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Konami Sees Sharp Drop In Profits, Expects Upturn

Major Japanese-headquartered publisher Konami has released its financial results for the fiscal 2006 year ended March 31, 2006, which include an alarming 91 percent decli...
Major Japanese-headquartered publisher Konami has released its financial results for the fiscal 2006 year ended March 31, 2006, which include an alarming 91 percent decline in profits over the previous year. The manufacturer of popular franchises such as Metal Gear Solid and Dance Dance Revolution indicated that net revenue was ¥262.1 billion ($2.3 billion) and operating income was ¥2.5 billion ($22.5 million), down from ¥28.1 billion ($252.3 million) the previous year due partly to expenses relating to its Health & Fitness division, which includes a line of fitness clubs in Japan. The company's soccer games, including the popular Winning Eleven franchise, sold more than 7 million units during fiscal 2006, leading all other video game offerings from Konami. Games based on the Yu-Gi-Oh! anime series sold 1.56 million units worldwide, while titles from the Metal Gear franchise saw 1.48 million units in sales, down from fiscal 2005's 4.2 million. However, the Tokyo-based video game company reported that net income more than doubled from fiscal 2005 to ¥23 billion ($207 million) from the previous year's ¥10.5 billion ($94.3 million). In addition, Konami forecasts an upturn into fiscal 2007, with expected revenues of ¥275 billion ($2.5 billion) and operating income to ¥29 billion ($260.4 million). The company particularly cited the launch of titles for next-generation consoles, as well as its e-Amusement networked-linked arcade games and the branding of products related to Winning Eleven soccer franchise as the reasons for the anticipated gain. Konami extended its forecast into 2008 by indicating that it anticipates an operating profit of ¥45 billion ($405 million) and net profit of ¥26 billion ($234 million) for the year beginning April 2008.

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