FinancialKoei Tecmo
Financial Results for the Third Quarter of the Fiscal Year Ending March 2023
1 Jan 202313 pages~6 min full read
Koei Tecmo reported a significant year-over-year decline for Q3 FY2023, with net sales falling 10.6% to 49.4 billion yen and net profit dropping 52.4% to 13.5 billion yen.
Digital sales remain the core of the entertainment segment, accounting for 78.8% of total revenue despite a decline in physical packaged software sales.
Total unit sales increased by 4.9% to 5.98 million units, demonstrating that strong digital download volume offset the overall revenue downturn.
The company revised its full-year outlook, raising its operating profit target to 34 billion yen while lowering net profit expectations due to non-operating losses from derivative valuations.
Growth strategy for the remainder of the fiscal year centers on the release of major titles including Wild Hearts, Wo Long: Fallen Dynasty, and Atelier Ryza 3, alongside the mobile launch of Nobunaga’s Ambition: Ha-do.
Koei Tecmo expanded its workforce by 15.7% to 2,400 employees to support long-term development capacity.
Revenue remains geographically balanced, with 51.6% generated in Japan and 48.4% coming from overseas markets, primarily in Asia and North America.
Koei Tecmo Holdings presented its financial results for the third quarter of the fiscal year ending March 2023, revealing a period of transition characterized by a year-over-year decline in sales and profits. Net sales reached 49.4 billion yen, a 10.6% decrease from the previous year, while net profit fell 52.4% to 13.5 billion yen. This downturn is attributed primarily to a high baseline in the prior year driven by major packaged game releases and significant non-operating losses on the valuation of derivatives caused by a volatile financial environment.
The entertainment segment remains the primary driver of the business, contributing 46.3 billion yen in sales. While console software sales saw a decline in physical package revenue, digital sales remained resilient, accounting for 78.8% of the entertainment segment's total sales. Geographically, the company maintains a balanced profile, with 51.6% of revenue generated in Japan and 48.4% from overseas markets, particularly in Asia and North America. Despite the dip in revenue, total unit sales actually increased by 4.9% to 5.98 million units, bolstered by strong digital downloads.
Looking ahead, the company revised its full-year earnings forecast, raising its operating profit target to 34 billion yen while lowering ordinary and net profit expectations due to the aforementioned non-operating expenses. Growth strategy for the fourth quarter relies on a robust pipeline of global releases, including high-profile titles such as Wild Hearts, Wo Long: Fallen Dynasty, and Atelier Ryza 3. Additionally, the mobile sector showed momentum with the successful launch of Nobunaga’s Ambition: Ha-do and continued regional expansion of existing smartphone IPs. To support this long-term growth, the company increased its total headcount by 15.7% to 2,400 employees.
