Konami : Consolidated Results for the Nine Months Ended December 31, 2016 (Prepared in Accordance with IFRS)

KONAMI HOLDINGS CORPORATION hereby announces that the consolidated total revenue and operating profit for the nine-month period ended December 31, 2016 were ¥163,941 million (91.5% of the same period in the previous year) and ¥29,587 million (169.8% of the same period in the previous year), respectively.
Profit before income taxes and profit attributable to owners of the parent company were ¥28,861 million (168.4% of the same period in the previous year) and ¥20,651 million (329.8% of the same period in the previous year), respectively.

Effective from the six months ended September 30, 2016, we restructured our business by combining the arcade games business segment, which formed part of our Digital Entertainment Business, with another BtoB business, the Pachislot & Pachinko Machines Business, and the segment classification was changed to the 'Amusement Business' in order to further strengthen our business operating structure. As a result, reportable segment classifications have been changed effective from the six months ended September 30, 2016. For the purpose of comparison to the nine month ended December 31, 2015, figures for the nine month ended December 31, 2015 have been reclassified under the new segment classification, and compared with those for the nine month ended December 31, 2016

In Digital Entertainment business, we released the new mobile titles 'Yu-Gi-Oh! DUEL LINKS' and 'JIKKYOU POWERFUL SOCCER' to the domestic market during the three months ended December 31, 2016. Each total number of downloads is increasing faster than ever with a positive turnout. In addition, other titles continued to receive favorable reviews, including 'JIKKYOU PAWAFURU PUROYAKYU,''PROFESSIONAL BASEBALL SPIRITS A (Ace)' and 'Winning Eleven CLUB MANAGER' (known overseas as 'PES CLUB MANAGER').
As for the Yu-Gi-Oh! TRADING CARD GAME series, we continued to carry out various measures in the global market, including the start of the qualifying round to the global tournament to be held in August 2017. As for computer and video games, we released 'JIKKYOU PAWAFURU PUROYAKYU Heroes,' following on with the releases of 'JIKKYOU PAWAFURU PUROYAKYU 2016' and 'Winning Eleven 2017 (known overseas as 'PES 2017 - Pro Evolution Soccer -'). As a result, sales from this business decreased and operating profit from this business increased compared to the same period in the previous year. This is because the mobile games enjoyed strong performance and it contributed to higher composition ratio of the mobile games.

In Health & Fitness business, we further developed our pricing and membership 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.' Overall, although sales from this business decreased mainly due to the previous fiscal year closing of facilities operated directory, operating profit from this business increased compared to the same period in the previous year due to improved quality and operational efficiency of the facilities.

In Gaming & Systems business, sales of products, including the new 'Concerto' cabinet for video slot machines in the North American market and the Podium series which has a richly diverse product lineup, continued to be favorable. In addition, the 'SYNKROS' casino management system performed well, which included the steady introduction into casino facilities in the various states of the U.S., as well as the introduction into large cruise ships. As a result, the business sees an increase in revenues on a local currency basis compared to the same period in the previous year. In Japanese yen of the Company's presentation currency, however, revenues and operating profit decreased due to an increase in development costs for new products and the effect of exchange rate changes by the sharply rising yen.

In Amusement business, we released the latest titles in the single medal game machine FEATURE Premium series, while 'e-AMUSEMENT Participation' arcade games, including 'MAH-JONG FIGHT CLUB ZERO' and music genre games, continued to enjoy steady sales. As for pachislot and pachinko machines, we launched the flagship products of 'METAL GEAR SOLID SNAKE EATER' and 'MAH-JONG FIGHT CLUB 2.' As a result, although sales from this business decreased amid the continuous harsh market environment surrounding the Amusement business, operating profit from this business increased compared to the same period in the previous year due to promoted business operation efficiency and improved profit structure.

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 for the Nine Months Ended December 31, 2016

Digital Entertainment Business

1. Releases of the new mobile games 'Yu-Gi-Oh! DUEL LINKS' and 'JIKKYOU POWERFUL SOCCER' to the domestic market during the three months ended December 31, 2016, both of which enjoy a strong start with an unprecedented number of downloads at a faster-than-ever pace
2. Steady sales of the mobile game 'JIKKYOU PAWAFURU PUROYAKYU' which celebrated its second anniversary since its release and surpassed 28 million downloads, with the holding of the 'PAWAPURO Festival 2016' e-Sports tournament, aiming to reach previously untapped consumer demographics
3. The mobile game 'PROFESSIONAL BASEBALL SPIRITS A (ACE)' was selected as one of Google Play's Best Games of 2016, and won the top prize in the Best Graphics games category
4. Solid performance of mobile games for the global market, such as 'Winning Eleven CLUB MANAGER' (known overseas as 'PES CLUB MANAGER') and 'Star Wars™: Force Collection'
5. Continued global development of the Yu-Gi-Oh! TRADING CARD GAME series, with the start of the qualifying round to the global tournament to be held in August 2017
6. Release of 'JIKKYOU PAWAFURU PUROYAKYU Heroes' in December 2016, followed by the release of the latest titles in the console game series 'JIKKYOU PAWAFURU PUROYAKYU 2016' and 'Winning Eleven 2017' (known overseas as 'PES 2017 - Pro Evolution Soccer -')

Health & Fitness Business

1. Introduction of completely renewed studio exercise programs offered at sports club facilities, and development of an array of programs to meet diversified customers needs, including 'Core Cross,', a self-developed program for core training and programs for the purpose of relaxation and shaping-up
2. Held a special event including gymnastics lessons and talk shows offered by athletes from the Konami Sports Club Gymnastics Team at the exercise class for kids called 'Undo-Juku,' with the goal of conveying the joy of gymnastics and supporting healthier lifestyle
3. Commenced a new franchise facility in Amakusa City, Kumamoto prefecture, in July 2016, and renovated three of our sports clubs - Iidabashi, Ebisu and Jiyugaoka-ekimae - including drastic replacements of training machines and expansions of spaces for personal training, to provide enriching experiences
4. Started operation of 29 new contract-based public sports facilities in April 2016 to promote and support healthier lifestyle for local communities

Gaming & Systems Business

1. Favorable sales of the Podium series, including the new 'Concerto' cabinet for video slot machines in the North American market
2. Contributed steady operation of participation agreement by introducing expanded lineup of premium products and game content
3. Steady introduction of the 'SYNKROS' casino management system into casinos in the various states of the U.S. and large cruise ships in service overseas
4. Sales of the new 'Concerto' cabinet and Podium series for new operators contributed in the Asia and Oceania market

Amusement Business

1. Stable recurring revenues from 'e-AMUSEMENT Participation' arcade games, including 'MAH-JONG FIGHT CLUB ZERO' and music genre games
2. Full-fledged operation of the latest titles in the single medal game machine series, 'TwinkleDrop JUKE! ' and 'Frozen Tower'
3. Held the official tournament to decide the ultimate arcade game player 'the 6th KONAMI Arcade Championship' since December 2016, which continued to receive favorable reviews at amusement facilities nationwide and selected regions in Asia and North America
4. Releases of the flagship pachislot products 'METAL GEAR SOLID SNAKE EATER' which was derived from the grand-scale METAL GEAR video game series and 'MAH-JONG FIGHT CLUB 2' which is the latest pachislot machine of the popular MAH-JONG FIGHT CLUB series

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