In-Depth Study of 50 Japanese and U.S. Stocks｜Deciphering the Strategies of Konami, Bandai, and Other Major Video Game Companies

The gaming industry is close to Web 3.0, including NFT and Metaverse. Industry giants such as Square Enix, Konami, and Namco Bandai Holdings, as well as GREE, Nexon, and gumi are among the listed stocks.

Looking at the situation of individual companies, Square Enix hit a yearly low in August due to deteriorating business performance. On the other hand, Konami hit a new high for the first time since the beginning of the year.

In the case of game companies, the key to their performance is the success of new titles and stable earnings from existing games, so it is more difficult to predict their stock price trends in 2024 than in other sectors.

However, if the Web 3.0-related businesses of these companies attract attention, investment money may flow into the market.

Square Enix (9684)

Category：Games

Partnership with Elixir Games and release of “SYMBIOGENESIS

Square Enix Aims to Break Free from Uncertainty with Entry into Blockchain Games

Square Enix, which landed with declines in both sales and operating profit for the fiscal year ending March 31, 2023, has identified “accelerating blockchain game development” as a key policy for the fiscal year ending March 31, 2024.

The company had already announced in January 2022 that incorporating blockchain games into its portfolio was a “major strategic theme,” but the results of this fiscal year's financial results showed a new direction. The absence of the release of expansion packages for mainstay titles such as “Final Fantasy” is also considered a major factor in this fiscal year's results.

In the Web 3.0 business, the official website of “SYMBIOGENESIS” was released in March 2023 as the first NFT collectible art project. The following month, the company announced a partnership with Elixir Games, a blockchain game company, indicating its focus on this project.

In the future, the company will also start full-fledged business development with a view to issuing its own tokens. While the company will continue to build new IP, it appears to be aiming to break away from the “uncertainty” of its business performance being driven by the success of the titles it has developed.

▶▶︎Future Outlook

Acceleration of blockchain game development will be a watershed for the company's ability to get back on a growth trajectory.

●KONAMI GROUP (9766)

Category: Games

Simultaneous worldwide sales of digital art NFT with total sales of 18 million yen

KONAMI, with record sales, is currently developing its own blockchain-based distribution platform

The Gaming & Systems business posted record sales for the current fiscal year, as sales increased due to the recovery from the Corona disaster as well as the impact of the yen's depreciation. Konami has been fully engaged in the NFT business since 2022, and has begun simultaneous worldwide sales of digital art, mainly game content.

In January of the same year, the company's first attempt to sell NFT of the “Castlevania” series in an auction format on OpenSea. Total sales of the 14 NFT items amounted to about 18 million yen. Most recently, the company announced the release of a new project, PROJECT ZIRCON.

The company plans to build a unique distribution infrastructure using blockchain and launch a service that allows players to trade NFTs converted into digital items in games. In order to develop this service, the company is looking for a wide range of human resources for system construction and service development.

The growing interest in the Web 3.0 industry from gaming giants and the growing movement to utilize blockchain in the gaming domain are attracting attention to Konami's move.

▶▶︎Future Outlook

Focus on the release date of proprietary blockchain-based services currently under development

●NAMCO BANDAI Holdings (7832)

Category：Games

Establishing a fund with an annual investment scale of 1 billion yen

Can BANDAI NAMCO, with its strong performance in the amusement field, maintain its strong performance in the metaverse field?

NAMCO BANDAI has identified Metaverse as a key strategy in its mid-term plan through March 2025, and has announced plans to invest 15 billion yen to build its own Metaverse. The company aims to create a platform that integrates the digital world and physical products by utilizing its abundant IP content.

In April 2022, the company also established a startup investment fund, the Bandai Namco Entertainment 021 Fund. With an annual investment size of 1 billion yen, the fund has already invested in blockchain game developer Gangbusters.

The fund aims to build an IP metaverse and create new entertainment by combining the IP strategy and know-how that Bandai Namco has cultivated to date with the strengths of startup companies.

