FinancialKoei Tecmo
Fiscal Year Ending March 2018: 1st Half Financial Results
1 Jan 201733 pages~7 min full read
Koei Tecmo achieved record-breaking profitability for the first half of FY2018, with ordinary profit rising 40.6% to 6.9 billion yen and net income increasing 33% to 5.0 billion yen, despite a 10% decline in total sales to 14.9 billion yen.
See it on page 2The company is successfully pivoting to international markets, as overseas revenue grew 15.6%—led by a 45.9% surge in Asia—while domestic sales in Japan fell by 19.1%.
See it on page 5Overseas software sales now account for 69.3% of total volume, with unit sales in North America and Europe nearly doubling compared to the previous year.
See it on page 6Key software titles drove performance, most notably 'Nioh,' which surpassed 2 million units sold, alongside the release of 'Fire Emblem Warriors.'
See it on page 28Management projects a strong full-year outlook of 42 billion yen in sales and 11.5 billion yen in operating profit, supported by a strategy of multi-platform releases on Nintendo Switch, PS4, and Steam.
See it on page 20Future growth initiatives include the expansion of smartphone gaming via the new 'midas' brand, the deployment of 'VR Sense' location-based cabinets, and a strategic AI partnership with HEROZ, Inc.
See it on page 18Koei 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.
