Konami Group Interim Report

Transcription

1 Fiscal 2014 Konami Group Interim Report April 1, 2013 September 30, 2013 KONAMI CORPORATION

2 To Our Shareholders I sincerely hope that this interim report finds shareholders prospering and in good health. Getting down to business, in the fields of entertainment and health where the Konami Group concentrates its efforts, the business environment continues to change amid evolving social needs and brisk activity in industry circles fueled by technological innovations. The Group s principal businesses in the entertainment and health fields are Digital Entertainment, Health & Fitness, Gaming & Systems, and Pachinko & Pachinko Slot Machines. In these business segments, we consistently strive to provide products and services that capture current trends and thereby address the expectations placed upon us. In the entertainment field, most notably in Digital Entertainment, the popularity of new devices, particularly smartphones, has spread swiftly around the globe due to steady diversification of consumer needs in every country in the world. Today, people have ready access to all sorts of content anytime they want, and I sense that the public s expectations of us, as a provider of content, rise higher and higher with each passing day. In the health field, interest in sports for health reasons is sure to grow in Japan, buoyed by Tokyo s winning bid to host the 2020 Summer Olympics. In addition, the composition of Japanese society is definitely heading toward fewer children and more seniors, and I believe our social responsibility as a total health partner will continue to increase with this shifting demographic. Addressing changing social conditions and shifts in the market environment, we aim to reinforce the Group structure from a global perspective, which will allow us to better respond to the expectations of all stakeholders. At the same time, we are committed to ceaselessly delivering excellent products and services to customers as we continue working together as one to take on new challenges in our quest for success. On behalf of the Konami Group, I ask you, our valued shareholders, for your continued support and encouragement of our efforts. Takuya Kozuki President and Representative Director 1

3 Corporate Social Responsibility Initiatives As a good corporate citizen, the Konami Group has designated making positive contributions to society a core management policy and undertakes initiatives for corporate social responsibility across the entire Group. Environmental Preservation Efforts User-participation forest preservation event Konami Digital Entertainment Co., Ltd. rolled out a forest conservation initiative* through an in-game event in DRAGON COLLECTION, the wildly popular social media content with over 8 million users. The goal of this initiative was to help protect woodland in Iwaizumi-chō and Kuzumaki-machi in Iwate Prefecture. The event, which ran from September 27 to October 11, 2012, and also from April 25 to May 9, 2013 tasked players with completing a certain number of stages. KONAMI would donate for woodland preservation activities in accordance with task accomplishment of players. In the end, over 680,000 players participated in the event, enabling the support of preservation initiatives across approximately 2,820,000 m2 (equal to 60 Tokyo Domes) of forest land. Unitization of Green Power Certification System User DRAGON COLLECTION Protect the Forest Project This project has allowed Konami Group to defend the forests side-by-side with our customers and impart valuable forest preservation knowledge. The project has both helped draw attention to the necessity of preserving our forest land, and been a platform for Konami Group to contribute funding to national forest preservation initiatives based on users in-game achievements. Participation in DRAGON COLLECTION in-game event Support of forest preservation according to number of users who succeed in the in-game event CO2 Absorption Water Yield National Forests Protecting the many important functions of our forests The Konami Group participates in the prevention of global warming by utilizing a Green Power Certification System at our booth in various exhibitions, such as TOKYO GAME SHOW. Green Power refers to electricity that has relatively low impact on the environment, being generated from renewable natural energy sources including wind, solar, biomass, and mini-hydro power. We utilized 13,000 kwh of Green Power during the TOKYO GAME SHOW 2013 held in September. KONAMI will continue to pursue initiatives to preserve the global environment. Biodiversity Disaster Defense * Accomplished through the purchasing of CO 2 absorption credit through the FORESTOCK Association, the proceeds from which were used as forest preservation funding. 2

4 Topics Worldwide Release of PES 2014 Pro Evolution Soccer Digital Entertainment The worldwide release of PES 2014 Pro Evolution Soccer, the latest title in the Pro Evolution Soccer series, kicked off in Europe in September. This most recent game features Fox Engine, KONAMI s next-generation game engine, which facilitates a more lifelike reproduction of player expressions and skin texture as well as a faithful reproduction of the stadium atmosphere, and delivers more realistic and exciting action. Another new aspect of the game is that actual game commentary has been recorded in Arabic. This extends the range of player-targeted countries and regions to include the Middle East and enables more people to enjoy the Pro Evolution Soccer series. In addition, we started distribution over the cloud in September in the European market as one of several game platforms we aim to develop further. KONAMI will continue to deliver dynamic matches to soccer fans around the world through new titles in the Pro Evolution Soccer series. You Can Continue Concept Revamped Konami Sports Club Services Health & Fitness At Konami Sports Clubs, we updated services under the concept of you can continue, that is, making it easier for club members to keep working out. Reflecting on feedback from customers about service improvements, beginning with comments heard most often, we came up with new pricing plans and a new facility usage system. Our new pricing format determines a monthly membership payment based on the number of times a customer expects to use the facilities weekly, bi-monthly, or unlimited. This allows everyone, even potential customers who have been unsure about taking out a membership before, to select a no-pressure plan matched to personal fitness goals achieved at the individual s own pace. Under the new facilities usage system, the number of facilities that members can utilize without incurring extra charges has increased to 184. This system is a direct response to customers who revealed that they were unable to maintain their fitness programs because the selection of membership-inclusive facilities was too limited. It is of great importance to Konami Sports Club that you can continue in your exercise regime so that you stay healthy. Our mission as a total health partner is to support customers by offering a range of facilities, services and a menu of plans. Going forward, we will introduce new services fine-tuned to provide customers with the kind of services and support that enable them to stay healthy. 3