In addition, the company has announced its participation in Oasys, a blockchain specialized for games, as an initial validator. The company is expected to develop a number of new titles utilizing Oasys in the future.

▶▶︎Future Outlook

The amusement field is performing well, and further growth can be expected depending on the performance of the funds invested in the company.

GREE (3632)

Category：Game

Metaverse “REALITY” is expanding its user base, especially in North America

GREE is making its presence felt in the metaverse field, in which it has invested heavily, with overseas sales of REALITY rapidly doubling in just six months.

GREE has established a series of new companies in the field of Metaverse, in which it has invested a large amount of money since 2021. The four companies are REALITY, which provides metaverse services for individual users; REALITY XR cloud, which is responsible for building metaverse space for corporations and developing XR and NFT content; REALITY Studios, a VTuber office; and BLRD, which is developing blockchain games. BLRD is aiming for global expansion in a multifaceted manner through its four-company structure.

In October 2022, BLRD entered into a strategic partnership with Ava Labs, a U.S. company involved in high-speed blockchain avalanche (AVAX), and is developing its game business on Ava Labs' blockchain. In addition, the number of users of the REALITY metaverse is expanding, especially in North America, and overseas sales have rapidly doubled in just six months.

In June 2023, GREE announced a strategic partnership with Mysten Labs, the developer of the blockchain Sui, to begin validation of Sui and at the same time, to develop Web 3.0 games using IP from Japan. GREE's Web 3.0 business is expected to accelerate in the future.

▶▶︎Future Outlook

GREE has been achieving results in the field of Metaverse, in which it has invested heavily, and is expected to continue its upward trend

●Nexon (3659)

Category: Games

To release a blockchain game version of the popular “Maple Story” game

Nexon intends to expand the game's economic sphere with the newly developed “Maple Story Universe.

Nexon, a major game developer that has been increasing its interest in the Web 3.0 space by purchasing $100 million worth of bitcoin in 2021, has entered into a partnership with Polygon Labs, a developer of the Polygon (MATIC) blockchain, in March 2023.

This was in order to develop a blockchain game version of the company's popular “Maple Story” game, and Polygon's technology was chosen for the project. The company also recently announced that it has selected Chain Link (LINK) as the infrastructure provider for the game.

The new project, Maple Story Universe, will allow players to collect items issued as NFTs, and the company plans to expand the game's economic sphere. By combining the advantages of technology with long-term live service capabilities, Nexon intends to build an NFT-centric ecosystem that will develop the IP together with game users.

▶▶︎Future Outlook

Expected to continue to rise steadily with the release of blockchain versions of popular games.

●gumi (3903)

Category: Gaming

Creating “Web3 Startups” to support students

The company is announcing a series of new projects and establishing a presence in the Web 3.0 domain.

gumi established gCG in June 2022 as a subsidiary to develop and distribute blockchain games. The company is developing a system for one-stop development from development and operation to token issuance.

gumi also announced a capital and business alliance with SBI and Square Enix. The company has announced plans to strengthen its metaverse and blockchain game development.

In 2022, gumi has established “Web3 Startups” as a support program for students who aim to start their own businesses in the Web3.0 domain, and in October of the same year, the first class of students was selected. In addition, the company has announced plans to launch its own title, “Phantom of Kill: Alternative Imitation,” by the end of 2023.

In addition, the company announced that it has signed a joint business agreement with Turingum and TOKYO BEAST FZCO for the development and operation of “TOKYO BEAST,” a completely original Web 3.0 IP project, with gumi taking charge of development and release worldwide in 2024. The company announced that gumi will be the developer of the game, which will be released worldwide in 2024.

▶▶︎Future Outlook

Further growth is expected once the XR and blockchain businesses take off.

Coroplast (3668)

Category：Game

Capital increase totaling 2.5 billion yen for “Brilliantcrypto

Entering the blockchain game domain as a way to break out of a large decline in performance compared to its peak period

While Coloplast has been on a downtrend since around 2017, it announced plans to raise a total of 2.5 billion yen in capital to Brilliantcrypto to strengthen its management base. Brilliantcrypto is a wholly owned subsidiary of GameFi developer, Coloplast, established in November 2022. The company announced the “Brilliantcrypto” project, a blockchain game with the same name as the company, at WebX, a global conference on the theme of Web 3.0.

