“Dreams, Fun and Inspiration”

BANDAI NAMCO GROUP
Strategic Presentation Session
September 13, 2005
Group Corporate Philosophy
Mission Statement
“Dreams, Fun and Inspiration”
BANDAI NAMCO will continue to provide
Dreams, Fun and Inspiration to people around the
world through entertainment based on creativity and
boundless enthusiasm
1
Group Corporate Philosophy
Belief
Basic Ethos
“Dreams, Fun and Inspiration”
are the Key to Happiness
The meaning of Dreams, Fun and Inspiration
will essentially change over the time,
but BANDAI NAMCO holds one unshakable
belief: that Dreams, Fun and Inspiration
will always hold the key to happiness
More Passion,
More Innovation
More perceptive
・Unparalleled curiosity and boundless
enthusiasm
・Abundant creativity unrestrained by the
status quo
・Open to people’s needs and satisfaction
from giving inspiration
Group Corporate Philosophy
Vision
To become the world’s most
inspiring entertainment group
The BANDAI NAMCO Group will constantly strive to
be a pioneer, aiming to deepen and widen the
appeal of entertainment and winning the hearts
of people worldwide who enjoy having fun.
Our ultimate goal is to become the world’s most
inspiring entertainment group
2
Slogan
Cross-Entertainment!!
By integrating the various entertainment businesses,
Bandai Namco Group will not only make a
quantum leap in evolution – it will also create
value with various partners and develop new forms
of entertainment
Group Symbol
Concept
Fusion and Evolution
3
Reorganization Schedule
The basic reorganization will be implemented by April 2006
Reorganization schedule
Details
Sep.
Sep. 29,
29,
2005
2005
z
Establishment of holding
company through share-forshare exchange
z
Establishment of NAMCO BANDAI
Holdings Inc.
Dec.
Dec. 1,
1,
2005
2005
z
Reorganization of domestic
operating companies
z
Portion of affiliated company share
management operations to be
transferred to holding company
Jan.
Jan. 1,
1,
2006
2006
z
Reorganization in North
America
z
Establishment of North American
holding company
Consolidation of North American
game companies
Apr.
Apr. 1,
1,
2006
2006
z
z
z
Consolidation of domestic
game companies
Establishment of NAMCO BANDAI
Games America Inc.
Strategic Business Unit
Operations will be consolidated into strategic business units,
through which the group will be managed
NAMCO BANDAI Holdings Inc.
Other Business
Affiliated Business
Visual and Music
Network
Game Contents
Amusement Facility
Toys & Hobby
Strategic Business Unit
4
Business Portfolio
The strengths of both companies will be combined, leading to dramatic growth in operations
BANDAI NAMCO
Bandai
Toys &
Visual
Networks
Hobby
Character
Amusement
Toys & Hobby
Visual and
Music
Life-style
Life-style
Video Game
Apparel
Software
Character
Technology
Location
Network
Fusion
Namco
Home
Videogame
Software
Coin-operated
Facility
Operations
Game Machines
New
Business
Game Contents
Amusement
Facility
Technology
Location
Amusement
Snack Food
Spa Resort
Welfare service etc.
