Financial

Financial Results for the First Half of the Fiscal Year Ending March 2020

25 October 201928 pages3,535 words

Summary

Koei Tecmo reported a 4.8% year-on-year decrease in sales to ¥16.56 billion and a 26.6% drop in operating profit for the first half of the fiscal year ending March 2020. These declines were primarily driven by lower console sales and rising development costs associated with future projects. However, ordinary and net profits exceeded initial projections due to robust non-operating income and significant growth in the online and mobile segments. This success was largely fueled by IP licensing and the performance of smartphone titles, which helped offset the impact of increased fixed costs related to the completion of the Minato-Mirai office and expanded development teams. The current fiscal year serves as a strategic preparation period for the company’s 2020 mid-term goals. Despite the early dip in operating profit, the full-year forecast remains unchanged at ¥43 billion in sales, representing a 10.3% year-on-year increase. This growth is expected to be driven by a 29.6% surge in overseas sales and a 61.4% rise in international console unit volume. Recent successes, such as the strong performance of Atelier Ryza and the critical acclaim for co-developed titles like Fire Emblem: Three Houses, provide a foundation for this expansion. Long-term strategy focuses on the creation of global intellectual properties and multi-platform expansion. The company is targeting an operating profit of ¥17 billion by the end of the next fiscal year, supported by the development of a major AAA console title aimed at selling five million units and a top-tier mobile title capable of generating ¥1 billion in monthly revenue. With a pipeline featuring high-profile releases such as Nioh 2 and Persona 5 Scramble, the company aims to leverage its royalty income and international reach to achieve sustainable growth across the global gaming market.

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