Feature Article
Message from the President

Jun.19.2025

Pipeline enhancement and growth-driving investment will lay the foundation for KOEI TECMO " To Become the World's No.1 Digital Entertainment Company".

HISASHI KOINUMA
President & CEO (Representative Director)

Keeping in mind KOEI TECMO's purposes and vision

At the KOEI TECMO Group, we have two purposes: KOEI TECMO Ethos of "Creativity & Contribution" and our Corporate slogan "Level up your happiness" These express how we ought to exist in society, where our role is to help bring about an increasingly happier world through new entertainment. In my new capacity as President and CEO(Representative Director), I will continue to take on new challenges while leveraging the experience and passion that I have cultivated over the years to fulfill these purposes of ours.

The Group's vision is "To Become the World's No.1 Digital Entertainment Company", and as the first step toward achieving this envisioned status, we have set a long-term vision for the next 10 years. The goal during this period is to enter the Top 10 among all digital entertainment companies globally in terms of operating profit*1. To that end, we will strive to create titles that will bring joy to customers around the world while aiming to implement a corporate structure that will allow us to release at least one major title every fiscal year, while steadily improving our earnings base.

Our profit is generated by our IP and titles that are loved across different generations and cultures and are greatly supported by our customers, which in turn provides the funding for our next development projects and creates more new titles. I strongly believe that reinforcing this cycle is the mission that I am charged with, as well as the path that the Group should take.

*1 Based on the company's own research

New growth achieved by leveraging IP (intellectual property)

Since joining Koei Co., Ltd. (the predecessor of KOEI TECMO GAMES) in 1994, I have ceaselessly gained experience as a programmer. In 2004, the company developed Samurai Warriors, for which I served as producer, combining the historical elements of Japan's Warring States period with the exhilarating Warriors Action game system of the Dynasty Warriors series, Koei's first-ever blockbuster title in the action game genre. This combination demonstrated that new entertainment could be created by integrating our existing game system with different IPs and drew high accolades from numerous users. This success cemented Warriors Action as our original game system IP. In addition, we established a new business model of collaboration, in which our game system IP would be combined with other companies' IPs while sharing the R&D costs and results. Since then, we have created a series of collaborative titles, which have now grown into one of the strong pillars that support the Group's multi-layered earnings structure.

The next action I took was to transform the organizational structure that would serve as the foundation for our development activities into a brand-based one. When I became President of KOEI TECMO GAMES in 2015, we reorganized the company's platform-based structure consisting of the Software Division, which developed console and PC games, and the Network Division, which developed online games, into the IP-based structure consisting of our five brands that existed at the time. The current organization is made up of six brands and one studio, each with its own distinct features. Each brand is enhancing the value of our IP by continuously improving itself in the genre where it excels. By allowing each of our brands to have its own unique strengths, we have been able to cultivate development capabilities across a variety of genres and implement our flexible production structure as a result. In addition, by agilely demonstrating our capabilities in collaborative projects with other companies' IPs in such a manner that utilizes each's unique features, we have been able to steadily expand our business options.

3rd Medium-Term Management Plan (FY 2022-2024)
Valuable assets resulted from our challenging undertakings

For the 3rd Medium-Term Management Plan, our priority goals included achieving 40 billion yen in operating profit per fiscal year; releasing a new IP title in the console and PC game category each fiscal year that sold around 5 million units, and another title each quarter that sold around 2 million units; and releasing a title in the mobile game category that generated 2 billion yen in monthly sales, along with several other titles that each generated 1 billion yen in monthly sales. Our operating profit reached a new record in FY 2022 as did our net sales in FY 2023, while our global ranking in terms of operating profit also started to continuously improve, going from 20th in FY 2021 to 17th in FY 2024. Although there were some titles that fell short of their goals, we were able to launch all the titles we planned during the fiscal year and achieve a certain level of success. Among them, Rise of the Ronin, an open-world*2 action RPG game that we released in March 2024, received high ratings from users. We were also able to accumulate a wide range of know-how by producing open-world console and PC games and GPS-linked mobile games, which had been challenging new areas for the Group. These experiences have also allowed us to clearly see the essential issues that we must address to compete in the global market. While taking on the challenge of continuously producing major titles, we also reaffirmed the importance of having a diverse lineup. In light of certain key changes transpiring in the market, technology, and user behavior, we will further focus our attention on strengthening our game development structure, improving quality to meet the AAA*3 standard, controlling costs, and marketing globally. In addition, we will start applying the knowledge and insight we have gained thus far to the 4th Medium-Term Management Plan starting FY 2025 to increase the likelihood of success in our next challenging endeavors.

