Consolidated Results for the Six Months Ended
September 30, 2016 (Prepared in Accordance with IFRS)

October 28, 2016

KONAMI HOLDINGS CORPORATION

KONAMI HOLDINGS CORPORATION hereby announces that the consolidated total revenues and operating profit for the six-month period ended September 30, 2016 were ¥101,401 million (94.1% of the same period in the previous year) and ¥17,040 million (136.9% of the same period in the previous year), respectively.

Profit before income taxes and profit attributable to owners of the parent company were ¥16,248 million (133.3% of the same period in the previous year) and ¥12,217 million (155.7% of the same period in the previous year), respectively.

Effective from the six months ended September 30, 2016, we carried out a business restructuring to combine the arcade games business segment, which formed part of our Digital Entertainment Business, with another BtoB business, the Pachislot & Pachinko Machines Business, and the segment classification was changed to the “Amusement Business” in order to further strengthen our business operating structure. As a result, reportable segment classifications have been changed effective from the six months ended September 30, 2016. For the purpose of comparison to the six month ended September 30, 2015, figures for the six month ended September 30, 2015 have been reclassified under the new segment classification, and compared with those for the six month ended September 30, 2016.

In Digital Entertainment business, mobile games, including "JIKKYOU PAWAFURU PUROYAKYU," "PROFESSIONAL BASEBALL SPIRITS A (Ace)," and "Winning Eleven CLUB MANAGER" (overseas name: "PES CLUB MANAGER"), continued to enjoy steady sales. In addition, "Yu-Gi-Oh! TRADING CARD GAME" continued to be developed in the global market, including its holding of the global tournament. As for computer and video games, we released "Winning Eleven 2017" (overseas name: "PES 2017 - Pro Evolution Soccer -"), following on with the releases of "JIKKYOU PAWAFURU PUROYAKYU 2016," and "UEFA EURO 2016/Winning Eleven 2016" (overseas name: "PES 2016 - Pro Evolution Soccer -"). These factors resulted in an increase in revenues and operating profit compared to the same period in the previous year.

In Health & Fitness business, we continued to develop our pricing and membership plans that enable customers to select the most suitable options based on their personal usage frequency and facilities they wish to use. We also made ongoing efforts to promote and spread Konami Sports Club services that support the concept of "sustainable fitness," through means such as introduction of completely renewed studio exercise programs offered at sports club facilities, and provision of a rich array of studio exercise programs to cater to diversifying customer needs. Overall, although sales from this business decreased mainly due to the previous fiscal year closing of facilities operated directory, such measures have resulted in a decrease in revenues and an increase in operating profit compared to the same period in the previous year.

In Gaming & Systems business, sales of products, such as the new "Concerto" cabinet for video slot machines, the Podium series and "SYNKROS" casino management system, continued steadily, against the backdrop of intensified competition in the North American market due to the entry of European manufacturers. As a result, the business sees an increase in revenues and operating profits on local currency basis. In Japanese yen of the Company’s presentation currency, however, the business sees a decrease in revenues and operating profit compared to the same period in the previous year.

In Amusement business, "e-AMUSEMENT Participation" arcade games, including "MAH-JONG FIGHT CLUB ZERO" and music genre games, continued to operate steadily. We also released the new pachislot machine "SEVEN'S BEAT" in collaboration with the music simulation game "beatmania." Due to the new products being released for this fiscal year mainly scheduled for the third quarter or later, however, the business sees a decrease in revenues and operating profit compared to the same period in the previous year.


1. Consolidated Results of Operation

(Millions of yen)
 
Six Months ended
September 30, 2016
Six Months ended
September 30, 2015
Revenue
101,401
107,718
Operating Profit
17,040
12,444
Profit Before
Income Taxes
16,248
12,186
Profit Attributable to Owners
of the Parent Company
12,217
7,847

2. Business Segment Information - Revenue

(Millions of yen)
 
Digital Entertainment
Health & Fitness
Gaming & Systems
Amusement
Eliminations
Total Revenue
Six Months ended
September 30, 2015
43,718
35,889
14,979
13,376
-244
107,718
Six Months ended
September 30, 2016
44,894
35,023
13,789
7,938
-243
101,401
% of previous year
102.7
97.6
92.1
59.3
94.1

3. Business Segment Information - Operating Profit

(Millions of yen)
 
