Bandai Namco: Navigating the Risks of Game Releases

Bandai Namco is experiencing a strong 2024, driven in part by the successful launch of the Elden Ring expansion Shadow of the Erdtree. The company has raised its forecasts for the year, but faces challenges in meeting these targets due to a crowded release schedule for 2025. According to Muller, the ongoing sales of Shadow of the Erdtree and the launch of new IP Unknown 9 Awakening will contribute to the company's success, with Dragon Ball Sparking Zero being a key title in achieving the company's full-year target. When evaluating the company's game pipeline, Muller emphasizes the importance of a balanced risk approach, considering factors such as investment level, production capabilities, and market potential. While some IPs still have traction, launching new IPs has become increasingly difficult due to rising development costs and longer development times. As a result, the company must factor in the risk of overspending and potential delays when making decisions. The company must also balance its portfolio between risk and innovation, safer bets, and bigger IPs. This is a challenging mix, as the timing of game releases is not always controllable. Additionally, the company cannot account for the release schedules of other companies, which can impact decision-making. Despite these challenges, Muller is confident that 2025 will be a stronger year for the gaming industry. He believes that the right macroeconomic environment, platforms, and install base are key to driving growth. The company is also exploring new markets, such as Brazil, South America, and India, which are experiencing significant growth in the gaming industry. The upcoming release of new consoles, such as the Switch 2, is also expected to benefit Bandai Namco. As a platform-agnostic company, Bandai Namco is prepared to invest in new consoles and make its games available on various platforms. By doing so, the company aims to reach its players and provide them with the opportunity to play its games and IPs on their preferred platforms.