Konami : Consolidated Results for the Nine Months Ended December 31, 2015(Prepared in Accordance with IFRS)

KONAMI HOLDINGS CORPORATION hereby announces that the consolidated total revenues and operating profit for the nine-month period ended December 31, 2015 were ¥179,251 million (115.0% of the same period in the previous year) and ¥17,423 million (162.3% of the same period in the previous year), respectively.

Profit before income taxes and profit attributable to owners of the parent company were ¥17,142 million (133.6% of the same period in the previous year) and ¥6,262 million (80.9% of the same period in the previous year), respectively.

In Digital Entertainment business, the mobile game 'JIKKYOU PAWAFURU PUROYAKYU' continued to enjoy steady sales. In addition, we released 'METAL GEAR SOLID V: THE PHANTOM PAIN' and 'PES 2016 - Pro Evolution Soccer,' the latest global titles in the METAL GEAR and Pro Evolution Soccer PC/console game series. These factors resulted in increases in revenues and operating profit compared to the same period in the previous year.

In Health & Fitness business, we further developed pricing plans that enable customers to select the most suitable options based on their personal usage frequency and facilities they wish to use. We also made ongoing efforts to promote and spread Konami Sports Club services that support the concept of 'sustainable fitness.'

In Gaming & Systems business, sales of products such as the 'Podium' video slot machine and 'SYNKROS' casino management system continued steadily, mainly in North America and Australia.

In Pachislot & Pachinko Machines business, we released new pachislot products 'SILENT HILL' and 'High School D×D,' following previously released 'GUN SWORD' and 'SKYGIRLS-Zero, Again' . As for pachinko machines, we released 'CR PACHINKO Castlevania,' a cabinet derived from the Castlevania series of proprietary KONAMI content.

During the three-month-period ended December 31, 2015, in light of rapid changes in market structure surrounding the Pachislot & Pachinko Machine industry, impairment and other losses on property, plant and equipment and intangible assets of ¥8,320 million were recognized (included in other income and other expenses, net in the consolidated statement of profit or loss) as we worked on restructuring our pachinko machine business.

In addition, following careful consideration regarding the recoverability of deferred tax assets based on projections for future business performance, we decided to extinguish part of our deferred tax assets and recognize deferred tax expenses of ¥4,117 million during the three-month-period ended December 31, 2015.

1. Consolidated Results of Operation

(Millions of yen)

2. Business Segment Information - Revenue

(Millions of yen)

3. Business Segment Information - Operating Income

(Millions of yen)

4. Overview of the Nine Months Ended December 31, 2015

Digital Entertainment Business

1. Strong revenue generated from the mobile game 'JIKKYOU PAWAFURU PUROYAKYU' with its 19 million downloads in the one year since its distribution started
2. Release of 'PROFESSIONAL BASEBALL SPIRITS A (Ace)' in October 2015, a mobile game reproducing the real experience of a professional baseball game with top-quality graphics
3. Solid sales of mobile games for overseas markets, including 'Star Wars™: Force Collection' and 'Winning Eleven CLUB MANAGER' (known in overseas as 'PES CLUB MANAGER' ), which received a number of Best Game awards in various countries
4. Release of 'MÚSECA' (the latest arcade title in the music genre) in December 2015, and stable recurring revenues from 'e-AMUSEMENT Participation' arcade games, including 'MAHJONG FIGHT CLUB' and music genre games
5. Steady sales of the Yu-Gi-Oh! TRADING CARD GAME series in the global market, with the world tournament held in Kyoto, Japan
6. Favorable performance of PC/console games on the global market, including the worldwide release of 'METAL GEAR SOLID V: THE PHANTOM PAIN,' the latest installment in the METAL GEAR series, and 'PES 2016 - Pro Evolution Soccer,' the latest addition to the twenty-year-spanning Winning Eleven series

Health & Fitness Business

1. Enhanced services to meet diversifying customer needs, through means such as pricing plans enabling customers to select the most suitable options based on their personal usage frequency, implementing a free-form exercise plan without limits to usage frequency, discounted ticket books to be sold year-round, and the ability to combine usage of four franchise facilities with other Konami Sports Club facilities starting October 2015
2. Promoted improvement in earnings by closing unprofitable outlets which were not expected to grow and enhancing operational efficiency in contract-based facilities
3. Opened the Nasu Highland Golf Club - Konami Sports Club Beginners' Golf Course in August 2015
4. Opened the renewed Grancise Yebisu Garden in September 2015, bringing the current number of top-brand Grancise facilities in operation to three
5. Positive reception of our revamped personal training programs, including dieting program 'BIOMETRICS'and body conditioning program 'V-BODY'
6. Development of supplements that have a synergistic effect with exercise, including 'LOCOPIN,' an amino acid beverage, 'PROTEIN PRO 10' for women, and 'EXERCHARGE PROTEIN' for speedy replenishment of water and protein
7. Strengthened the Konami Sports Club brand by introducing the 'Konami Method,' a series of activities demonstrating the correct ways to perform various physical exercises, and condensing it into the easy-to-follow video series 'Konami Methods Matome'

Gaming & Systems Business

1. Expanded the Podium series video slot machine category and accelerated the development of products aimed at specific market demands amid the difficult market environment in North America, as well as focusing on expanding sales activities and offering a wider array of products in the Central and South American and European markets
2. Release of the next-generation cabinet 'Concerto' in the North American market late in the three-month period ended December 31, 2015
3. Maintained stable earnings from participation agreements by introducing an expanded lineup of premium products and game content, such as 'Podium Goliath', a larger size version of Podium
4. In the Asia and Oceania market, achieved strong performance in Malaysia and the Philippines by rolling out a richly diverse product lineup, including 'Podium Stack.' Also conducted aggressive marketing in the South African market
5. Showcased an array of products at the Global Gaming Expo (the world's largest gaming expo) held in Las Vegas, U.S.A., including the first showing of the next-generation 'Concerto' cabinet, 'Podium Monument' in the Podium series, and 'Frogger' (which leverages proprietary content), all of which earned a positive response from operators

Pachinko & Pachinko Slot Machines Business

1. Released 'SILENT HILL' and 'High School D×D' during the three-month-period ended December 31, 2015, the former being a new pachislot product that leverages proprietary content from the popular horror/adventure video game series of the same name, and the latter being a cabinet produced in collaboration with the High School D×D animation series (based on a popular light novel). These followed on from the releases of 'GUN SWORD' and 'SKYGIRLS-Zero, Again,' the latest models adapted to new regulations following a change in testing methods
2. Released 'CR PACHINKO Castlevania' which was derived from our proprietary content 'Castlevania: Rondo of Blood' in the Castlevania series

*Statements made in this news release reflect information available on the date of its announcement, and is subject to change without prior notice.

Konami Corporation issued this content on 29 January 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 29 January 2016 10:14:26 UTC

Original Document: https://www.konami.com/news/en/release/2016/0129/?cm_sp=00-_-release-_-20160129-e