Digital Entertainment
Health & Fitness
Gaming & Systems
Amusement
Corporate and Eliminations
Other Income and
Other Expenses, net
Total Operating Profit
Six Months ended
September 30, 2015
10,171
1,506
1,732
2,771
-1,856
-1,880
12,444
Six Months ended
September 30, 2016
15,469
2,641
1,589
1,799
-1,850
-2,608
17,040
% of previous year
152.1
175.4
91.7
64.9
136.9

4. Overview of the Six Months Ended September 30, 2016

Digital Entertainment Business

  1. Strong performance of mobile games, including "JIKKYOU PAWAFURU PUROYAKYU " which surpassed 26 million downloads, with the holding of "PAWAPURO Festival 2016 " to mark "the day of PAWAPURO " on August 26, and "PROFESSIONAL BASEBALL SPIRITS A (Ace) "
  2. Steady sales of other mobile game series, such as the WORLD SOCCER COLLECTION and Professional Baseball Dream Nine series
  3. Solid performance of mobile games for the global market, such as "Star Wars™: Force Collection, " and "Winning Eleven CLUB MANAGER " (known overseas as "PES CLUB MANAGER ")
  4. Steady sales of the the Yu-Gi-Oh! TRADING CARD GAME series in the global market, and favorable reception of the world tournament held in the U.S. in August 2016
  5. Release of the latest console title in the PAWAPURO series "JIKKYOU PAWAFURU PUROYAKYU 2016 " which enjoyed strong sales driven by the synergistic effect with the mobile game
  6. Release of "Winning Eleven 2017 " (known overseas as "PES 2017 - Pro Evolution Soccer - "), the latest addition to the series, in September 2016, following on from the release of "UEFA EURO 2016/Winning Eleven 2016 " (known overseas as "PES 2016 - Pro Evolution Soccer - ")

Health & Fitness Business

  1. Enhanced services to meet diversifying customer needs, through means such as pricing plans enabling customers to select the most suitable options based on their personal usage frequency, and a per-use plan for customers who are unable to visit facilities regularly
  2. Introduction of completely renewed studio exercise programs offered at sports club facilities, and development of an array of programs to meet diversified customers needs, including "Core Cross," a self-developed program for core training and programs for the purpose of relaxation and shaping-up
  3. Broadened recognition of Konami Sports Club and increased acquisition of new members of gymnastics and swimming school programs for children contributed by the athletes affiliated with the Konami Sports Club Gymnastics and Swimming Teams participated as representatives of Japan at the Rio de Janeiro Olympics
  4. Commenced a new franchise facility in Amakusa City, Kumamoto Prefecture in July 2016, and reopened Konami Sports Club Kumamoto in August 2016, which had been temporary closed due to the 2016 Kumamoto Earthquake
  5. Started operation of 29 new contract-based public sports facilities in April 2016
  6. Decreased sales due to a reduction in the number of facilities with management outsourced to Konami Group in the previous fiscal year. On the other hand, reduced expenses due to improved operational efficiency

Gaming & Systems Business

  1. Favorable sales of the Podium series, including the new "Concerto " cabinet for video slot machines in North America
  2. Maintained stable earnings from participation agreements by introducing an expanded lineup of premium products and game content, such as "Podium Goliath ," a larger size version of Podium
  3. Steady introduction of the "SYNKROS " casino management system into casinos, including a leading tribal casino located near San Diego, as well as continued installations in large cruise ships in service overseas
  4. Solid performance in the North American market and increases in revenues and operating profits on local currency basis. On the other hand, decreases in revenues and operating profits compared to the same period in the previous year due to the effect of exchange rate changes by the rising yen

Amusement Business

  1. Steady operation of "e-AMUSEMENT Participation " arcade games, including "MAH-JONG FIGHT CLUB ZERO " and music genre games
  2. Maintained favorable operation of the online match quiz game "Quiz Magic Academy Tokyo Grimoire, " with the official tournament of "QMA JAPAN TOUR 2016 "
  3. Received solid repeat orders for "MAGICAL HALLOWEEN 5, " a pachislot machine released in the previous fiscal year, and release of the new pachislot machine "SEVEN'S BEAT " in collaboration with the music genre game "beatmania "
  4. Limited sales in the current term because new product releases for this fiscal year are mainly scheduled for the third quarter or later

*Statements made in this news release reflect information available on the date of its announcement, and is subject to change without prior notice.