*2. Open world is the category of games where the player can freely travel across vast virtual spaces and choose their own path of progression.
*3. AAA is the class of blockbuster console and PC games with high expectations from both users and the market, meeting high standards in terms of their graphics, operability, and stories.

4th Medium-Term Management Plan (FY 2026-2027)
Laying the foundation for growth to make the world's top10

Under the 4th Medium-Term Management Plan, the Group will continue on our quest to realize our vision as we start reaching for a place among the world's top 10 digital entertainment companies in terms of operating profit over the next 10 years. We will facilitate this by focusing on increasing the number of titles in the pipeline, which is the foundation for growth in game development. Meanwhile, to increase our chance of success, we will exercise tight control over our entire product portfolio as well as the quality of the individual titles that comprise it. In addition, to strengthen our human capital as a key initiative, we will aim to set up our development structure such that we can continuously release titles through human resource development and enhancement of their remuneration and benefits, in keeping with the three components of our HR strategy (ensuring a diverse pool of talent with a focus on new graduates; a human resource development system that drives growth; and establishing a workplace environment where employees can work with peace of mind over the long term). We will also focus on business expansion overseas by improving our development capabilities and marketing functions at our overseas operation sites. In addition, while cultivating deeper cooperative relationships with platform providers, we will actively expand into overseas markets such as India and Southeast Asia with the aim of establishing our own global sales structure in the future.

Through these initiatives, we will make sure to meet our goal of making at least 100 billion yen over the three years combined and 40 billion yen in operating profit per fiscal year during the period of the Medium-Term Management Plan, so that the Group can eventually achieve sustainable growth. Furthermore, to ensure the success of the 4th Medium-Term Management Plan, we will be making growth-driving investments as per our three key initiatives ((1) strengthening our management base, (2) business strategy, and (3) cash allocation), and will maintain a high ROE above the current level of 20%. In terms of shareholder returns, we will strive to pay dividends in a stable manner as per the company's basic policy of a consolidated annual total distribution ratio of 50% or annual dividend of 50 yen per share.

Setting the stage for further growth

In keeping with its corporate ethos of "Creativity & Contribution", the KOEI TECMO Group will contribute to society by creating original entertainment and delivering the best and most emotionally moving experiences to our customers. To overcome the barrier and make it into the world's top 10 in terms of operating profit, as is our long-term vision, it is essential to keep creating titles that will take the world by surprise, leveraging the development capabilities and know-how that we have cultivated over the years. The key to achieving this goal is to continuously expand and develop our human resources. While the company currently has approximately 2,600 employees, we plan on expanding the workforce to around 5,000 while developing them into creators capable of creating new entertainment and businesspeople capable of achieving business growth and profitability. We will also strive to implement a structure that will enable our facilitation of all operational processes from planning to sales.

The Group's brands are steadily expanding in scale. In the future, if we have a new development line with characteristics different from those of our existing brands, we will promote it as a new brand and create an operational structure that will allow us to create products with more variations than ever before. These initiatives will further diversify the pipeline, making it possible for us to offer an expanded range of products that meet the expectations of users. I'm convinced such an enriched pipeline will be the driving force for our next phase of growth and the foundation for continuously enhancing our competitive advantage.

I would be so grateful if all our stakeholders, including shareholders and investors, could continuously look forward to and support the Group's future endeavors as we continue to create new value while enhancing the company's enterprise value and contributing to society.