Kadokawa 1st Quarter Earnings Results: June 30, 2023

Kadokawa’s consolidated earnings results for the first quarter of the fiscal year ending March 31, 2024, reflect a period of transition characterized by a significant year-over-year decline in gaming revenue following the previous year’s exceptional performance. Total net sales reached 58,835 million JPY, an 8.4% decrease compared to the same period in 2022, while operating profit fell 66.0% to 3,267 million JPY. Despite these declines, the company’s non-gaming segments demonstrated resilience, with total non-gaming net sales increasing by 5.4% and international publication and video sales growing by 9% due to successful media-mix strategies.

The gaming segment experienced the most pronounced contraction, with net sales dropping 65.8% and operating profit declining 82.4% as the company moved past the peak success of major titles like Elden Ring. Conversely, the video segment emerged as a strong performer, with operating profit rising 120.2% to 1,497 million JPY, driven by the popularity of animation titles such as Oshi no Ko. The publication segment saw a slight 1.3% increase in net sales, though operating profit fell 60.0% due to rising costs for materials, workforce expansion, and investments in logistics infrastructure.

Looking ahead, the company maintains its full-year forecast, anticipating a rebound in performance starting in the second quarter. This optimism is supported by a robust pipeline of new releases, including sequels to popular series, the launch of new gaming titles such as Armored Core VI, and the continued global distribution of animated intellectual property. Strategic investments in digital manufacturing and logistics facilities are expected to enhance operational efficiency, while the education segment continues to expand, bolstered by rising student enrollment in N/S high schools and the upcoming launch of Zen University.