Koei Tecmo announces declining quarterly financial results, but raises full-year earnings prediction

Koei Tecmo announced its financial result for the third quarter of the fiscal year, corresponding to the period from October 1 to December 31, 2022.

Company-wide net sales were 49,439 million yen (down 10.6% from the prior year), while operating profit was 22,994 million yen (down 15.2% from the prior year). That being said, the company says that sales of both packaged games (consoles and PC) and online/mobile games progressed as planned.

The reason for the decline was the unfavorable comparison with the release of multiple new packaged games in the same period last year.

That being said, Koei Tecmo is releasing both Wo Long: Fallen Fate Y wild hearts before the end of the fiscal year, and revised its forecast for the full year.

While net sales are untouched and, if achieved, would actually mark 5.8% year-on-year growth, the operating profit forecast has been increased by ¥1.5 billion, almost reaching the prior-year level (- 1.5%). .

Looking at the specific results for the quarter of the Entertainment segment, which includes video games. Net sales were 46,298 million yen, while operating profit was 22,456 million yen, both down from the prior year, respectively, by 6,059 million yen and 4,127 million yen.

You can check out additional breakdowns below which are quite interesting. We learn that 51.5% of quarterly revenue was achieved in Japan, 34.2% in Asia, 10.8% in North America, and 3.4% in Europe.

Things change significantly if we look at unit sales, which stood at 31.6% in Japan, 31.1% in North America, 16.4% in Europe and 20.9% in Asia. Koei Tecmo sold 5,980,000 units between October and December 2022, of which 4,020 were digital downloads, a ratio of 67.2%.

In terms of revenue, consoles reached 20.768 million yen, while mobile and online reached 25.130 million yen. 78.8% of total revenue was digital. Interestingly, full game download revenue and console DLC revenue were the only areas that showed year-over-year growth. 0.5% and 3.7% respectively.