5 New Model Titan 360 Announced KONAMI launched the Titan 360 multi-station slot machine for casinos. Titan 360 comprises Podium Slant cabinets in configurations set around an enormous central bonusing unit, like a token game machine, which leverages a mechanical wheel and large, rolling metallic balls in the upper section to determine bonus award amounts. This machine delivers thrilling, high-frequency bonus events that create an exciting and impressive gaming experience. Titan 360 is the result of know-how accumulated by KONAMI over many years in the amusement business as well as the fusion of gaming and amusement division technologies. Exclusive to KONAMI, it is entertainment that simply cannot be Gaming & Systems replicated. KONAMI will continue to deliver new fun and valuable time to customers around the world through an extensive range of gaming products. Dokkan Magical Halloween Fan Appreciation Festival 2013 Magical Halloween Series Appeals Pachinko & Pachinko Slot Machines Dokkan Magical Halloween Fan Appreciation Festival 2013 was held in Akihabara, Tokyo, on September 15 for fans of the popular KPE pachinko slot machine series Magical Halloween. Since the first title debuted in 2007, the Magical Halloween series has attracted a loyal following for KPE s original content. The recent event was held to thank fans for all their support and to rekindle interest in this series. The rain on the event day did not dampen the enthusiasm of fans who attended in great numbers, forming a long queue that snaked its way to the venue doors. The event began with a presentation on the newest title, Magical Halloween 4. The unique world of the series is unchanged, as revealed in the latest trailer, but game quality has been enhanced. A talk show, mini concert and a rare game-merchandise lottery took place on a specially built stage. Fans thoroughly enjoyed the events on stage. The event also featured interactive activities, such as darts and a quiz about the Magical Halloween series, and enabled fans to experience the world of Magical Halloween through various formats. Magical Halloween 4, the latest title of Magical Halloween, has been well received by players at pachinko parlors across the country. 4

6 Consolidated Financial Highlights (U.S. GAAP) Net Revenues ( billion) Interim Annual ( billion) Interim Annual Operating Income Net Income ( billion) (Fiscal years ended/ending March 31) (Fiscal years ended/ending March 31) (Fiscal years ended/ending March 31) Interim 7.0 Annual Consolidated Balance Sheets (Key items) (Yen in Millions) As of September 30, 2013 As of March 31, 2013 Current assets 143, ,483 Fixed assets 187, ,465 Total assets 330, ,948 Current liabilities 53,772 59,512 Long-term liabilities 51,728 37,437 Equity 225, ,999 Total liabilities and equity 330, ,948 Consolidated Statements of Income (Key items) (Yen in Millions) Six months ended Six months ended September 30, 2013 September 30, 2012 Net revenues 97, ,673 Operating income 3,771 12,563 Income before income taxes 4,217 11,488 Net income 2,016 6,955 Consolidated Statements of Cash Flows (Key items) (Yen in Millions) Net cash provided by (used in) operating activities Net cash used in investing activities Net cash used in financing activities Cash and cash equivalents, end of period Six months ended Six months ended September 30, 2013 September 30, , (21,724) (6,550) 6,068 (8,600) 51,629 61,574 In the Digital Entertainment segment of Konami Group, content for social networks, including DRAGON COLLECTION, continued to grow. Meanwhile, METAL GEAR SOLID: THE LEGACY COLLECTION and WORLD SOCCER Winning Eleven 2014 (known in the U.S. and Europe as Pro Evolution Soccer 2014), the latest title in the WORLD SOCCER Winning Eleven series, were also released, and Monster Retsuden ORECA BATTLE sold steadily. In our Health & Fitness segment, based on the concept you can continue, we updated our services for Konami Sports Clubs and we introduced a new pricing plan, which enables customers to select a pricing plan based on the number of times they use our facilities. We also made it easier for customers to use more than one facility. These efforts have been received favorably in the market. In our Gaming & Systems segment, sales of products such as the Podium video slot machine and the Advantage mechanical slot machine series continued to be received favorably mainly in the U.S. market. In the Pachinko and Pachinko Slot Machines segment, we launched a new product of pachinko slot machines called Contra 3D. In terms of the consolidated results for the six months ended September 30, 2013, net revenues amounted to 97,928 million, operating income was 3,771 million, income before income taxes and equity in net income of affiliated company was 4,217 million, and net income attributable to KONAMI CORPORATION was 2,016 million. For more detailed financial data, please visit the KONAMI website and look under the Financial Information page. 5 KONAMI IR Search

