Namco Bandai Q1 earnings wobbly

With the arcade business not what it once was in Japan, many gaming companies based in the region are finding their pockets decidedly light on quarters. Following a massive sell-off of arcade machines earlier this year, Namco Bandai is still suffering the ramifications of the dwindling arcade business.

Reporting on its first-quarter earnings today, the Tokyo-based publisher said that net sales for the three-month period ending March 31 were down 6.4 percent to ¥89,979 billion ($822 million). A greater cause for concern was Namco Bandai's drop in actual income, with net profit slipping 63 percent to ¥1,018 billion ($9 million).

While its Amusement Facility as well as Toys and Hobby divisions slid a respective 10 and 12 percent, home console gaming was actually up for the publisher, if only slightly. Namco Bandai saw its games division climb nearly 4 percent to ¥25,514 ($233 million) on the strength of Dragon Ball Z Budokai Tenkaichi 3 on the Wii and PlayStation 3 (420,000 sold), Taiko Drum Master 2 for the Nintendo DS (260,000 sold), Tales of Symphonia for the Wii (215,000 sold), and Naruto: Uzumaki Chronicles 2 for the PlayStation 2 (208,000 sold).

Speaking at a postearnings conference, Namco Bandai president Takeo Takasu addressed a number of shortcomings in the publisher's first fiscal-quarter performance. As reported by financial news service Forbes, Takasu noted that the high-definition media playback format war was to blame for Namco Bandai's ¥234 million ($2 million) loss, down from a ¥1.1 billion ($10 million) windfall a year ago, saying, "Uncertainties about who would win the next generation DVD format and the subsequent transition to the new format hit the sales of our DVD package." The company's video arm, Bandai Visual, produces and distributes many anime offerings, including the cult hit Cowboy Bebop and the ominpresent Gundam series.

Takasu also addressed the company's flagging arcade business, saying that Namco Bandai would spend ¥4.6 billion ($42 million) to shutter an additional 69 arcades--20 percent of its remaining operations in all. Having blamed the Wii for the arcade scene's current travails earlier this year, Takasu assumed an optimistic face, saying, "I also believe that people can't sit back forever and that they will eventually return (to play games at arcade game facilities)."