Konami reveals drop in annual sales, profit

Konami has released its financial report for the year ended March 31st, revealing a drastic fall in profits and operating income - related in part to expansion plans for its Health and Fitness division.

Net revenue was posted at YEN 262.1 billion (EURO 1.8 billion) and operating income was YEN 2.5 billion (EURO 17.4 million), drastically lower than the YEN 28.1 billion (EURO 195.3 million) for the previous year.

Despite increased operating costs across its multiple divisions - particularly in the Health and Fitness division which includes a line of fitness clubs in Japan that the company is hoping to further expand as demand increases amongst middle-aged and senior citizens - Konami cited several highlights for the year in its games division.

The Winning Eleven (Pro Evolution Soccer) franchise has sold well worldwide, achieving particularly positive sales across Europe and boosted significantly by the introduction of new versions for Sony's PSP handheld. The franchise has sold in excess of seven million units worldwide to date, and further games in the series are planned.

Konami also noted an increase in the popularity of music games in North America and international regions, with sales of Dance Dance Revolution Extreme 2 outstripping the previous title in the series. Anime-inspired software such as Yu-Gi-Oh! has also contributed significantly and the company is expecting a further upturn in sales and revenue moving forward.

For fiscal year 2007, Konami is projecting revenues of YEN 275 billion (EURO 1.9 billion) and an operating income of YEN 29 billion (EURO 201.5 million), boosted by next-gen and handheld releases in addition to networked arcade machines and a merchandising expansion of its Winning Eleven franchise.