Konami : Report FY2020

Fiscal 2020 Konami Group Report

April 1, 2019 - March 31, 2020

KONAMI HOLDINGS CORPORATION

To Our Shareholders

On behalf of the Konami Group, I would like to express our gratitude to all of our shareholders for their ongoing support.

Before any other matters, I extend my deepest sympa-thies to all those who have contracted or have been affected by COVID-19. In addition, I offer my utmost respect to the healthcare professionals on the front lines working to prevent the spread of this infection.

Since its founding in 1969, the Konami Group has always had a pioneering spirit and the foresight to understand the world's needs. By keeping abreast of the changing trends and technologies, it has continued to read the waves and ride them at their peak.

In the entertainment field, our businesses will continue to expand as we move into the future with the advancement of electronics such as mobile devices and home game con-soles, as well as with the emergence of new distribution plat-forms that utilize cloud technology. What is more, with the evolution of technologies such as AI, 5G, and blockchain, as well as the increasing recognition of esports as a sporting event, we expect the market to be revitalized by inventive new ways to enjoy games. In addition, the growing trend toward digitalization and online consumption has led to the expan-sion of subscription-based businesses, creating an environ-ment for improved profitability and robust business results.

In a move relevant to the sports market, the national gov-ernment formulated Japan's second Sport Basic Plan and is promoting initiatives to realize a society where the majority of people actively participate in sports. In an aging society, extending life expectancy has never been more important and there is a growing need for and interest in sports as a whole.

In such an environment, and as a group that provides products and services in both entertainment and sports, ourtarget business markets are showing significant growth, with opportunities for further expansion on the rise as well.

In addition to aiming for long-term growth as a company, we believe that it is increasingly important to integrate ESG (environmental, social, and governance) into our operations from the perspective of sustainable social development.

By working together with our stakeholders to achieve both business growth and a sustainable society, we aim to be an enterprise that both elicits high expectations from and is deemed necessary by society.

As we work toward this goal, we would like to ask for the continued support of all of our shareholders.

Kimihiko Higashio

Representative Director, President

Consolidated Financial Highlights

Note: Figures are in accordance with International Financial Reporting Standards (IFRS).

ച্ߴTotal Revenue

(¥ billion)

300

262.5

262.8

249.9

229.9

239.5

2,182

200

100

0

'16

'17

'18

'19

Profit Attributable to Owners of the Parent

'20

(Fiscal years ended March 31)

(¥ billion)

300

In terms of the consolidated results for the fiscal year ended March 31, 2020, total revenue amounted to ¥262,810 million (a year-on-year increase of 0.1%), operating profit was ¥30,972 million (a year-on-year decrease of 38.7%), profit before income taxes was ¥30,395 million (a year-on-year decrease of 39.6%), and profit attributable to owners of the parent was ¥19,892 million (a year-on-year decrease of 41.8%).

200

100

0

40 30 20 10 0

34.2

30.5

26.0

19.9

10.5

'16

'17

'18

'19

'20

(Fiscal years ended March 31)

In the Digital Entertainment Business, mobile games such asYu-Gi-Oh! DUEL LINKS,eFootball Winning Eleven 2020(known overseas aseFootball PES 2020), andPROFESSIONAL BASEBALL SPIRITS A (Ace)continued to perform favorably in Japan and overseas. Meanwhile, as part of our contin-ued efforts in esports, we hosted the final round of thePAWAPURO APP CHAMPIONSHIPS2019 season, an esports tournament that decides the best players in theJIKKYOU PAWAFURU PUROYAKYUseries.

In the Amusement Business,MAH-JONG FIGHT CLUB GRAND MASTER, BOMBERGIRL,and other video games continued to perform strongly. Fur-thermore, in the fiscal year under review, we also began operation of medal

Operating Profit

(¥ billion)

60

40

36.4

24.7

20

0

'16

'17

ROE (Return on Equity)

45.2

'18

(%)

300

16

200

100

12 8 4 0

0

'16

'17

'18

games such asColorCoLotta: Aim for the win! Dream Treasure Island and SMASH STADIUM, released the prize gameTREASURE ROAD, and launched the latest titles in two popular series,Magical Halloween 7 and SKYGIRLS: Wings of Zero.

In the Gaming & Systems Business, video slot machines such asKX 43TM, a new upright cabinet, and theConcertoTMseries of machines enjoyed ongoing strong sales. Moreover, theSYNKROS®casino management sys-tem also continued to be steadily introduced on large cruise ships and with casino operators in the North American and Oceanian markets.

