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Konami reports second year of record growth as pre-tax profit climbs 12.5% YoY

Konami has reported a fifth consecutive year of profit and a second year of record growth in its FY19 earnings report despite “concerns” about “the declining global economy”, including “U.S.-China trade frictions, instability in the Middle East and the Brexit impasse”.

For the year ending March 31st, 2019, the company reported ¥262.5 billion ($2.37 billion) in revenue, up 9.6 per cent year-on-year. Operating profit, meanwhile, also climbed by 11.8 per cent to ¥50.5 billion ($456 million), giving a profit before tax of ¥44.7 billion ($404 million), up 12.5 per cent on last year.

Konami’s most successful area of business was once again its digital entertainment segment, within which its video games business sits. Up 17.8 per cent on last year, revenue came in at ¥141.7 billion ($1.28 billion). The company’s amusement and gaming businesses both saw growth, too, pushing revenue up by 10.6 per cent and 5.2 per cent respectively. It’s sporting activities – previously known as Health & Fitness –  however, fell a little, dropping 3.8 per cent YoY.

“In the game industry, new experiences through game content are being offered in various ways, including eSports, which is regarded as a form of sports competition and is becoming well-known to a wide range of users and attracting more and more fans,” the report stated.

“With the spread of entertainment offered through networks, the available means of providing games continue to diversify,” it added. “Opportunities to reach an even greater audience for games are increasing. Against this background, we intend to develop ways of playing games that match the characteristics of each device.”

The report goes on to outline its commitment to mobile gaming, including LovePlus Every, Dankira!!! – Boys, Be Dancing!, and confirmed it will be co-hosting the eJ.League Winning Eleven 2019 season for the mobile version of Winning Eleven 2019 (known as PES internationally), which saw a revenue boost following a refreshed marketing campaign that also positively affected the PC/console version of PES and online mode, myClub.

It also mentioned “an exclusive, download-only title for the Nintendo Switch, Yu-Gi-Oh! Duel Monsters Legacy of the Duelist: Link Evolution” and its baseball titles, Professional Baseball Spirits/Pro Yakyuu Spirits 2019 and Jikkyou Pawafuru Puroyakyu, which “is intended to be released for the Nintendo Switch”.

Looking ahead, the Japanese developer/publisher expects a modest revenue rise of 2.8 per cent for FY20, with profits expected to increase once again, this time by 2.9 per cent to ¥52 billion ($470 million).

Konami recently rebranded its New York office to Konami Cross Media NY Inc. in a bid to move away from 4Kids Entertainment, the company that provided the English dub on the Yu-Gi-Oh anime series before Konami acquired it in 2012. It also recently announced a new range of “classics collections” to celebrate its 50th anniversary – Arcade Classics Anniversary Collection, Castlevania Anniversary Collection, and Contra Anniversary Collection.

The company is also establishing a new Tokyo base for its esports activities which is expected to include not just offices, but also classes, shops, and an esports arena, too. The construction of the Konami Creative Center (KCC Ginza) is hoped to complete in time for the Tokyo Olympics in 2020. The brand new premises in Ginza will sit across 12-floors, including an underground one, and boast state-of-the-art sound, video, lighting, and communications systems.

The move into the new premises is anticipated to take place in Q1 2020 and is expected to cost the company ¥5 billion ($45.2 million), which includes “rent expenses for the period after leaving the current rental building”, which the company seemingly has to pay until the fiscal year ending March 31st, 2021. However, as it is relocating to an owned building, the company expects a decrease in rent expenses as a result of the relocation which will increase profit thereafter.

About Vikki Blake

It took 15 years of civil service monotony for Vikki to crack and switch to writing about games. She has since become an experienced reporter and critic working with a number of specialist and mainstream outlets in both the UK and beyond.

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