FinancialKoei Tecmo
Financial Results for the First Half of the Fiscal Year Ending March 2020
25 Oct 201928 pages~18 min full read
Koei Tecmo reported a 4.8% 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, driven by higher development costs and lower console sales.
Despite the initial operating profit decline, the company maintains its full-year sales forecast of ¥43 billion, a 10.3% year-on-year increase, supported by strong performance in mobile and online segments.
The company is targeting an operating profit of ¥17 billion by the end of the next fiscal year, anchored by a goal of selling five million units for a major AAA console title and generating ¥1 billion in monthly revenue from a top-tier mobile title.
Growth projections for the current fiscal year rely on a 29.6% surge in overseas sales and a 61.4% increase in international console unit volume.
Recent titles such as 'Atelier Ryza' and the co-developed 'Fire Emblem: Three Houses' are serving as the foundation for the company's international expansion strategy.
Increased fixed costs during this period were attributed to the completion of the Minato-Mirai office and the expansion of internal development teams.
Future growth is supported by a release pipeline that includes 'Nioh 2' and 'Persona 5 Scramble', alongside a long-term focus on global IP licensing and multi-platform expansion.
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.
