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Tuesday, April 28, 2015

Konami is falling apart!?

By LUDWIG VON KOOPA - Scrumptiously volatile industry.

This is breaking stuff, but famed videogame company Konami (Castlevania, Metal Gear Solid, Silent Hill, Yu-gi-Oh!) is blowing up. The company is unraveling.

Let's make sure we're all on the same page. Konami's Silent Hills collaboration project is cancelled. P.T., which was a promotional teaser for the game and also a horror game itself, is being removed from the PlayStation Network. Hideo Kojima is leaving the company after Metal Gear Solid V: The Phantom Pain is released, leading many to believe that series is done. Plus, Konami's stocks are now voluntarily being removed from the New York Stock Exchange! (But being kept in the Japanese exchanges and London's.)

Konami delisted New York Stock Exchange removed P.T. cancelled Silent Hills fired Hideo Kojima
What is happening over at Konami?!

There is a lot to digest and there aren't many answers, though I'll try to address every point throughout this article. With regards to Silent Hills, it was a collaboration involving Kojima and without him around, it's sort of hard to work with that. P.T. is being removed because it existed to promote Silent Hills. Without Silent Hills, then Konami is fine leaving the PlayStation 4 without decent horror games. It's not being removed because Konami likes trying to make playing their games difficult. A lot of Nintendo fans seem very worried that Konami-published stuff will suddenly vanish from the Nintendo eShop, which is nonsense based off this information.

Why would Konami's stuff suddenly disappear? They're not going out of business. They're just re-consolidating/struggling, but that doesn't translate to "We no longer want your money." That said, I'm sure Konami is happy if there are rumours that they are going to, say, pull all of their Castlevania titles from Nintendo's online stores. You wouldn't go and purchase them right now if you thought they'd be there forever, now would you? (Unless you're strange. ...Just kidding. Sorta.)

"So why are they leaving the New York Stock Exchange, Ludwig?"

Well, they actually have been planning to do this since last year. It's just coincidence that the schedule they set-up ahead of time coincides with bad news. As for the reasoning, according to Konami,

"The Company listed its ADSs on the NYSE in September 2002 mainly to diversify its opportunities for fund-raising and to raise the visibility of the KONAMI brand. Since then, the Company has made efforts to enhance disclosures for shareholders and investors with the goal of deepening their understanding of the Company, in addition to complying with the disclosure requirements of U.S. securities laws and regulations, providing consolidated financial statements in accordance with accounting principles generally accepted in the United States ("U.S. GAAP"), and establishing internal controls in accordance with the Sarbanes-Oxley Act of 2002.
Meanwhile, the external environment has significantly changed as indicated by the increases in trading volume of Japanese stocks through stock exchanges in Japan by overseas investors due to the internationalization of the Japanese financial and capital markets, as well as the narrowing of the gap between U.S. and Japanese disclosure standards with respect to financial reporting due to a series of amendments to Japanese laws and regulations and accounting standards.
While the Company believes the initial objectives of the U.S. ADS listing were mainly achieved, it has judged that the continued listing on the NYSE is not economically justified, taking into account the market changes as stated above and the fact that the trading volume of its ADSs on the NYSE accounts for only a small fraction of the total trading volume of its shares. Therefore, the Company has decided to apply for voluntary delisting of its ADSs from the NYSE and for termination of registration of its ADSs with the U.S. Securities and Exchange Commission (the "SEC") under the Exchange Act."
None of that really means anything with regards to Konami's future. In fact, the company Panasonic did the exact same thing in 2013. With word-for-word, the exact same reasoning.

"Panasonic listed its ADSs on the NYSE in December 1971 mainly to promote trading of its shares and to raise the visibility of the Panasonic brand in the U.S. Since then, Panasonic has made efforts to enhance disclosures for shareholders and investors with the goal of deepening their understanding of Panasonic, in addition to complying with the disclosure requirements of U.S. securities laws and regulations, providing financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), and establishing internal controls in accordance with the Sarbanes-Oxley Act of 2002.
Meanwhile, the external environment has significantly changed as indicated by the increases in trading volume of Japanese stocks through stock exchanges in Japan by overseas investors due to the internationalization of the Japanese financial and capital markets, as well as the narrowing of the gap between U.S. and Japanese disclosure standards with respect to financial reporting due to a series of amendments to Japanese laws and regulations and accounting standards.

While Panasonic believes the initial objectives of the U.S. ADS listing were mainly achieved, it judges that the continued listing on the NYSE is not economically justified, taking into account the fact that the trading volume of Panasonic’s ADSs on the NYSE accounts for only a small fraction of the total trading volume of Panasonic’s shares. Therefore, Panasonic has decided to apply for voluntary delisting of its ADSs from the NYSE and for termination of registration of its ADSs with SEC under the Exchange Act."
If you're wondering how Panasonic is doing now compared to then, well, a lot better.

Panasonic Konami stock prices Tokyo Stock Exchange Japanese companies voluntarily delist from New York Stock Exchange NYSE
Panasonic announced in March 2013 and left July 2013. Konami announced November 2014 and is leaving now.

Panasonic was in trouble back then, and they're doing better now after they took steps to improve themselves. Konami is trying the same trick.

Konami also has other business units besides gaming, such as their casino business, toy business, and health business. Suppose Konami does leave the videogame industry... well, they'd still be around as a corporation. That can still hold intellectual property rights even if they don't exercise them.

That said, it does save us a headache that Snake didn't return for Super Smash Bros. 4.  "Oh, Kojima begged me to put Snake in Super Smash Bros. Brawl! And we put him back into 4 to satisfy the fans! ...But now Kojima is leaving Konami and Konami's future is uncertain... What do we do!?" And you may take all-star Kojima leaving Konami as a sign that Konami is dying, but all-star Masahiro Sakurai left Nintendo after Kirby Air Ride and Nintendo didn't fall apart afterwards. That said, Sakurai's name doesn't look like "Nintendo" in the same way that "Kojima" and "Konami" are looking preeeetttyy similar.

No matter what happens now, one thing is pretty certain: The videogame industry is quite turbulent. Today's kings can be tomorrow's bootlickers, and we hope that happens to Electronic Arts. Just sayin'.


Ludwig doesn't even give a damn about Konami, but he doesn't like the business-illiterate doomsday narrative that other media sources and deluded fans are peddling.


For more on Silent Hill, see our "Silent Hillary" article. 
For a review of Metal Gear Solid, click here.
If you think that Konami should sell off its franchises to other developers, that wouldn't really be a good idea either.
The same kind of fear-mongering happened when people thought Capcom was for sale.
...Yeah, Konami is utilising their IPs for erotic pachinko games now. It's done for games.
Konami isn't the only one who is diversifying to casino-esque gaming.

10 comments :

  1. Replies
    1. Hi.
      Thanks for the amazing thoughtful comment.

      Delete
  2. You are welcome Ludwig Von Koopa.
    I read something about a person that was collaborating with a project, suddenly leaving. And about some stock disappearing from the New York Stock exchange. So, bad luck.

    ReplyDelete
  3. Yey. No more annoying trading card commercials.

    ReplyDelete
  4. You are falling apart.

    ReplyDelete
    Replies
    1. True.
      You cemented your truth point here.

      Delete

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