Bandai Namco Holdings Inc. FY23 Performance Overview

Financial Performance Overview

Bandai Namco’s financial performance for FY2023 (April 1, 2022, to March 31, 2023) indicates a period of growth coupled with strategic investments and challenges.

• Total Revenue: JP¥990,089 million, an 11.34% increase from FY2022.
• Gross Profit: JP¥368,656 million, a 3.48% increase.
• Operating Profit: JP¥116,472 million, a 7.19% decrease.
• Net Profit: JP¥90,345 million, a 2.60% decrease.
• EPS: JP¥136.88, a 2.71% decrease.
• Total Equity: JP¥652,133 million, an 11.62% increase.

The company’s revenue is primarily driven by its diversified business segments:

• Digital Business: JP¥385,681 million (38.95%)
• Toys and Hobby Business: JP¥447,491 million (45.20%)
• IP Production Business: JP¥81,748 million (8.26%)
• Amusement Business: JP¥104,602 million (10.56%)

Regional Sales Distribution

Bandai Namco’s sales distribution highlights its strong presence in Japan and significant contributions from international markets:

• Japan: JP¥577,998 million (58.38%)
• Americas: JP¥172,517 million (17.42%)
• Europe: JP¥117,526 million (11.87%)
• Asia: JP¥122,047 million (12.33%)

Dividend Information

Despite a slight reduction in per-share dividends, Bandai Namco continues to provide substantial returns to its shareholders:

• Per Share: JP¥206, a slight decrease from JP¥212 in FY2022.
• Total Declared Dividends: JP¥45,337 million.

Criticism and Challenges

Bandai Namco faced several challenges and criticisms during FY2023, impacting its operations and public perception:

1. Localization Changes: The alteration of a scene in “Tales of Berseria” to comply with regional regulations was met with fan backlash. Bandai Namco emphasized the necessity of these changes to maintain the game’s distribution and promotional opportunities.
2. Cybersecurity Incident: In July 2022, a ransomware attack compromised internal systems, potentially exposing customer information. The company took measures to block server access and prevent further damage.
3. Legal Disputes: A lawsuit against AtGames for unauthorized production of a Ms. Pac-Man mini-cabinet disrupted negotiations with original developers. The lawsuit cited false advertising, unfair competition, and copyright infringement.
4. AI Allegations: In December 2023, Bandai Namco faced backlash over the English dub of Naruto x Boruto: Ultimate Ninja Storm Connections, with fans alleging that AI was used to alter voice lines, resulting in peculiar inflections.

Strategic Initiatives

Bandai Namco’s mid-term strategy, the IP Axis Strategy, focuses on leveraging intellectual property (IP) to enhance fan engagement and value creation:

1. IPxFan: Connecting with fans through new frameworks.
2. IPxValue: Enhancing IP value and accelerating its evolution.
3. IPxWorld: Building a global business under the “ALL BANDAI NAMCO” concept, including investments in the IP Metaverse and new IP creation.

These initiatives are aimed at sustaining growth and ensuring the company’s long-term viability in the competitive entertainment industry.

Recent Developments

A significant development these days was the launch of the PAC-MAN Simulator on Roblox, in collaboration with Supersocial. This initiative bridges generational gaps and enhances community engagement through a reimagined PAC-MAN experience. The simulator allows players to consume dots, collect PAC-MAN skins, and challenge Ghosts to unlock new areas and gain exclusive rewards. This collaboration underscores Bandai Namco’s commitment to innovation and adapting classic franchises to modern platforms.

Conclusion

Bandai Namco Holdings Inc. has demonstrated a mixed financial performance for FY2023. While the company has seen growth in revenue and total equity, the decline in ROCE and challenges in operational efficiency highlight areas for improvement. The strategic focus on IP and community engagement positions the company for potential future growth. Despite the challenges, Bandai Namco’s commitment to innovation and reinvestment reflects its ambition to remain a leading player in the global entertainment industry.