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Chinese and UK focus promised as Bandai Namco reports profits dip

Restructure and fresh regional focus revealed as part of new mid-term strategy

Plans to enter the Chinese market and the formation of a new IP Creation unit signal Bandai Namco is determined to shake things up after disappointing financial results.

Operating profits at Bandai Namco fell 11.1 per cent to ¥53,462m ($489m) in the nine months ending December 31st 2017.

Net sales were up slightly at ¥481,180 ($4.4bn), an increase of 5.2 per cent. For the full year, the company is now predicting a 1.6 per cent year-on-year sales gain of ¥630,000m ($5.8bn) and a 0.9 per cent drop in profit at ¥57,000m ($522m).

Bandai Namco's Network Entertainment division, the home of games, saw sales climb 9.4 per cent to ¥285,329m ($2.6bn), with a full-year sales increase of 6.9 per cent now forecast. The division's operating profit fell 5.7 per cent to ¥33,834m ($310m), although it is still forecasted to suffer a 14.4 per cent year-on-year decrease.

Sales of digital games climbed 24 per cent to ¥148.1bn ($1.4bn), while boxed games fell 11 per cent to ¥59bn ($540m). European boxed game sales grew while there were declines in both America and Japan.

The company's Japanese sales in the period were up 7.8 per cent and still command the lion's share, although European sales climbed 10.1 per cent. American sales, meanwhile, fell 18.2 per cent. Europe was the only region to see an increase in operating profit.

Dragon Ball Z remains Bandai Namco's biggest IP, with sales reaching ¥65.4bn ($598m) - that's a 65 per cent rise year-on-year, too. This was followed by Mobile Suit Gundam and One Piece, both of which saw annual declines. Kamen Rider, Super Sentai (Power Rangers) and Naruto all increased sales, however.

The publisher has also announced fresh plans to inject more life into its slate of IPs via a new regionally-specific strategy called 'All Bandai Namco'. This will include a "full blown entry" into the Chinese market, including collaboration with local partners, as well as specific focus on the UK and Hong Kong.

A restructure has also seen its existing Network Entertainment, Toys and Hobbies and Visual and Music Production units joined by a rebranded Real Entertainment unit that focuses on arcades and equipment and a new IP Creation unit.

It is hoped that the latter will allow the company to grow beyond just creating new animation IPs and instead create new properties specifically linked to other products and services. An additional ¥25bn ($229m) will be pumped into IP Creation beyond the company's usual budget over the next three years.

The company also plans to launch a new browser game distribution platform and strengthen its fan club service.

On top of all of this, a new company called Bandai Spirits has been launched within the Toys and Hobbies unit that will concentrate on products for older fans. Music business Lantis will also be incorporated into Bandai Visual, the aim of which is to leverage existing IP in visual and musical ways, such as live performances. A facility will be constructed in Tokyo for this very purpose.