Financial Results for the Third Quarter of the Fiscal Year Ending March 2023
The quarterly financial release for the third quarter of fiscal 2023 presents a comprehensive overview of KOEI TECMO HOLDINGS’ performance, highlighting a decline in sales and profitability relative to the prior year. Total sales fell by 10.6 % from ¥49,439 million to ¥55,327 million, driven primarily by a 31.8 % drop in console package revenue and an 11.6 % decline in entertainment segment sales. Operating profit contracted by 15.2 %, from ¥27,127 million to ¥22,994 million, while ordinary and net profits fell 56.5 % and 52.4 %, respectively, reflecting the impact of a significant loss on derivative valuations amid volatile financial conditions.
Geographically, Japan contributed 49.9 % of sales in FY22, down 7.6 % from the previous year, whereas overseas sales declined 13.6 %. North America and Europe experienced sharper contractions of 25.3 % and 29.7 %, respectively, while Asia’s share fell modestly by 7.0 %. Unit sales increased slightly overall (4.9 % YoY), with digital download units rising 11.7 %, indicating a shift toward digital distribution.
The company’s strategic focus for the fourth quarter includes releases such as “WILD HEARTS,” “Wo Long: Fallen Dynasty,” and “FATAL FRAME: Mask of the Lunar Eclipse.” Staffing expanded by 15.7 % to 2,400 employees, and headcount growth was supported by the addition of a Vietnam subsidiary. Despite upward revisions to operating profit forecasts, the report underscores ongoing risks from market volatility and derivative exposure.
Overall, the document conveys a cautious outlook, noting that while digital sales have gained share, traditional packaged game revenue remains under pressure, necessitating continued portfolio adjustments and cost management.