FinancialKoei Tecmo
Financial Results for the First Quarter of the Fiscal Year Ending March 2025
1 Jan 202547 pages~27 min full read
Koei Tecmo reported a 15.9% year-on-year decline in Q1 sales to 14.8 billion yen and a 55.5% drop in net profit, primarily due to a lack of major releases.
See it on page 3The company maintains its full-year sales forecast of 92 billion yen, anticipating a 10.6% annual increase driven by a second-half release schedule that includes 'Dynasty Warriors: Origins'.
See it on page 5Under the new Fourth Medium-Term Management Plan, the firm aims to become a top-ten global digital entertainment company with a cumulative operating profit exceeding 100 billion yen over three years and a minimum 30% operating profit margin.
See it on page 31Koei Tecmo is investing over 100 billion yen in human capital and infrastructure, including a 10% annual increase in personnel costs to support global expansion and AAA development.
See it on page 46The company is shifting toward a multi-platform development strategy using the proprietary Katana Engine and Unreal Engine to target growth in North America, Europe, China, and the Middle East.
See it on page 26Governance and shareholder return policies include transitioning to a board with over 50% external directors and maintaining a 50% consolidated payout ratio with a minimum annual dividend of 50 yen.
See it on page 47Koei Tecmo experienced a transitional first quarter for the fiscal year ending March 2025, characterized by a 15.9% year-on-year decline in sales to 14.8 billion yen and a 55.5% drop in net profit. This downturn stems primarily from a lack of major new releases and a contraction in the online and mobile sectors. Despite this initial volatility, the company maintains its full-year sales forecast of 92 billion yen, representing a projected 10.6% annual increase. This optimism is anchored in a release schedule heavily weighted toward the second half of the fiscal year, featuring major titles such as Dynasty Warriors: Origins and upcoming projects for next-generation hardware.
The current fiscal year marks the commencement of the Fourth Medium-Term Management Plan, which seeks to position the firm among the world’s top ten digital entertainment companies. Strategic priorities focus on achieving a cumulative operating profit exceeding 100 billion yen over three years while maintaining an operating profit margin of at least 30%. To support these goals, the company is aggressively expanding its global publishing infrastructure and targeting growth in North America, Europe, China, and emerging markets like the Middle East. The development strategy emphasizes a multi-platform approach, utilizing the proprietary Katana Engine alongside Unreal Engine to elevate titles to AAA quality standards.
Long-term stability is being pursued through significant investments in human capital and governance. The company plans to allocate over 100 billion yen toward personnel and infrastructure, including a 10% annual increase in personnel costs to attract and retain talent. Governance reforms are also underway to meet Tokyo Stock Exchange requirements, including a transition to a board composed of over 50% external directors. Furthermore, a commitment to shareholder returns remains central to the financial strategy, with a target consolidated payout ratio of 50% and a minimum annual dividend of 50 yen, balancing aggressive global expansion with consistent investor value.
