Konami’s Profit Drops Due to Investment in Research & Development and More

Konami announced its financial results for the first quarter of fiscal year 2019. The company's profit on games dropped due to investment for the future.

on July 31, 2018 2:54 AM

Konami disclosed its quarterly financial results for Q1, fiscal year 2019, which includes the period between April 1st and June 30th 2018.

As you can see below the company’s revenue increased by 4.9% year-on-year, but all profit numbers were slightly down.

Konami's Profit Drops Due to Investment in Research & Development and More

A similar trend can be seen for the Digital Entertainment business, which includes video games. Revenue increased by 4% year-on-year, while profit dropped significantly by 13%.
Konami's Profit Drops Due to Investment in Research & Development and More

We get a detailed breakdown of the performance of the gaming business. Jikkyou Powerful Pro Baseball 2018 is said to have enjoyed a “favorable start,” while Pro Evolution Soccer 2018‘s myClub online mode also performed “strongly.”

In the entertainment market, game contents continue to diversify along with functional enhancement of various devices, including mobile devices and video game consoles, and development of information and telecommunications infrastructure. In conjunction with the changing times, the preference for enriching daily life through full and abundant experiences in personal spending has been strengthened. In the game industry, efforts are accelerating to offer new experiences through game content in various ways, including eSports, which are regarded as a form of sports competition and are attracting more and more attention.

Under such circumstances, our mobile games in the Digital Entertainment segment performed strongly as Winning Eleven 2018 (known overseas as PRO EVOLUTION SOCCER 2018) attracted much attention due to worldwide “soccer fever” during this first quarter. In the Chinese market, Winning Eleven 2018 (known in China as 実況足球) and Winning Eleven CARD COLLECTION (known in China as 実況:王者集結),continued to be released through collaboration with local companies. Various titles also continued to perform stably, including JIKKYOU PAWAFURU PUROYAKYU and PROFESSIONAL BASEBALL SPIRITS A (Ace) in the domestic market and Yu-Gi-Oh! DUEL LINKS in the global market.

[…]

As for computer and video games, we released JIKKYOU PAWAFURU PUROYAKYU 2018, which was loaded new features including VR compatibility. Sales of the game got off to a favorable start. In addition, we released SUPER BOMBERMAN R for PlayStationⓇ4, Xbox One, and Steam (PC), which had been released for Nintendo Switch in 2017. Due to the recent global interest in soccer, an online mode in Winning Eleven 2018 (known overseas as PRO EVOLUTION SOCCER 2018), myClub, continued to perform strongly.

Quite interestingly, we get an explanation for the decrease in profit, which is mainly due to advance investment, promotion, and research and development for future projects.

“Meanwhile, the segment profit decreased mainly due to advance investments, including promotions to gain more experience with our contents for potential users and researches and developments aimed at the future.”

Konami's Profit Drops Due to Investment in Research & Development and More

Below you can see the pipeline of titles already announced by Konami for the next few months.

Konami's Profit Drops Due to Investment in Research & Development and More

If you’re interested in comparing, you can check out the results for the past quarter in our dedicated article from May.

 /  Executive News Editor
Hailing from sunny (not as much as people think) Italy and long standing gamer since the age of Mattel Intellivision and Sinclair ZX Spectrum. Definitely a multi-platform gamer, he still holds the old dear PC nearest to his heart, while not disregarding any console on the market. RPGs (of any nationality) and MMORPGs are his daily bread, but he enjoys almost every other genre, prominently racing simulators, action and sandbox games. He is also one of the few surviving fans of the flight simulator genre on Earth.