KONAMI GROUP CORPORATION

Business Details

Engages in the planning, production, manufacturing, and sale of digital content and related products, including mobile games, home video games, and card games. In Japan, Konami Digital Entertainment Co., Ltd. handles the business, while overseas, Konami Digital Entertainment, Inc. and others are responsible. The segment deploys flagship IPs such as eFootball™, Pro Yakyuu Spirits A (Ace), and Yu-Gi-Oh! Master Duel across multiple devices, and also focuses on expanding its fan base through esports. This is the most important segment, accounting for approximately 75% of the Group's consolidated net sales.

Recent Overview

Strong performance from flagship content drove significant increases in both segment net sales and business profit, marking a record high for the third consecutive fiscal year

In FY2026 (ending March 2026), the Digital Entertainment Business recorded net sales of ¥370,950 million (up 21.5% year on year) and business profit of ¥136,006 million (up 37.5% year on year). Flagship titles such as eFootball™ (cumulative downloads exceeding 1 billion), Pro Yakyuu Spirits A, and Yu-Gi-Oh! Master Duel continued to perform well. The new title "METAL GEAR SOLID Δ: SNAKE EATER" surpassed 2 million units in cumulative worldwide shipments, and "SILENT HILL f" also received favorable reviews both domestically and internationally. The global expansion of esports tournaments also broadened the fan base.

Key Products

Growth Drivers

• Continued strong performance and expanded monetization revenue from flagship mobile game titles centered on eFootball™ (cumulative downloads exceeding 1 billion)
• Strengthened international expansion of baseball game IP through the appointment of Shohei Ohtani as cover athlete and the MLB global partnership
• Expansion of the global fan base through esports tournaments (FIFAe World Cup, WBSC tournaments, Yu-Gi-Oh! World Championship, etc.)
• Increased product net sales from new home video game titles such as "METAL GEAR SOLID Δ: SNAKE EATER" and "SILENT HILL f"
• Capturing new demand through support for new platforms, such as "eFootball™ Kick-Off!" for Nintendo Switch™ 2
• Diversification and stabilization of the revenue base through a multi-device, multi-IP strategy

Risks

• Risk of revenue concentration in flagship titles (poor performance of eFootball™ etc. directly impacts results)
• Risk of intensifying competition and stricter monetization regulations in the mobile game market
• Foreign exchange risk (high proportion of overseas sales, with earnings pressured during yen appreciation)
• Risk of declining profit margins due to rising game content production costs
• Risk of existing content becoming obsolete amid the rapid spread of AI and new technologies

Business Details

Effective October 1, 2025, the arcade game business of Konami Amusement Co., Ltd. was transferred via absorption-type company split to the newly established Konami Arcade Games Co., Ltd., and is now disclosed as an independent reportable segment. The segment develops video games, medal games, and prize games, with domestic and overseas amusement facility operators as its main customers. It promotes market vitalization through product deployment utilizing KONAMI's popular IPs and through esports tournament operations. Note that the gaming machine business has been transferred to the "Other" segment.

Recent Overview

Net sales up 9.6% and business profit up 4.8%, showing steady growth, contributed to by the introduction of new IP titles

In FY2026 (ending March 2026), the Arcade Game Business achieved net sales of ¥26,353 million (up 9.6% year on year) and business profit of ¥6,779 million (up 4.8% year on year). Supported by a gradual improvement in the domestic economy, the overall market trended steadily. New product launches contributed to results, including the start of operation of "pop'n music High☆Cheers!!," the exhibition of "Demon Slayer: Kimetsu no Yaiba Nichirin Battle Slash" at AMUSEMENT EXPO 2025, and the release of the "Momotaro Dentetsu World" medal game. Full-scale operation of "Demon Slayer: Kimetsu no Yaiba Nichirin Battle Slash" is planned for the next fiscal year.

Key Products

Growth Drivers

• Increased customer traffic from the start of operation of new arcade games utilizing highly popular anime IPs such as "Demon Slayer: Kimetsu no Yaiba Nichirin Battle Slash"
• Maintaining and expanding the number of installed units and utilization rates through the introduction of the latest titles in the BEMANI series (pop'n music, etc.)
• Continued deployment of prize games utilizing popular IPs such as Yu-Gi-Oh! and the online lottery "Konami Premium Kuji ONLINE"
• Expansion of overseas net sales through the continued introduction of redemption games for the North American market
• Improved brand awareness and fan base expansion through esports deployment via the BEMANI PRO LEAGUE
• A gradual recovery trend in the domestic amusement market

Risks

• Risk of maturation and contraction of the domestic amusement market and suppression of consumer entertainment spending due to rising prices
• Intensifying product competition with competitors leading to pricing pressure and a decline in installed unit market share
• Long-term decline in amusement facility visitor numbers due to the declining birthrate and shrinking population
• Changes in business scale compared to the former Amusement Business due to the transfer of the gaming machine business to the "Other" segment as a result of the October 2025 segment reorganization
• Risk related to content procurement due to rising licensing costs for popular IPs and competition with other companies' IPs

