Konami revenues dip

Numbers down from last year; company plans restructuring of game-related businesses under one banner.

Konami released its semiannual earnings today and announced a change in its corporate structure to become a holding company, with its various business segments split into their own subsidiaries.

For the six-months ended September 30, 2005 (the halfway point of Konami's fiscal year), Konami announced revenues of 111.87 billion yen ($951 million), off about 2 percent from the 114.01 billion yen ($970 million) the company posted for the same period last year. The company pointed out its various Winning Eleven and Pro Evolution soccer games as strong sellers and said its Yu-Gi-Oh! card game is still going strong the world over, with Japanese sales even seeing a significant increase over last year.

The company has an optimistic outlook for the rest of its year, however. By the end of its fiscal year on March 31, 2006, Konami is projecting that it will rake in 270 billion yen ($2.3 billion), up about four percent from the 260 billion yen it pulled in last year ($2.21 billion). New Metal Gear Solid releases on the PlayStation 2 (Subsistence) and PSP (Acid 2), Suikoden V, and the latest in the company's Japanese baseball series Jikkyou Powerful Pro Yakyuu are expected to drive revenues for the rest of the year.

On top of its financial results, Konami Corporation also announced plans to restructure its operations at the end of its fiscal year. For gamers, the biggest change here comes in the merger of Konami's Japanese game operations with its foreign operations under one subsidiary. In preparation for this restructuring, Konami has been merging divisions and condensing its operations into three distinct business segments: Digital Entertainment, Health & Fitness, and Gaming & System. The company's Computer & Videogames, Toy & Hobby, Amusement, Online, and Multimedia operations have already been grouped as the Digital Entertainment segment, but at the moment, the Japanese game division remains an internal division of the Konami Corporation.

The change in structure is intended to improve management transparency, build a more efficient and responsive management structure, as well as make it easier to assess exactly how profitable each division is. After its reorganization, Konami Corporation will function as the core office that manages the business execution of its subsidiaries, with aims to improve the group's entire profitability. The company will remain listed on the stock market.

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