Kadokawa Corporation Summary of Consolidated Financial Results for the Six Months Ended September 30, 2022

Kadokawa Corporation experienced a period of robust financial expansion during the first half of the fiscal year ending September 30, 2022, characterized by significant revenue growth and strategic restructuring. Consolidated net sales reached 122,639 million yen, representing a 17.0% increase over the previous year, while operating profit climbed 33.2% to 13,237 million yen. This performance was anchored by the Publication segment as a primary revenue driver, complemented by a remarkable 255.1% surge in the Game segment, which was propelled by the global commercial success of the title Elden Ring.

Strategic capital management played a central role in the company’s operations during this period. Kadokawa reduced its ownership stake in its subsidiary, FromSoftware, from 100% to 69.7% through a third-party allotment of shares. This transaction generated 21,984 million yen in capital surplus, a move specifically intended to bolster the development of global game intellectual property. These financial maneuvers contributed to an overall increase in total and net assets, supported by strong cash flow from financing activities.

Despite these positive financial indicators, the organization navigated a complex internal environment marked by leadership instability. Following the arrest of senior executives in connection with bribery allegations related to the Tokyo 2020 Olympic Games, the company established a Corporate Governance Inspection Committee to address internal control and compliance deficiencies. Notwithstanding these governance challenges, Kadokawa maintained its original operating result forecasts for the full fiscal year, signaling confidence in the continued performance of its core business segments and the long-term viability of its expanded investment strategy.