Business Details

An overseas-focused segment centered on Konami Gaming, Inc. and Konami Australia Pty Ltd, engaged in the production, manufacturing, sale, and servicing of gaming machines such as slot machines and the casino management system "SYNKROS®." The main sources of revenue are replacement demand at existing casino facilities and demand from newly opened facilities in North America and Australia, and the company is also promoting business expansion into VLT, HHR, and iGaming. In FY2026 (ending March 2026), U.S. tariff measures and demand hesitation ahead of the launch of a new cabinet affected results, leading to a slight increase in net sales but a significant decline in business profit.

Recent Overview

Net sales rose slightly, but business profit fell sharply by 50.4% year on year

In FY2026 (ending March 2026), net sales were ¥43,077 million (up 1.0% year on year), remaining largely flat, while business profit fell sharply to ¥3,650 million (down 50.4% year on year). The main causes were rising manufacturing costs due to U.S. tariff measures and temporary demand weakness due to customer hesitation ahead of the launch of the new "Solstice™" cabinet. On the other hand, the new cabinet received high market recognition, including an award at the Global Gaming Expo, and the company has also laid the groundwork for medium- to long-term growth, such as expanding the number of facilities using SYNKROS® and securing orders in the Illinois VLT market.

Key Products

Growth Drivers

• Improved product competitiveness through the full-scale rollout of the new "Solstice™" cabinet series and recovery of demand that had been held back
• Expansion of machine sales opportunities through new casino openings and replacement demand at existing facilities in North America and Australia
• Accumulation of management system revenue through the expansion of facilities using SYNKROS® and the development of new features such as extending "SYNK Vision™" to table games
• Expansion into specialty markets such as VLT, HHR, and Class II (including securing VLT orders in Illinois)
• Accelerated digital deployment of popular content through entry into iGaming (Konami Online Interactive)
• Revenue contribution in future periods from decisions to install SYNKROS® at multiple casino facilities

Risks

• Rising manufacturing costs and sales impact due to U.S. tariff measures (already materialized in FY2026, significantly pressuring business profit)
• Temporary demand decline due to customer hesitation ahead of new cabinet launches (occurred before the Solstice™ launch, with recovery expected from the next fiscal year onward)
• Intensifying market competition due to a succession of new product launches by competitors
• Uncertainty in the pace of market expansion due to changes in casino regulations or delays in legalization
• Foreign exchange risk (the majority of net sales are denominated in U.S. dollars and Australian dollars)
• Risk of continued deterioration in cost structure, as the business profit margin has sharply declined from 17.2% in the prior fiscal year to 8.5%

Business Details

With Konami Sports Co., Ltd. as its main subsidiary, the segment operates a diverse range of services including sports club operation, the kids' sports school "Undou Juku" (Kids' Sports School) (swimming, gymnastics, dance, soccer, tennis, golf, etc.), the machine Pilates studio "Pilates Mirror," the personal training gym "Personal 30," contracted services for local governments, and contracted school swimming classes. While the market is on an expanding trend against a backdrop of rising health consciousness, rising prices and energy costs are affecting the business environment. Net sales account for approximately 10% of the consolidated total.

Recent Overview

Net sales up 1.9% and business profit up 52.9%, with a significant improvement in profitability

In FY2026 (ending March 2026), the Sports Business achieved net sales of ¥49,484 million (up 1.9% year on year) and business profit of ¥3,411 million (up 52.9% year on year). While net sales growth was modest, business profit improved significantly. "Pilates Mirror" newly opened 32 stores, expanding to a total of 85 stores. In the contracted services business, the company successively began operating new facilities, and also expanded the number of schools for contracted school swimming classes. The dance selection team's second-place finish at the world championship also contributed to enhancing the brand image of the school business.

Key Products

Growth Drivers

• Market expansion driven by rising health consciousness and diversification of business formats and services
• Aggressive new store openings for new business formats such as "Pilates Mirror" and "Personal 30" (Pilates Mirror expanded to a total of 85 stores)
• Expansion of contracted management of local government sports facilities and contracted school swimming classes to more schools
• Network expansion through an asset-light contracted service business model
• Improved member satisfaction and strengthened customer base through the introduction of new services such as the "Navi Series"

Risks

• Increased operating costs due to rising prices and energy costs
• Risk related to membership trends and customer attrition (continued impact following membership fee revisions)
• Impact on facility usage numbers due to the declining birthrate, aging population, and demographic changes
• Intensifying price and service competition with competitors (fitness gyms and sports clubs)
• Impairment loss risk (impairment losses on property, plant and equipment, goodwill, and intangible assets are recorded under other income and other expenses)