Interviews

Please discuss the effect of COVID-19 and the current results in the Toys and Hobby business.

Takenaka: In FY2021.3, in the Toys and Hobby business, the suspension of operations at amusement facilities due to the spread of COVID-19 had an effect on prizes for amusement facilities, digital card games, etc., especially in the first quarter.
On the other hand, we quickly strengthened sales and marketing initiatives leveraging digital technologies, and as a result we secured demand associated with people staying at home. Products or the mature fan base, such as Gundam plastic models and collectible items, recorded favorable results around the world. In addition, in Japan popularity was enjoyed by products utilizing new IP and by related products, such as confectionary. As a result, overall the Toys and Hobby business achieved record-high net sales and operating profit.
In the first three months of FY2022.3, our results were led by businesses that continued to enjoy favorable performances, and businesses that were affected by COVID-19 in the same period of the previous fiscal year recovered. Consequently, we achieved record-high net sales and operating profit for the first three months of a fiscal year.

What is the status of new IP initiatives?

Takenaka: We are working to quickly create products based on new IP from other companies, such as Demon Slayer: Kimetsu no Yaiba, Disney: Twisted-Wonderland, and Jujutsu Kaisen. In addition to toys, these efforts have also produced a large number of hits in related products.
The business division in charge of prizes and lottery-related products, which have a rapid business cycle, has been gathering information about new IP from a wide range of sources, and has rapidly commercialized new products. Its methods of gathering information are also being adopted by other business companies
and divisions. The Toys and Hobby business has a variety of outlets, such as toys, figures, plastic models, toy confectionary and foods, capsule toys, card games, apparel, and daily use sundries. By working together and acting quickly, the Toys and Hobby business is able to provide products at the optimal timing, ranging from young customers to the mature fan base. I believe that these comprehensive abilities and speed are a major strength of the Toys and Hobby business.
In addition, looking at in-house IP, we have hit products in the field of entertainment confectionary, such as Charapaki and Tsurigumi. Going forward, we will strive to create these types of IP that leverage the distinctive strengths of the Toys and Hobby business.

▲Demon Slayer: Kimetsu no Yaiba — DX Nichirin Sword
©吾峠呼世晴／集英社・アニプレックス・ufotable

The business is also devoting efforts to sales and marketing initiatives that utilize digital technologies.

Takenaka: COVID-19 has had an influence, and the pace of digitalization throughout society has accelerated. The Toys and Hobby business is also working aggressively in promotions with online elements and in e-commerce. The mature fan base has a strong affinity for online initiatives, and 700,000 fans participated in one of our online events over a period of three days. The merits of online events include the fact that anyone can participate easily. As a result, we have been able to connect with new customers as well as dormant customers.
On the other hand, real events have a special ability to create buzz among the participants. With a focus on the period after COVID-19, we will conduct effective hybrid promotions that leverage the merits of both online and real events.

▲2020 Events: GUNPLA EXPO 2020 (left), TAMASHII NATION 2020 (right)
©創通・サンライズ　©ダイナミック企画
©永井豪・石川賢/ダイナミック企画・真早乙女研究所
Voltron TM & © WEP, LLC. All rights reserved.

The Toys and Hobby business and the Digital business have been combined into a single Unit.

Takenaka: In a general sense, the Toys and Hobby business and the Digital business are in the same market — entertainment — but there are major differences in the features of the products that they offer. For example, the Toys and Hobby business turns over a large number of products on a short cycle, from several months to a year. In contrast, the Digital business develops and manages a single title over a long period of time measured in units of several years. The purpose of combining these businesses is not to make these different characteristics completely the same. Rather, each will strive to learn from and leverage the other’s strengths. For the Digital business I think that gathering information about the IP in the Toys and Hobby business and a sense of speed will provide motivation.
And for the Toys and Hobby business too, I think that further growth will result from a deeper understanding of the Digital business, which rolls out a single product for an extended period of time on a worldwide basis.
To foster integration, we are actively advancing personnel exchanges among businesses. For example, from April, under a Group initiative, there has been personnel exchange among executives from BANDAI SPIRITS CO., LTD., and Bandai Namco Entertainment Inc. Also from June an idea contest was conducted among three companies — BANDAI CO., LTD., BANDAI SPIRITS CO., LTD., and Bandai Namco Entertainment Inc. Each of the three companies set themes related to its own products, and proposals were recruited from all employees. The plans that were submitted were publicly shared among the three companies, and officers and employees could vote for the proposals they like. By creating a venue for employees of the three companies to freely exchange ideas, this program became an opportunity to deepen mutual understanding.

Implementing organizational restructuring to expand overseas business

What is the situation with overseas initiatives?

Takenaka: China and North America have been positioned as focus regions. In China, in May we put a life-sized Freedom Gundam statue on display in Shanghai, and in conjunction with that event, we opened our second Gundam plastic model flagship shop in Shanghai. The response has been positive. In addition, Ultraman and KAMEN RIDER products are also popular, and moving forward we will aim to further expand sales.
In North America, business for the mature fan base is recording favorable growth. In the previous period, we succeeded in introducing products in large-scale retailers, including Target. Gundam plastic models were introduced in about 3,000 stores, and Gundam and DRAGON BALL figures in about 4,000 stores. Also, favorable results are currently being recorded by a Digimon: Digital Monsters trading card game, a new initiative. In these ways, we are seeing new progress.
For the Bandai Namco Group to record continued growth, we must strengthen business operations around the world. To that end, the Group is advancing organizational restructuring. In China, plans call for the combination of the company handling the Digital business and the company handling the Toys and Hobby business in January 2022. Also, in North America, the Group will combine the company handling the Toys and Hobby business for specialty retail shops and the company handling the Toys and Hobby business for large-scale retailers. Through these reorganizations, we will aim for business growth over the medium to long term in each region.

▲DIGIMON CARD GAME BOOSTER　BATTLE OF OMNI [BT05]
©Akiyoshi Hongo, Toei Animation

What is the outlook for the second half and thereafter?

Takenaka: From the second half, new KAMEN RIDER and Demon Slayer: Kimetsu no Yaiba programs will start. Furthermore, plans call for the latest theatrical version of DRAGON BALL SUPER to open in 2022. For this type of IP from other companies, we will step up our efforts in the planning and development of high-quality products, based on strong partnerships with rights holders. In addition, we will also actively work in collaboration with other Group Units in the creation and nurturing of IP and in business rollouts, such as with Kyoukai Senki, Capsule Toy Store facilities, and official shops for ichibankuji lottery-related products. In these ways, we will strive to make a contribution to Groupwide results.

What are your policies toward work?

Takenaka: As someone in a field related to manufacturing, I place the highest priority on making products that delight customers. Products that customers enjoy lead to motivation for employees, and as a consequence, to results for the Group. That motivation then leads to the creation of further products that customers enjoy. The entire Toys and Hobby business will work together and do our utmost so that we can create this type of favorable cycle.

This article is an extract from the Newsletter, Bandai Namco News, which was published in September 2021 and partially re-edited.