Brilliantcrypto” is a blockchain game that introduces a new model called ‘Proof of Gaming,’ and is a major project that has a global partnership agreement with Paris Saint-Germain FC, a world-class soccer club.

The company has also signed partnerships with seven gaming guilds and DAOs worldwide, including OLA GG, Indi GG, GuildQB, Samurai Guild Games, Avocado DAO, PathDAO, and Ninja Game Guild. The company's entry into the blockchain gaming space could be a game-changing move for Coloplast, and the company will be closely watched.

▶▶︎Future Outlook

If the “Brilliantcrypto” project proves to be a step toward revival, there is a possibility of a V-shaped recovery.

KLab (3656)

Category：Games

Cost control is the key to becoming profitable

Will KLab's aggressive entry into blockchain-related businesses, including the establishment of BLOCKSMITH&Co. lead to a turnaround?

KLab, which has focused on the cell phone game business, announced that it will launch a blockchain-related business in 2022 and established BLOCKSMITH&Co.

In the same year, BLOCKSMITH&Co. concluded a basic agreement with Thirdverse Group regarding the development and operation of Web 3.0 and blockchain games, and in April 2023 developed “QAQA,” a game that can be enjoyed without requiring Web 3.0-related knowledge.

In June of the same year, eight companies, including Airtree, joined as quiz takers and released an alpha version. The company also announced the establishment of the “BLOCKSMITH AI Lab,” which aims to make AI technology accessible to a wider audience, and plans to introduce the results of its research into “QAQA” through quizzes.

KLab, which posted a significant year-on-year revenue decline in its consolidated financial results for the fiscal year ending December 31, 2022, has found a way to break through and is aggressively operating its Web 3.0 business. As a result of its efforts to control costs in an effort to become more profitable, the company's operating loss has narrowed from the previous fiscal year, and if the Web 3.0 business gets back on track, it may be able to return to profitability.

▶▶︎Future Outlook

The company is currently in a difficult situation due to a number of underperforming titles, but if the Web 3.0 business gets back on track, it may return to the black.

DORICOM (3793)

Category：Game

Launch of Web3.0 x Artist Project “Sports3

Launch of “Sports3” targeting the overlap between the entertainment and Web3.0 domains

Dorcom, a subsidiary of Namco Bandai, which has performed well in recent years, will enter the Web 3.0 business in 2022, concluding a basic agreement with the Thirdverse Group regarding the planning, development, and operation of blockchain games, targeting the “overlap” between the entertainment and Web 3.0 domains. The company is targeting the “overlap” between the entertainment and Web 3.0 domains.

In addition, the company and WIN3 have jointly launched a project called “Sports3,” which aims to enhance the sustainability of the sports industry through “Web3.0 x Artists,” and in late June they released their first digital collection for sale to the general public on the polygon chain.

In addition, the first NFT collection in the blockchain game “EternalCrypt - Wizardry BC -,” which is being developed in collaboration with Turingham using Dorcom's “Wizardry” IP, is being offered by the crypto asset exchange Coincheck. The first NFT collection for the blockchain game “EternalCrypt - Wizardry BC”, which is being developed in collaboration with Turingham, has been handled as the first project for “Coincheck INO” offered by the crypto asset exchange Coincheck.

The company's mainstay game business has been performing well, and it is likely to be a safe bet that the Web 3.0 business will continue to take off.

▶▶︎Future Outlook

In addition to the solid performance of the mainstay game business, whether or not the Web 3.0 business gets back on track will greatly affect the share price trend.



Related Articles

Mobile and Web 3.0 Businesses: The Bright and Dark Side of Rakuten Group In-depth Research on Seven Service Companies

In-depth analysis of the current state of Big Tech in the U.S., including Amazon, Microsoft, and other GAFAM companies!