Kadokawa Dwango Financial Results for the Fiscal Year Ended March 31, 2019

Key insights

7 takeaways

01
Kadokawa Dwango reported total revenue of 208,605 million yen for the fiscal year ended March 31, 2019, with a net operating income of 2,707 million yen.See it on page 4
02
FromSoftware’s game release 'SEKIRO: SHADOWS DIE TWICE' was a major driver of performance, exceeding 2 million units sold worldwide shortly after its March 2019 launch.See it on page 36
03
The company forecasts significant growth for the fiscal year ending March 31, 2020, projecting a 99.4% increase in operating income to 5,400 million yen and a 47.4% increase in ordinary income to 6,200 million yen.See it on page 8
04
Overseas revenue for the group grew from 4.3 billion yen in March 2015 to 15.1 billion yen by March 2019, reflecting a core strategy of global IP expansion.See it on page 23
05
E-book sales experienced dramatic growth, with the Golden Week holiday fair achieving a 200% year-on-year increase in estimated circulation through platforms like BOOK☆WALKER and Amazon.See it on page 32
06
The Publication segment was the strongest performer in FY2019, generating 115,958 million yen in revenue and 7,253 million yen in operating income, an increase of 1,253 million yen over the previous year.See it on page 9
07
The niconico Chokaigi 2019 event reached record engagement, drawing 168,248 physical attendees and over 6.6 million online visitors, both representing 4% and 9% year-on-year growth respectively.See it on page 28

Summary

Kadokawa Dwango concluded the fiscal year ending March 31, 2019, with a revenue of 208.6 billion yen, representing a marginal increase of 0.9 percent. Operating income experienced a 13.9 percent decline to 2.7 billion yen, though the firm successfully outperformed its revised financial forecasts. This performance was anchored by robust growth in the publication segment and the significant commercial success of the video game SEKIRO: SHADOWS DIE TWICE, which reached two million units sold. Conversely, the web services segment, specifically the Niconico platform, faced headwinds characterized by declining premium and mobile membership, leading to operating losses that the company is now actively addressing through restructuring.

To restore profitability and enhance long-term competitiveness, a comprehensive corporate reorganization is scheduled for July 1, 2019. The transition into an operating holding company structure is designed to centralize governance and accelerate digital transformation. Strategic initiatives include the establishment of a dedicated Digital Transformation Strategy Headquarters and the formation of KADOKAWA Connected to leverage data-driven decision-making and optimize ICT infrastructure. By withdrawing from underperforming services and focusing on high-growth areas, the organization aims to achieve an operating income target of 5.4 billion yen for the fiscal year ending March 31, 2020.

The overarching corporate strategy centers on an integrated intellectual property model that facilitates the seamless flow of content across publishing, anime, and gaming divisions. By prioritizing overseas licensing and expanding e-book distribution, the company seeks to capitalize on global demand for its creative assets. While management remains optimistic regarding these recovery efforts, stakeholders are cautioned that these projections are subject to market uncertainties and actual results may vary from current forecasts.