FinancialKoei Tecmo
Fiscal Year Ending March 2017 Financial Results
1 Jan 201631 pages~10 min full read
Koei Tecmo achieved a 7.1% increase in net income to 11,624 million yen for the fiscal year ending March 2017, despite a 3.4% decline in total sales to 37,034 million yen.
Profitability growth is primarily driven by high-margin digital distribution and the performance of key intellectual properties.
Overseas unit sales grew to 51.7% of total volume, even as Japan remained the largest revenue market at 73.1% of total sales.
Key product successes included the action title Nioh, which surpassed one million units sold, and the mobile game Dynasty Warriors Unleashed, which exceeded three million downloads.
The company set a sales target of 42,000 million yen for the 2018 fiscal year, aiming for record-high profits through multi-platform expansion and Nintendo Switch and PlayStation VR support.
Management is implementing stricter quality and delivery controls to mitigate risks from recent game delays while launching 'midas,' a new mobile-focused development brand.
Koei Tecmo Holdings presents its financial results for the fiscal year ending March 31, 2017, alongside its strategic outlook for the 2018 fiscal year. The primary thesis emphasizes that an increasing proportion of digital business sales is a fundamental driver of corporate profitability. While total sales for FY2016 saw a slight year-over-year decline of 3.4% to 37,034 million yen, net income rose by 7.1% to 11,624 million yen. This growth in net profit despite lower revenue is attributed to the higher margins associated with digital distribution and the success of key intellectual properties.
The data covers global operations, with Japan remaining the largest market at 73.1% of sales. However, overseas unit sales grew to 51.7% of the total volume, led by strong performance in North America and Asia. Key product milestones include the success of Nioh, which surpassed one million copies worldwide, and the strong performance of mobile titles like Dissidia Final Fantasy Opera Omnia and Dynasty Warriors Unleashed, the latter of which exceeded three million downloads. The entertainment segment remains the dominant revenue contributor, supported by smaller contributions from pachislot, amusement facilities, and real estate.
Looking forward to FY2017, the strategy focuses on IP creation and multi-platform expansion, including support for the Nintendo Switch and PlayStation VR. The company aims for record-high profits with a sales target of 42,000 million yen. To mitigate risks associated with recent game delays, management is implementing stricter quality and delivery controls. The plan also includes the launch of "midas," a new brand focused on mobile development by younger creators, and increased collaborative efforts across different media and industries to maximize the value of existing franchises.
