plastic models, such to build a strong business foundation that can distance between management and business results as the leader of the Toys and Hobby cheerful personality and enjoys the confidence In the IP Creation business, as seen at the as in Asia and North America. All of our regions generate profits even in environments that execution and enable us to leverage the syn- Unit. In addition, he has a wide range of of those around him. I believe that he is an GUNDAM FACTORY YOKOHAMA, we will work together under the ALL BANDAI lack transparency.