Bandai Namco Announces Restructuring for 2021: Gaming Business Will Merge With Toys & Hobby Business

Today Bandai Namco announced its financial results for the first quarter of the fiscal year, related to the period between April 1 and June 30.

Speaking of the company as a whole, both net sales and operating profit were sensibly lower year-on-year (respectively -8.9 and -12.8%).

Nearly all of the company’s businesses were impacted negatively excluding the Network Entertainment business (which means video games). Gaming net sales were up 9.3% year-on-year while profit was up a whopping 35.2%.

The tables below showcase the fact that while network content (mostly mobile and browser games) had the bigger slice of the gaming pie in terms of sales, home video games is the segment where most of the growth happened.

On top of that, Europe is the biggest market for Bandai Namco in terms of home video game sales, and for the whole fiscal year, the company predicts to sell nearly twice as many copies in the Old Continent than in the Americas and over five times as many than in Japan.

The Japanese version of the press release had more details on the Network Entertainment business.

Speaking of mobile games, Dragon Ball and One Piece titles that have expanded worldwide on top of games operating in Japan like The Idolmaster have performed well.

Speaking of home video games, titles released in past quarters like Dragon Ball titles including Dragon Ball Z Kakarot, Tekken 7, and the Dark Souls series, have been popular mainly outside of Japan due to increased digital download demand.

On top of this, the company announced that it’ll postpone its next mid-term business plan. It will start in April 2022 instead of April 2021 as it was previously planned.

“Going forward, as customers’ lifestyles and sense of value are expected to undergo substantial changes and in light of changes in our business environment and the results and challenges of the current Mid-term Plan, the Company has determined that it is necessary to formulate the next Mid-term Plan, which will serve as a new approach for BANDAI NAMCO in a new era. From the fiscal year ending March 31, 2021 of the currently progressing plan through the fiscal year ending March 31, 2022, the Company will formulate the next Mid-term Plan and has positioned it as a period for preparing the business foundation and organizational structure for promoting our business strategies.

In addition, as the novel coronavirus disease (COVID-19) continues to spread and impact society and the entire economy, the future outlook remains unclear. Given this unclear environment, there are many uncertainties, and if the Company were to formulate and present the next Mid-term Plan assuming it would start from the fiscal year ending March 31, 2022, the Company has determined that there would be concerns over the reliability of the plan.”

The last announcement is perhaps the most interesting, as the publisher announced a reorganization of the group structure which involves the gaming business. It will be merged with the Toys and Hobby business.

This change will be effective as of April 1, 2021.

“Ahead of starting the next Mid-term Plan in April 2022, the Company will combine the Toys and Hobby Unit and Network Entertainment Unit as well as the Visual and Music Production Unit and IP Creation Unit in April 2021. The Real Entertainment Unit will work to create a business base that can generate steady earnings looking toward the next Mid-term Plan.

In order for the BANDAI NAMCO Group to continue achieving sustainable medium- and long-term growth, it is necessary to strengthen the IP axis strategy globally. Therefore, the Company must quickly respond to changes in the environment, boost the capability to create IP and increase competitiveness in global markets.

By combining Units, the Company will build a structure that enables close cooperation and further integration of the businesses around the world under the ALL BANDAI NAMCO concept.

Through the combination of the Toys and Hobby Unit, which focuses on the business of physical products, and the Network Entertainment Unit, which focuses on the business of digital content, the Company will promote closer
coordination of business activities centered around the IP axis and cooperation and expansion that mutually utilize a wide range of outputs, while enhancing our creation of entertainment and strengthening the digital transformation corresponding to customers’ new sense of value. With these changes, the Company aims to increase competitiveness in global markets.

Through the combination of the Visual and Music Production Unit, which carries out IP creation and production, and the IP Creation Unit, whose mission is IP creation, the Company will consolidate the studio and production functions and strengthen the IP creation function so that it can generate synergies through a wider range of collaborations outside of the Unit, such as with the Group’s businesses and external partners.”

Below you can find a summary of the current structure and the new one.

[Current Unit Structure] → Five Units

• Toys and Hobby
• Network Entertainment
• Real Entertainment
• Visual and Music Production
• IP Creation

[Unit Structure After Change (From April 2021/Scheduled)] → Three Units

• Combined Unit of Toys and Hobby and Network Entertainment
• Real Entertainment
• Combined Unit of Visual and Music Production and IP Creation