Kadokawa Financial Results: Fiscal Year Ended March 31, 2023

Key insights

7 takeaways

01
Kadokawa forecasts a decrease in total sales and profit for the fiscal year ending March 31, 2024, primarily due to a reactionary decline following the record-breaking performance of ELDEN RING in the previous year.See it on page 7
02
The non-game segments are projected to grow in the fiscal year ending March 31, 2024, with expected increases of 2.1% in net sales and 11.8% in operating profit.See it on page 12
03
FromSoftware plans to release ARMORED CORE VI FIRES OF RUBICON on August 25, 2023, as part of a strategy to stabilize the volatile game business by extending IP lifecycles and expanding into mobile games.See it on page 19
04
Overseas sales reached 20.5% of total consolidated net sales, with the overseas business growing 25% year-on-year in Q4, driven by strong performance in North America and Asia.See it on page 55
05
The publication business remains a core growth driver, with e-book sales continuing to outperform the market and plans to increase domestic paper-based titles through enhanced DX operations and editing systems.See it on page 15
06
The animation business saw significant growth, with net sales increasing 49% year-on-year and overseas animation revenue rising 87% year-on-year.See it on page 16
07
Kadokawa has completed a governance restructuring, including the abolition of Senior Managing Executive Officer meetings and the relocation of the Intellectual Property and Legal Department to the Internal Control Division to improve compliance and decision-making.See it on page 43

Summary

Kadokawa achieved record-high net sales and operating profit for the fiscal year ending March 31, 2023, largely propelled by the global commercial success of the video game Elden Ring. This performance underscored the efficacy of the company’s Global Media Mix strategy, which leverages cross-platform IP adaptations to drive revenue. While the gaming segment served as a primary catalyst for growth, the publication, animation, and education sectors also demonstrated consistent expansion. Notably, international operations saw an 82 percent increase in sales, now accounting for over one-fifth of total consolidated revenue. Despite these gains, net profit attributable to owners of the parent experienced a decline, attributed to extraordinary losses linked to infrastructure investments and logistics system upgrades.

Looking toward the fiscal year ending March 31, 2024, the company anticipates a reactionary decline in overall sales and profit due to the absence of the initial Elden Ring launch impact. To mitigate this, management is prioritizing long-term profitability through continued investment in digital publishing, TATESC comics, and the expansion of educational student bases. The company is also refining its portfolio by exiting unprofitable facility operations and focusing on high-growth digital infrastructure. These efforts are supported by a commitment to strengthening corporate governance, as evidenced by the transition to a nomination committee structure and the implementation of rigorous internal control reforms.

Strategic focus remains centered on the medium-to-long-term development of core IP pipelines and the enhancement of overseas sales channels. By integrating TCFD-aligned sustainability goals and human capital strategies, the organization aims to foster a culture of creativity and legal compliance. Ultimately, the company is positioning itself to sustain growth by balancing aggressive investment in its diverse media portfolio with a more robust and transparent corporate foundation, ensuring that its global media mix remains a resilient driver of value across international markets.