NEWSLETTER December 2020 BANDAI NAMCO Holdings Inc. BANDAI NAMCO Mirai-Kenkyusho 5-37-8 Shiba, Minato-ku, Tokyo 108-0014 Interview with the President Due to the effectiveness of BANDAI NAMCO’s portfolio, results in the first six months of FY2021.3 surpassed our plans. BANDAI NAMCO Holdings has announced its results for the first six months of FY2021.3 (April to September, 2020). In this issue of the newsletter, BANDAI NAMCO Holdings’ President Mitsuaki Taguchi discusses the results for the Group and the trends in each business. The results for the first six months of and by toy-related items, such as confectionery, FY2021.3 have been announced. where the Charapaki series became a hit, and Taguchi: Looking at our results in the first six sundries. On the other hand, COVID-19 affected months of FY2021.3, in comparison with the prizes for amusement facilities, etc., principally planned figures that we announced in August in the first quarter. In addition, there was also — ¥315.0 billion in net sales and ¥30.0 billion an effect on sales of products linked with TV Mitsuaki Taguchi in operating profit — we achieved results that programs, etc. Nonetheless, the Toys and Hobby President & Representative Director, exceeded the plan, with ¥337.1 billion in net business achieved an overall gain in results BANDAI NAMCO Holdings Inc. sales and ¥45.9 billion in operating profit. in comparison with the previous year, when In the first six months, each of our busi- a record high was achieved. of amusement machines. Following the earlier nesses was affected in various ways by the In the Network Entertainment business, closures, amusement facilities have been global spread of COVID-19. However, the DRAGON BALL Z DOKKAN BATTLE, which reopened. Sales at existing facilities in Japan influence of these negative factors was offset is network content, was popular due in part are recovering, and were 78.3% of the previous by businesses and regional operations that to the effect of anniversary events overseas. year’s level as of September. In this envi- addressed demand associated with the trend In addition, favorable results were recorded ronment, to address changes in the operating toward people staying at home. Even as they by mainstay titles in DRAGON BALL LEG- environment, we have started new initiatives, were getting use to the new teleworking ENDS, THE IDOLM@STER series, etc. In such as the Torumo online crane game, and arrangements, our employees continued to home video games, the new CAPTAIN TSUB- these initiatives have been popular. Moving work hard, including taking steps to address ASA title got off to a favorable start. In addition, forward, we will strengthen initiatives that digitalization at Group companies around due to stronger digital demand, DRAGON leverage the distinctive strengths of the Real the world. BALL titles and repeat titles, such as in the Entertainment business, and we will rapidly DARK SOULS series, surpassed the planned implement measures to build a business Would you provide an overview of levels of unit sales. The full package download constitution that will enable the business to the first six months of FY2021.3 by sales ratio also exceeded plans. generate earnings even in challenging oper- business area? In both network content and home video ating environments. Taguchi: In the Toys and Hobby business, games, titles are enjoying longer product lives Gundam plastic models and products for the due to sustained communications with fans. mature fan base, such as collectible items, The development schedules that were delayed recorded favorable results as they captured due to COVID-19 are now being restored, but demand associated with the trend toward we will need to move forward cautiously while people staying at home by rapidly responding watching market trends. to digitalization. Moreover, in addition to In the Real Entertainment business, amuse- established IP*, popularity was also recorded ment facilities around the world were closed by new IP, such as DEMON SLAYER: Kimetsu due to COVID-19, and this affected not only no Yaiba and Disney: Twisted-Wonderland, the amusement facility business but also sales * IP: Characters and other intellectual property December 2020 1 Interview with the President Taking on the challenge of approaching males and females, and accordingly we have these types of initiatives, we will bolster our head office functions, and reeval- changes in the operating environment as high expectations. portfolio with titles developed in Japan as uating the amusement machine Gundam plastic models reached their 40th well as titles developed overseas. Moving development system. opportunities to create new business models anniversary this year, and in December we forward, we will distribute a title from another We are also advancing collab- and customer value will implement successive launches around company, Cyberpunk 2077, principally