Today Koei Tecmo announced its financial results for the first nine months of the fiscal year, related to the period between April and December 2024.
According to the financial presentation, sales for the whole company were 52,570 million yen, down 14% year-on-year. Operating profit was 15,075 million yen, down 25.8% year-on-year.
The company mentions that this is due to having only two new titles for consoles and PC in the period in question, while the previous year had three. On the mobile front, sales focused on existing games, while the previous fiscal year saw significant contributions from new games.
Looking at the Entertainment business segment by itself, sales were 48,794 million yen (a drop of 8,599 million yen compared to the previous fiscal year) and operating profit was 14,867 million yen (5,210 million yen less compared to the previous fiscal year).
Interestingly, physical full-game sales actually increased slightly year-on-year (by 241 million yen). Everything else including downloadable games, DLC, online games, and mobile games dropped.
The forecast for the full fiscal year remains unchanged at 90,000 million yen in net sales and 30,000 million yen in operating profit.
While the current numbers are only 58.4% and 50.3% of the full fiscal year prediction, the company will launch a whopping 5 games in the fourth quarter, including a major title.
These five games are Ninja Gaiden 2 Black, Dynasty Warriors: Origins, Venus Vacation Prism: Dead or Alive Xtreme, Atelier Yumia: The Alchemist of Memories & the Envisioned Land, and Winning Post 10 2025.
Ninja Gaiden 2 Black and Dynasty Warriors: Origins have already been released but are not included in today’s numbers, which are up to December 31, 2024. DW:O is likely the “major title” as it’s defined as the fiscal year’s flagship game later in the presentation.
Of course, Ninja Gaiden 4, which was announced a few days ago, is not included in the current fiscal year as it will release in the fall of 2025.
We also get an update of unit sales for the company’s major franchises, which you can see below.
For the future, Koei Tecmo aims to focus on improving game quality expecting that it’ll increase sales. It also aims for the long-term to “advance the establishment of an in-house marketing and publishing framework.”
“Expanding development capacity and improving production efficiency” is also seen as “foundational.”
To be specific, the company sees “quality” as the “level of detail and graphics, low number of bugs, level of optimization” and more.
The company is working on building a “multi-layered and stable portfolio” by developing numerous new games for release beyond the next fiscal year (which ends on March 2026), for example expanding the Ninja Gaiden series.
Multiplatform support is defined as the standard, with collaboration games and partnerships determined case-by-case.
Interestingly, the company mentions that its producers are tasked with making creativity and business coexist and “Profit is a reflection of customer’s expectations and support.” Basically, profit is the outcome resulting from how much “fun” the company creates.
Koei Tecmo has improved its position among the world’s top digital entertainment companies from 17th place in fiscal year 2022 to 14th place in fiscal year 2023. The ultimate goal remains to become number one.
This requires managing growth potential and profitability, achieving success in AAA games, new genres, and new IPs, and building a structure that allows to consistently create large-scale hit titles in-house.
The next long-term milestone is entering the top 10 digital entertainment companies in the world. This requires sufficient development structure, consistently launching large-scale titles every year, creating titles across diverse genres, and self-publishing regardless of the size of the game.
Previously, Koei Tecmo has let console manufacturers like Sony and Nintendo (and most recently Microsoft with Ninja Gaiden 4) publish its largest games outside of Japan. This, apparently, is going to change.
Many games are already in development for the next three-year term which starts in April 2025, with an overall portfolio similar to the three years that are about to end (6 major console and PC games of which 2 AAA, about 15 games up to mid-tier, and 8 mobile games split between in-house and licensed).
The new AAA studio announced last year has the goal to “consistently launch major titles in the future” and has already started development of its first game for consoles and PC, transcending the framework of Koei Tecmo’s traditional brands.
The regional strategy for PC and consoles is to strengthen the structure for the North America, Europe, and China/Asia regions, whole Koei Tecmo still plans to focus on Japan for a while for mobile, with plans for global expansion.
Looking ahead, the company also aims to develop markets such as in India and Southeast Asia, centered around Koei Tecmo Singapore.