Financial Results for the First Quarter of the Fiscal Year Ending March 2026

Koei Tecmo’s financial performance for the first quarter of the fiscal year ending March 2026 reflects a transitional period characterized by a temporary decline in revenue and profit. Net sales fell 15.9% year-on-year to ¥14.8 billion, while operating profit decreased 37.6% to ¥3.57 billion. This downturn is attributed to a lack of major new software releases and a contraction in mobile and online revenue. Despite these immediate headwinds, operating profit exceeded internal expectations, and the full-year sales forecast remains steady at ¥92 billion. Management anticipates a significant recovery in the second half of the fiscal year, supported by a robust pipeline of high-profile titles including Dynasty Warriors: Origins and upcoming entries in the Nioh and Ninja Gaiden franchises.

The strategic focus under the current Medium-Term Management Plan emphasizes aggressive investment in human capital and infrastructure to ensure long-term growth. This includes a planned 10% annual increase in labor costs and a ¥25 billion office acquisition. Financial stability is maintained through a conservative accounting approach where development costs are recognized as incurred, mitigating future impairment risks. Simultaneously, the company is working to meet Tokyo Stock Exchange Prime Market listing criteria by increasing its tradable share ratio to 35% by March 2026, while maintaining a shareholder return policy of a 50% total allocation ratio.

Geographically, the growth strategy bifurcates by platform and region, prioritizing console and PC expansion in North American and European markets while focusing on mobile dominance in Japan and China. Emerging markets in India and Southeast Asia are also being targeted for research and development through the company’s Singapore operations. With the Nioh series already surpassing 8 million units sold, the upcoming release of Nioh 3 in early 2026 serves as a cornerstone for the company’s global software strategy. By balancing major intellectual properties with low-risk titles, the organization aims to stabilize profitability across diverse global segments.