Financial Projections
Billions of yen
FY06.3(Projection)
Sales
Operating Income
ＲＯＡ
ＲＯＥ
FY07.3(Projection)
475
44.2
11.0%
10.0%
Sales
FY08.3(Projection)
500
50.0
12.0%
10.5%
550
55.0
12.5%
11.0%
Operating Income
500
50
12.0%
ROA
10.0%
ROE
8.0%
0
0%
0
06.3
07.3
08.3
06.3
07.3
08.3
06.3
07.3
08.3
5
Strategic Business Unit
Basic Strategy
Toys & Hobby Strategic Business Unit
Basic
Basic Strategy
Strategy
① Strengthen management
systems for major characters
② Establish development system
from consumers’ viewpoint
③ Streamline production
logistics
④ Strengthen overseas sales
⑤ Strengthen apparel business
(including M&A)
Numerical
Numerical Plan
Plan
Sales
¥ billion
Operating income
¥ billion
250
200
25
195.0
177.5
17.0
205.0
20
17.5
15.2
150
15
100
10
50
5
0
0
FY2006.3
FY2007.3
FY2008.3
6
Amusement Facility Strategic Business Unit
Basic
Basic Strategy
Strategy
① Improve facility value by
utilizing characters and other
means
Numerical
Numerical Plan
Plan
Sales
¥ billion
120
12
100
80
④ Pursue low-cost operations
93.0
87.3
100.0 10.0
9.0
10
8
7.2
② Create new facility formats
③ Establish an earnings model in
Europe and the Americas
Operating income
¥ billion
60
6
40
4
20
2
0
FY2006.3
FY2007.3
FY2008.3
0
Game Contents Strategic Business Unit
Basic
Basic Strategy
Strategy
① Introduce development
systems and methods with an
emphasis on development
efficiency
Numerical
Numerical Plan
Plan
Sales
¥ billion
Operating income
¥ billion
40
200
180.0
155.0
146.3
150
27.0
30
24.0
21.5
② Expand and strengthen multiuse of content
100
20
③ Develop business models for
network games
50
10
④ Strengthen development and
marketing capabilities in
Europe and the Americas
0
0
FY2006.3
FY2007.3
FY2008.3
7
Network Strategic Business Unit
Basic
Basic Strategy
Strategy
① Secure rich content and attract
customers
② Expand mobile related
businesses
③ Expand system solutions
business
Numerical
Numerical Plan
Plan
Sales
¥ billion
Operating income
¥ billion
25
4
20.0
20
3
2.5
15.0
15
2.0
12.0 2.0
2
10
1
5
0
FY2006.3
FY2007.3
FY2008.3
0
Visual and Music Strategic Business Unit
Basic
Basic Strategy
Strategy
① Create original contents
② Maximize content value through
multiple use
③ Rebuild overseas business
development model
④ Expand business domain for
publishing, music, and other
areas
Numerical
Numerical Plan
Plan
Sales
¥ billion
50
10
46.5
40
30
Operating income
¥ billion
40.0
37.0
6.3
6.4
8
6.5
6
20
4
10
2
0
0
FY2006.3
FY2007.3
FY2008.3
8
Business Synergy Effects
‹Game Contents
‹Character Merchandising
◆Global Expansion
Game Contents Synergies
“Significant increase in development efficiency”
through flexible allocation of development staff and joint use of technologies
Policy ① Flexible allocation of development staff
Consolidation of creators, creation of units, effective development resource allocation
Current
Planning
Production
Unit 1
Organized into operational fields
Unit 2
Other
NAMCO CX
NAMCO AM
Banpresto
NAMCO CT
Bandai
Organization
Planning
Mobile
use
Coinoperated
use
Home use
Other
Mobile use
Coinoperated
use
Home use
Operational
Field
After
integration
of game
operations
Planning
Production ・ ・ ・
Unit 3
Consolidate and reorganize into units
＋
Policy ② Application of development environment and technologies
9
Game Contents Synergies
Provide appealing content to all customer groups by drawing on
the strengths of both Bandai and NAMCO
High
Field C
(30s)
Game strengths
Technical capabilities
（NAMCO）
×
Character appeal
(Bandai)
Age Group
NAMCO
Field A
Bandai
Field A content development
(teens)
Expanded customer base
Field B
Low
Balance
Game
emphasis
Toward Field B, Field C content development
Character
emphasis
Game Contents Synergies
Strong collaboration in prize game machines (hardware) and prizes (software)
→ Expand profits in the prize related field by drawing on each company’s strengths
Currently
Hardware
Weakness
Strength
Convene
Catcher ２
Sweet Land
CLENA-FREX
BANDAI NAMCO Group
New Product Development
Minor Changes to Existing Products
Draw on mutual appeal
Software
Prizes
Strength
Weakness
Large volume
of character
prizes compatible
with almost
all hardware
Certain characters
centered on
stuffed toys
（low transaction
volume）
New Prize Development
Minor Changes to Existing Prizes
Operating Company
NAMCO
Higher Income
Prize Game
Machines
Bandai
After Integration
10
Game Contents Synergies (New Product)
Bandai’s No.1 merchandising character:
“Mobile suit Gundam”
New type of NAMCO game machine for coin-operated use
New Product “Mobile Suit Gundam Senjo no Kizuna”
©Sotsu Agency・Sunrise
Business Synergy Effects
‹Game Contents
‹Character Merchandising
◆Global Expansion
11
Character Merchandising Synergies
Realize wide-ranging synergies from content creation, the starting point of character
merchandising, to content use and merchandising
Content Creation Fields
NAMCO
NAMCO
Games
Games
Bandai
Bandai
Characters
Characters
Content
Content creation
creation
synergies
synergies
Mutual use and joint development of
games and animation
Content Use Fields
Amusement facility
Content distribution
operations
operations
Synergies
Synergies from
from
multiple
multiple use
use
Manufacturing
operations
Character Merchandising Synergies
Deepen the character world settings of the BANDAI NAMCO Group overall
through merchandising of NAMCO game characters
NAMCO game world settings
Progress toward
diverse value added
Pac-Man
Animation content
Action figures
The Idle Master
Bandai’s character
Cards
merchandising
know-how
Ridge Racer
Vending machine capsule toys
Development of stories,
merchandising,
products…
Apparel
・・・
©NAMCO LTD., ALL RIGHTS RESERVED.
