Financial

Fiscal Year Ending March 2018: 1st Half Financial Results

1 January 201733 pages1,321 words

Summary

Koei Tecmo Holdings reported record-breaking financial performance for the first half of the fiscal year ending March 2018, achieving all-time highs in ordinary profit and net income. Despite a 10% year-over-year decrease in sales to 14.9 billion yen, ordinary profit rose 40.6% to 6.9 billion yen, and net income increased 33% to 5.0 billion yen. These results significantly exceeded initial management forecasts, driven by high-margin IP licensing and a strong performance in the entertainment segment, which remains the primary revenue driver. The geographic scope of the results reveals a strategic shift toward international markets. While domestic sales in Japan declined by 19.1%, overseas revenue grew by 15.6%, with the Asian market showing the most significant growth at 45.9%. Unit sales data further illustrates this trend, as overseas software sales rose to 69.3% of the total volume, nearly doubling in North America and Europe compared to the previous year. Key titles contributing to this success included Nioh, which surpassed 2 million units, and Fire Emblem Warriors. Looking ahead, the company maintains an optimistic full-year outlook, projecting sales of 42 billion yen and an operating profit of 11.5 billion yen. The strategy for the second half of the fiscal year focuses on multi-platform releases for the Nintendo Switch, PlayStation 4, and Steam, alongside the expansion of smartphone gaming through the new "midas" brand. Additionally, the company is diversifying its portfolio through location-based entertainment, such as the "VR Sense" cabinet, and strategic alliances with AI technology firms like HEROZ, Inc. to enhance future development capabilities.

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