7 Hot News Groundbreaking Ceremony Held for Factory No. 2 in Las Vegas - Production Capacity for Casino Gaming Devices Will Double - KONAMI held a groundbreaking ceremony in Clark County, Nevada, on October 8, 2013 for a new factory to be operated by gaming device production and retail Konami Gaming, Inc. Factory No. 2 is due to be completed in the summer of 2015, and is located in close proximity to the Las Vegas headquarters of Konami Gaming Inc. and Factory No. 1. With a total floor space of 14,000 m2, the new factory will contribute to bringing production capacity to 2.3 times its previous level. The factory will be built to achieve the LEED certification (developed and operated by the U.S. Green Building Council) for facilities that acknowledge their environmental responsibilities, and will keep to a minimal energy usage in order to be as environmentally friendly a factory as possible. Chair of the Clark County Commission Steve Sisolak was in attendance at the groundbreaking ceremony along with other Clark County commissioners and affiliated persons. Mr. Sisolak took the podium to welcome the new factory and express his high hopes for the growth of the gaming industry that Factory No. 2 will bring. The Konami Group also includes Konami Australia Pty Ltd., which makes gaming devices and provides retail and other services to a range of markets, from Australia and New Zealand to Southeast Asia. Konami holds gaming licenses in a total of 357 states and territories worldwide, including in the U.S. and Australia, and is the only Japanese corporation with experience and know-how of the global gaming device production industry. Konami hopes that the establishment of this new factory will help boost the production and sale of gaming devices in Asia, the U.S., and elsewhere around the globe, and help us deliver new styles of entertainment to our customers worldwide. The groundbreaking ceremony in progress Rendition of completed Factory No. 2 6

8 Corporate Data (As of September 30, 2013) Company Name KONAMI CORPORATION Headquarters 9-7-2, Akasaka, Minato-ku, Tokyo , Japan TEL: FAX: Founded March 21, 1969 Incorporated March 19, 1973 Paid-in Capital 47,399 million Home Page URL Stock Information (As of September 30, 2013) Common Stock Authorized Outstanding Number of shareholders 50,845 The 10 Largest Shareholders 450,000,000 shares 143,500,000 shares (including 4,884,889 treasury shares) Shareholder Kozuki Foundation Kozuki Holding The Master Trust Bank of Japan, Ltd. (Trust Account) Japan Trustee Services Bank, Ltd. (Trust Account) Kozuki Capital Corporation Northern Trust Co. (AVFC) Sub A/C American Clients Sumitomo Mitsui Banking Corporation Trust & Custody Services Bank, Ltd. (Securities Investment Trust Account) BNP Paribas Securities (Japan) Ltd. Northern Trust Co. (AVFC) Re U.S. Tax Exempted Pension Funds Shares (Thousands) 16,600 15,700 13,110 8,565 7,048 4,599 4,017 2,311 2,210 1,940 Note: The above shareholding ratios are calculated after the deduction of treasury shares. % of Total Guide to Investor Relations Site Our website includes an investor relations section that provides easy access to our Shareholder Information Fiscal Year-End March 31 Ordinary General Meeting of Shareholders June Record Date for Shareholders Annual shareholders meeting: March 31 Year-end dividend: March 31 Interim dividend: September 30 Other (when necessary): As announced in advance Transfer Agent Sumitomo Mitsui Trust Bank, Limited 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan Location of Transfer Agent Handling Office Sumitomo Mitsui Trust Bank, Limited Stock Transfer Agency Department 1-4-1, Marunouchi, Chiyoda-ku, Tokyo, Japan Mailing Address Sumitomo Mitsui Trust Bank, Limited Stock Transfer Agency Department 2-8-4, Izumi, Suginami-ku, Tokyo , Japan Telephone Inquiries Internet URL Public Notices Stock Exchange Listings For ADR Holders Shown on the Company s website Tokyo, New York, and London Depositary and Transfer Agent for American Depositary Receipts: JPMorgan Chase Bank, N.A. 1 Chase Manhattan Plaza, Floor 58, New York, NY 10005, U.S.A. ADR Holder Contact: JPMorgan Service Center JPMorgan ADR Holder Transfer Services: Telephone Inquiries Toll-free U.S.A. & Canada Outside U.S.A Hearing impaired An automated IVR system is available 24 hours / 7 days a week. Representatives are available 8:00 am to 8:00 pm EST weekdays. Internet URL Visit and go to the Shareholder Services page. Mail for regular correspondence JPMorgan Chase Bank, N.A. P.O. Box 64504, St. Paul, MN , U.S.A. URL: KONAMI