©Kubooka Toshiyuki, ©2003 NAMCO LTD., ALL RIGHTS RESERVED.
©2004 NAMCO LTD.,ALL RIGHTS RESERVED.
Comic books, magazines
12
Character Merchandising Synergies
Bandai’s virtual character worlds will be combined with Namco’s real locations
to provide entirely new entertainment to customers
Bandai’s
Bandai’s Character
Character World
World
Namco’s
Namco’s Real
Real Locations
Locations
Tamagotchi new
amusement park
Fusion
“Unazukin” and
“Riraku no Mori”
Fusion
©BANDAI・ＷiＺ 2004
©rainbow spice!
Business Synergy Effects
‹Game Contents
‹Character Merchandising
◆Global Expansion
13
Overseas Development Synergies
Building an organization that will realize the integration of characters, locations, and technologies
Reorganization as of
January 1, 2006
NAMCO BANDAI Holdings Inc.
(holding company)
NAMCO BANDAI Holdings (USA) Inc.
(regional holding company)
Bandai America Inc.
(toys)
NAMCO AMERICA Inc.
(Coin-operated use game
machine sales)
NAMCO BANDAI Games
America Inc.
(home use game software)
NAMCO
CYBERTAINMENT Inc.
(facilities operation)
Bandai Entertainment Inc.
(visual)
NAMCO MOBILE Inc.
(provisional)
(mobile operations)
Maximize
Maximizesynergies
synergiesamong
amongoperational
operationalfields,
fields,which
whichwere
wereexpanded
expanded
through
establishment
of
holding
company
through establishment of holding company
Realize
allocationof
ofresources
resourcesand
andincrease
increasefunctional
functionalefficiency
efficiency
Realizeoptimal
optimalallocation
Overseas Development Synergies
In overseas operations, expectations include synergies within each strategic
business unit as well as cross-functional synergies
Strategic business unit
Synergies
Synergies
Toys
Toys &
& Hobby
Hobby
->
Develop card, vending
machine operations in
NAMCO amusement facilities
->
Develop NAMCO game
characters that are very popular
in North America into resources
for Toys & Hobby
->
Achieve synergies and reduce
costs by unifying game
development
->
Develop NAMCO game
characters that are very popular
in North America into visual
content
Amusement
Amusement Facility
Facility
->
Advance into network
operations based on NAMCO’s
mobile game content
Game
Game Contents
Contents
Network
Network
Visual
Visual and
and Music
Music
14
Direction of Our Business Expansion
（Entertainment Hub）
Our Business Model: Entertainment Hub
!!!
!!!
!!!
!!!
!!!
!!!
!!!
!!!
!!!
!!!
!!!
Toys & Hobby
Visual
Apparel
Broadband
Game
Contents
!!!