in oration between content and the world of PERFECT GRADE UNLEASHED, Europe, and in February 2021, we will launch facilities in ways that leverage Taguchi: In the Visual and Music Production to the acquisitionof new customers. Moving the ultimate Gundam plastic model. Also, these Little Nightmares 2. Also, although their BANDAI NAMCO’s distinctive business, we rolled out established IP pack- forward, we will take on the challenge of models are already popular in Asia and Japan, launch dates have not yet been determined, assets and know-how. In addition aged product titles, such as in the Love Live! approaching changes in the operating envi- and next we are aiming to expand sales of we are advancing development of ELDEN to offering limited availability Sunshine!! and THE IDOLM@STER series. ronment as opportunities to create new business Gundam plastic models in North America. In RING and, for next-generation game machines, prizes for BANDAI NAMCO However, due to the influence of COVID-19, models and customer value. this market, large retail chains have decided SCARLET NEXUS. Amusement Inc. facilities and the number of live events held in the first six to carry these products, including not only holding IP campaigns, from August months was down significantly from the pre- Would you discuss the full-year plan? Target and Hobby Lobby but also Walmart What is the situation in the Real we also started to roll out Capsule vious year, which affected our results. In Taguchi: When we announced our results for and other retail chains. Moreover, in prepa- Entertainment business? Toy Stores. We are selling a wide addition, the production and opening schedules the first six months, we did not make any ration for the growth of Gundam plastic model Taguchi: In the Real Entertainment business, range of capsule toys at the first for visual and music products were also revisions to the full-year plan for FY2021.3. sales overseas, we decided to expand the our highest priority issue is building a business store, in Yokohama, where we have installed marketing, and accordingly we will aim to affected, and multiple visual product openings The circumstances regarding the global spread BANDAI HOBBY CENTER, our manufac- constitution that can generate earnings even more than 2,200 capsule toy vending machines. strengthen our business constitution by applying and packaged title launches were delayed. In of COVID-19 remain uncertain, and at this turing base in Japan. We have completed the in a challenging operating environment. We This product lineup and expertise have been the principles of selection and concentration live events, we are also working on the devel- point it is difficult to appropriately calculate expansion and started operations. Going are implementing a variety of initiatives, such highly evaluated, and the store has been pop- to BANDAI NAMCO’s distinctive strengths. opment of a new business model that is aligned what effect COVID-19 will have up to the forward, we will continue to implement col- as carefully examining facility openings and ular. Real venues are important for BANDAI with the changes that we face. end of FY2021.3. Also, from the third quarter laboration between Gundam plastic models closures, reducing operating costs, streamlining NAMCO in terms of both business and In the IP Creation business, events were the Toys and Hobby business has its largest and other Group businesses, and we will work canceled due to COVID-19, but the effect on annual selling season, and we will need to to increase sales around the world. earnings in the first six months was limited. confirm the situation, especially in Europe Aiming to be the only one for fans In the first six months of the fiscal year, we and the Americas. Moreover, it is possible What is the situation in the Network around the world produced visual products that will be launched that results will be affected by the trends in Entertainment business? in the third quarter and thereafter, and we home video game development and launch Taguchi: In the Network Entertainment busi- Would you discuss the situation in the In the IP Creation business, in collaboration work to build Gundam into a worldwide IP. In worked from a variety of directions to create schedules. We have decided to carefully exam- ness, from FY2021.3, we transitioned from Visual and Music Production and IP with the Visual and Music Production business, 2021, and thereafter, in addition to roll-outs of buzz about IP. SOTSU CO., LTD., has joined ine the numbers and disclose them to an organization based on devices, such as the Creation businesses? Love Live! Nijigasaki High School Idol Club new visual products and other products, we the IP Creation Unit from FY2021.3. As a stakeholders at the point when the trends network content division and the home video Taguchi: We are implementing a variety of was launched in October and has been popular.