Konami Earnings Up for FY2012 Q1

KonamiA financial statement released by Konami on August 4 stated that their net revenues are up from the previous period, ending June 30, 2011. Net revenues increased 3.3% to ¥54.9 billion (about $712 million USD). Total sales rose from ¥25 billion ($324 million) in last year’s first quarter to ¥26.1 billion ($338 million) this past quarter. Operating income went up from ¥2.3 billion ($29.8 million) to ¥6.1 billion ($79 million) in the same time frame. Income from traditional consumer games fell from ¥14.3 billion ($185 million) last year to ¥7.7 billion ($99.7 million), but income from social games increased from ¥2.4 billion ($31 million) to ¥7.8 billion ($101 million).

They also reported that the total registered members of social games like Dragon Collection surpassed eight million, with the title game reaching a #1 rank on GREE, a popular Japanese social networking/gaming site, and Professional Baseball Dream Nine with a #2 ranking as of June. They also reported stable recurring revenues from e-AMUSEMENT Participation and a solid launch of digital game cards “Football Allstar’s” and “Baseball Allstar’s.” They also reported that they opened “Konami Sports Club Izumi-Fuchu” (Osaka) in April and “Konami Sports Club Grancise Osaka” in May, added eight contract-based clubs, and reopened two out of three clubs that were closed due to the earthquake. The remaining club reopened on August 1st.

Konami took a hit from the 4.62 million units sold worldwide during the first quarter of last year and sold only 2.76 million units this past quarter. As was true last year, Japan was the strongest geographic region for their sales.  Breaking down unit sales, PSP and PS3 were tied at 25% each for total units sold. Last year, PSP held at 40% while PS3 consisted of 17% of their sales. Soccer games were the most popular type of game sold.

Analysis: It’s good to see Konami doing well, but it’s a bit concerning that traditional consumer games are down, seeing as I have little to no interest in social games. This could probably be at least partially due to how there was no Metal Gear release last year. Metal Gear Solid: Rising is in the works, however, and is scheduled to be released sometime in 2012. That and Metal Gear Solid HD Collection, slated for November 2011, may change those numbers a bit. They’re also planning a new Dance Dance Revolution game and Pro Evolution Soccer for fall 2011. Still, I don’t think that’s enough to make up for the nearly 300% growth that social games had.

It also makes me nervous that social games are growing that quickly because that encourages companies to put more into them and less into areas that have consistently given them income, and there’s going to come a point where social games are going to stop growing at this rapid rate. I keep hearing about the social games bubble crashing eventually, and while as a cosole gamer I’d love for that to happen, as someone who knows people’s paychecks are on the line, I wonder how smart a move it would be for Konami—or any company for that matter—to push too far into that realm.


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