Koei Tecmo Holdings Financial Results: Fiscal Year Ending March 2024

Key insights

7 takeaways

01
Koei Tecmo reported total sales of 84.58 billion yen for FY2023, a 7.9% increase year-on-year, driven primarily by strong performance in the Japanese market.See it on page 12
02
The company plans to increase full-year sales to 90 billion yen and operating profit to 30 billion yen in FY2024, supported by the launch of multiple new titles and back-catalog sales.See it on page 37
03
Operating costs rose significantly in FY2023, with outsourcing costs increasing by 69.1% to 9.15 billion yen and employment costs rising 11% to 23.07 billion yen.See it on page 10
04
Overseas sales volume for console titles is projected to grow by 19.9% in FY2024, reaching 5.9 million units and accounting for 77.6% of total unit sales.See it on page 12
05
The company is prioritizing growth in open-world genres and the integration of generative AI into production processes as part of its FY2024 management policy.See it on page 33
06
Koei Tecmo continues to target an operating profit of 40 billion yen under its current mid-term management plan, while preparing to announce its 4th Mid-Term Management Plan (FY2025-2027) in early 2025.See it on page 21
07
The company maintains a strong financial position through consistent non-operating income, which has allowed for sustained shareholder dividends and ongoing investment in AAA-class titles like 'Rise of the Ronin'.See it on page 17

Summary

Koei Tecmo Holdings achieved record-high sales of 84.6 billion yen for the fiscal year ending March 2024, representing a 7.9 percent year-over-year increase. This growth was primarily fueled by robust performance within the online and mobile segments. Despite these revenue gains, operating profit contracted by 27.2 percent to 28.5 billion yen. This decline is attributed to a strategic increase in operational expenditures, including expanded headcount, higher outsourcing costs, and intensified global marketing efforts, alongside a shift in the overall product mix.

The company is currently executing a long-term growth strategy centered on the development of AAA-class titles, exemplified by the recent launch of Rise of the Ronin. To support this objective, management has established a dedicated AAA Studio and is integrating generative AI into production workflows to enhance efficiency. These initiatives are underpinned by the proprietary Katana Engine, which facilitates streamlined multi-platform development. By balancing established intellectual property with new global franchises, the firm aims to optimize its development pipeline and maintain a disciplined project management framework.

Looking toward the fiscal year 2025, the company has adopted a conservative outlook, targeting 90 billion yen in sales and 30 billion yen in operating profit. Management remains committed to achieving a long-term operating profit ratio exceeding 30 percent. To reach these benchmarks, the organization is transitioning to a new leadership structure while prioritizing talent development and the expansion of IP licensing. Through these measures, the company seeks to stabilize its financial performance and solidify its competitive position within the global gaming market.