Mobile
Amusement
Facility
15
Plan for Entertainment Hub Expansion
Players who can be linked through entertainment hub
Markets in Asia
Markets in Europe and the
Americas
In Japan
Competitor manufacturers
Global
Global Collaboration
Collaboration
Competitor network
companies
Manufacturers in other industries
Competitor manufacturers
Distribution/
wholesale
Expanding
Expanding network
network
(medium-term
(medium-term viewpoint)
viewpoint)
Competition
Competition ⇒
⇒ Cooperation
Cooperation
Tie-up
partners
Licensors
Customers
Amusement
facilities
Overseas
Overseas network
network
(medium-term
(medium-term viewpoint)
viewpoint)
Retail shops
Service companies in other
industries
Core
Core Network
Network (short-term
(short-term viewpoint)
viewpoint)
Raise
Raise value
value of
of overall
overall value
value chain
chain
16
Supplementary Information
Financial Projection
Billions of yen
Sales
Toys & Hobby
Amusement Facility
Game Contents
Network
Visual and Music
Affiliated Business
Elimination or Corporate
Operating Income
Toys & Hobby
Amusement Facility
Game Contents
Network
Visual and Music
Affiliated Business
Elimination and Corporate
FY2006.3
(Projection)
475.0
FY2007.3
(Projection)
500.0
FY2008.3
(Projection)
550.0
177.5
87.3
146.3
12.0
46.5
18.5
△ 13.1
195.0
93.0
155.0
15.0
37.0
19.0
△ 14.0
205.0
100.0
180.0
20.0
40.0
20.0
△ 15.0
44.2
50.0
55.0
15.2
7.2
21.5
2.0
6.3
△ 0.7
△ 7.3
17.0
9.0
24.0
2.0
6.4
△ 0.2
△ 8.2
17.5
10.0
27.0
2.5
6.5
0
△ 8.5
17
Company Organized by Strategic Business Unit
Toys & Hobby Strategic Business Unit
Visual and
Music
Toys & Hobby
Life-style
Network
Characters
Technologies
Locations
Game
Contents
Bandai Co., Ltd., Megahouse Corporation, Popy Co., Ltd., Seika Co., Ltd., Seeds Co., Ltd.,
Plex Co., Ltd., Sunlink co., Ltd., Tohato Inc., People Co., Ltd., BANDAI AMERICA INC.,
BANDAI S.A., BANDAI U.K.LTD, BANDAI ESPANA S.A., BANDAI(H.K.)CO.,LTD.,
BHK TRADING LTD., BANDAI INDUSTRIAL CO.,LTD., BANDAI KOREA CO.,LTD.
Amusement Facility Strategic Business Unit
NAMCO LIMITED, Pleasure Cast Co., Ltd., Hanayashiki Co., Ltd., St. Tropez Ltd.,
NAMCO CYBERTAINMENT INC., NAMCO OPERATIONS EUROPE LTD.,
NAMCO OPERATIONS SPAIN S.L.NAMCO ENTERPRISES ASIA LTD.,
SHANGHAI NAMCO LTD.*
Amusement
Facility
Game Contents Strategic Business Unit
Bandai Co., Ltd., NAMCO LIMITED, Banpresto Co.,Ltd., Bec Co., Ltd., Banpresoft Co., Ltd.,
Banpresto Sales Co., Ltd., Monolith Software Inc., NAMCO TALES STUDIO Ltd.,
BANDAI GAMES INC., BANPRESTO (H.K.) LTD., NAMCO AMERICA INC.,
NAMCO HOMETEK INC., NAMCO EUROPE LTD.
Network Strategic Business Unit
Affiliated Business
(Shared Services Center)
Bandai Networks Co., Ltd., VIBE Inc.
Visual and Music Strategic Business Unit
Bandai Visual Co., Ltd., Sunrise Inc., Bandai Channel Co., Ltd.,
BANDAI ENTERTAINMENT INC.
Affiliated Business Group
Bandai Logipal Inc., Banalex Corporation, Artpresto Co., Ltd., Happinet Corporation*,
Sotsu Agency Co., Ltd.*, NAMCO ECOLOTECH LTD., NAMCO SUPPORTERS LTD.,
NAMCO TRADING LTD., Italian Tomato Ltd.*
Underline: strategic business unit core company, *equity method affiliate
Note concerning “Forward-looking statements”
This document contains forward-looking statements that are based on the information currently available to
management, and estimates involving uncertain factors thought likely to have an effect on future results. As
such, they include various risks and uncertainties. Actual results may differ materially from these
projections for a variety of reasons, including changes in business environments, market trends and
exchange rate fluctuations relevant to the business of BANDAI NAMCO Group.
18