In the Sports Business, we took steps to provide customers with the tools to achieve fit lifestyles, which included making changes to our personal improvement programs. In addition, we opened our "Small-Group Swimming School" at two locations in Tokyo. At these schools, individual training is provided by former members of Japan's national swimming team employed as coaches. We also continued to expand our lineup in each category of our "Konami Sports Club Original" brand and other sports-related products.

For more detailed financial data, please visit the KONAMI website and go to the Financial Information page.https://www.konami.com/ir/en/ir-data/

50.5

31.0

'19

'20

(Fiscal years ended March 31)

'19

'20

(Fiscal years ended March 31)

Topics

eBASEBALL PAWAFURU PUROYAKYU 2020Nears Release Date

KONAMI's Long-Beloved Baseball Content

The newest title in theJIKKYOU PAWAFURU PUROYAKYUseries,eBASEBALL PAWAFURU PUROYAKYU 2020, is slated for release on July 9, 2020.

ThePAWAPUROseries is KONAMI's flagship series of base-ball games, enjoyed for over 25 years since its first console game release in 1994. In 2018, KONAMI began co-hosting theeBASEBALL Pro Leaguein cooperation with the Nippon Pro-fessional Baseball Organization (NPB), and an early decision has been made to run the league for a third year. The series is the subject of attention for producing esports competition titles.

eBASEBALL PAWAFURU PUROYAKYU 2020has added elements that increase its appeal. For the first time, "Powerful Festival," "LIVE Scenario," and "EIKAN NINE" modes are available on the Nintendo Switch™, and for the first time on PlayStation®4, up to four people can enjoy co-op play with family and friends.

KONAMI will continue to deliver attractive products and ser-vices full of fun to an even greater number of customers.

Amusement

Presenting Our Flagship Model-The Pinnacle of Gameplay Environments

Thebeatmania IIDX LIGHTNING MODEL

The newest cabinet model in KONAMI's popular rhythm game seriesbeatmania IIDXis currently in operation in amusement facilities across Japan, to favorable reviews.

This model is the first in the BEMANI series to come with a 120Hz monitor, and has features that include much-demanded light-touch buttons and a new turntable with an adjustable level of spin, allowing the player to enjoy the pin-nacle of gameplay environments. In addition, the enveloping design, which surrounds the player with sound effects, and LED light decorations that flash based on the music bring more ambiance to the experience than ever before.

What is more, the cabinet has garnered attention in the esports market, having been chosen as a competition title in the BEMANI PRO LEAGUE, Japan's first professional league for rhythm games.

KONAMI will continue to use its cultivated knowledge to develop innovative rhythm games and bring life to amuse-ment facilities.

DebutingDIMENSION 49J™-The Latest in 4K Video Slot Machines

Unveiled at the Industry's Largest Exhibitions

In 2019,DIMENSION 49J™, KONAMI's latest 4K video slot machine cabinet, premiered at two of the world's largest gaming industry events: Global Gaming Expo (G2E) Las Vegas and ICE London, receiving high praise from the many industry representatives in attendance.

The cutting-edgeDIMENSION 49J™ cabinet features a 49-inch, ultrahigh-definition screen. We also presented some of our other products at these events in a manner never before seen, with multiple slot machines revealed together with large animated displays and custom chairs fitted with monitors on the back, effectively raising interest in the machines' new elements and establishing a powerful pres-ence that garnered major attention on the exhibition floor.

We will continue to develop innovative products to provide people around the world with new ways to enjoy themselves and to add value to their daily lives.

Helping People Achieve a Tight and Functional Core

Introducing Our New Training Program, BEST CORE

KONAMI has introduced BEST CORE, a new personal train-ing program aimed at developing a tight and functional core (abdominal muscles and lower back). This is the fifth per-sonal program provided by Konami Sports Club.

The program's most distinctive feature is the "core condi-tioning cycle," Konami Sports' proprietary training method, which has been lauded by a wide range of customers, includ-ing those who are self-conscious about their spare tire, those looking to develop a strong six-pack, or those seeking a competitive edge.

In addition, we are aggressively promoting the develop-ment of home fitness products, such as the latest model in our Aero Bike line of home fitness bicycles, the Aero Bike EXS, equipped with Bluetooth®functionality. The bike is currently planned for release in summer 2020.

In the future, we will continue to provide products and ser-vices that meet the needs of our customers and support them as they work to achieve their ideal body and health goals.