Financial Results for the First Quarter of the Fiscal Year Ending March 2023

Koei Tecmo Holdings reported record quarterly operating profit for the first quarter of the fiscal year ending March 2023, covering the period from April to June 2022. While net sales decreased by 9.1% year-over-year to 18.65 billion yen, operating profit rose by 19.9% to 11.66 billion yen. This growth in profitability was driven by an improved operating profit ratio and the partial reversal of development costs from cooperative partners. Conversely, ordinary profit and net profit saw significant declines of approximately 50% each, attributed to non-operating expenses resulting from a portfolio restructuring intended to address a challenging financial environment.

The entertainment segment remained the primary business driver, contributing 17.8 billion yen in sales. Performance was bolstered by the release of Fire Emblem Warriors: Three Hopes and steady sales of Winning Post 9 2022 and Taikou Rissiden V DX. Total console software sales reached 3.09 million units, a 26.1% increase over the previous year, with overseas markets accounting for over 72% of total volume. Despite the growth in unit sales, package sales revenue declined by 30.8%, while digital download revenue grew by 17.4%, maintaining a digital sales ratio of 60.5%. The online and mobile sectors experienced a slight 4.9% decline in revenue compared to the prior year but remained a stable component of the business.

Geographically, sales were evenly split between Japan and overseas markets, with Asia representing the largest international territory. Looking ahead, the company maintained its original first-half and full-year forecasts, citing an upcoming pipeline that includes Nobunaga’s Ambition: Shinsei and Wo Long: Fallen Dynasty. Operational costs increased as the total headcount grew by 15.6% to 2,413 employees, reflecting continued investment in development capabilities across its global offices.