Konami De-lists Itself From The New York Stock Exchange

Konami De-lists Itself From The New York Stock Exchange

konami logo

In an official statement, Konami explained that "the continued listing on the NYSE is not economically justified."

What the heck is going on with Konami these days? Last month, there was the whole debacle with Hideo Kojima's studio reportedly disbanding, earlier this week we heard that Silent Hills had been canned, and now the company has voluntarily de-listed itself from the New York Stock Exchange.

The company still maintains a presence in both the London and Tokyo Stock Exchanges, but decided to remove itself from the NYSE as "the continued listing on the NYSE is not economically justified."

You can read Konami's full de-listing statement here, where it goes into a bit more detail, noting specifically that the NYSE accounts for only a small fraction of the total trading volume of its shares.

Voluntary de-listing can be seen a part of an internal restructuring, and going by all the other crazy stuff going on at Konami's video game sector these days, it wouldn't be too much of a far cry to suggest that it was moving itself away from gaming.

In its financial report for the third quarter of 2015, digital entertainment saw a contraction of just over 5%, while its "Pachinko" - Japanese slot machine - division saw a moderate 4.2% gain year over year. Konami also operates in quite a few other industries in Japan, including chains of fitness centers.

Source: IGN via London Stock Exchange

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They're just mad that they can't buy stock with Yugioh cards.

So...isn't that it? Wouldn't the next step be declaring bankruptcy now that they've stopped new investors from climbing on?
What, few weeks? End of the summer at best. Look for them selling off IPs and studios. We're watching a whale kills itself now!

Silentpony:
So...isn't that it? Wouldn't the next step be declaring bankruptcy now that they've stopped new investors from climbing on?
What, few weeks? End of the summer at best. Look for them selling off IPs and studios. We're watching a whale kills itself now!

It's still present at the london and tokyo stock exchanges.

I think what's going on is that they're leaving the videogame industry and shifting their focus elsewhere.

esserin:

Silentpony:
So...isn't that it? Wouldn't the next step be declaring bankruptcy now that they've stopped new investors from climbing on?
What, few weeks? End of the summer at best. Look for them selling off IPs and studios. We're watching a whale kills itself now!

It's still present at the london and tokyo stock exchanges.

I think what's going on is that they're leaving the videogame industry and shifting their focus elsewhere.

What else can they really do though? I suppose they could hire themselves out but who would take them though? Especially with how they have been treating Kojima. I hope Kojima takes all the Silent Hills work that his team has done legality be damned and puts it up under either a different name or under the same name and gets Del Toro back on the project.

On Topic: Know what else isn't economically justified Konami? Getting rid of the person that has basically been helping hold your heads above the water.

Does Konami have any other notable video game franchises besides Metal Gear and Silent Hill? Seriously, I'm drawn up blanks here. I'm pretty sure those two franchises (mostly Metal Gear) are all that is holding up Konami's video game division.

On the surface, this just looks to me like a weird soon-to-be-recorded-in-Uncle-John's-Bathroom-Reader corporate suicide of the grandest scale.

My theory: Konami is now being run by EternalNothingness and is gearing up for its release of Sakura The Rabbit.

I am fairly certain we have some weird japanese mindset at work here. Probably want to cut all ties to any market with dirty foreigners and switch to the pachinko market, or something.

Yeesh. Oh well, if they end up not releasing MGS5 then I don't have to feel guilty about not getting it.

Well they did lose the guy who made Konami's games division an actual games division. Yeah they might've had other things, but their flagship was Metal Gear Solid.

lacktheknack:
My theory: Konami is now being run by EternalNothingness and is gearing up for its release of Sakura The Rabbit.

My god, I kinda want that to be the truth now. It wouldn't be a boring series of articles, that's for sure.

OT: I am pretty uninformed about how businesses function and how stocks work but it doesn't take someone who is to see that this is the move of a company without a clear sense of policy/direction.[1] Removing yourself from the Stock Exchange... Is that a legitimate business strategy? I'm not being sarcastic, I'm curious.

[1] Or at least that's the impression they're giving off. Either way, NOT good.

I've been thinking about this all day since I heard about it this morning.

I'm getting to wonder if they're downsizing and just staying in the Japanese market since I believe they want to get into smaller projects. It would make sense for them to leave the global market and stay locally. I think they have a hands in various markets in Japan already, so they really wouldn't have to do too much to achieve that.

This is all speculation on my end since I don't know a whole lot about economics, but that's what I'm reading into it. So, it appears they're gonna leave the video game market eventually from what I've been reading. I could be wrong since I'm just guessing here.

Still sucks that they would have to lay off a shit load of people and act like asshats about the whole things. >.>

Then they should just sell the rights to Silent Hills, Metal Gear, etc and let those products persist under other companies! Kojima in particular said nothing about quitting the games industry, he just wanted to hang up his MGS hat. You know who'd LOVE exclusive rights to Kojima's works? SONY. You know it, I know it, and exclusivity is better than this.

lacktheknack:
On the surface, this just looks to me like a weird soon-to-be-recorded-in-Uncle-John's-Bathroom-Reader corporate suicide of the grandest scale.

My theory: Konami is now being run by EternalNothingness and is gearing up for its release of Sakura The Rabbit.

Wait, you mean he stepped away from exhaustive epistemological analyses of MLP episodes? I was half-expecting him to suddenly vomit a wall of text positing that there was some sort of correlation between "The Return of Harmony"'a two-parter episode and Sartian Contingency, as exposed in the eponymous author's novel, "Nausea"!

Nieroshai:
Then they should just sell the rights to Silent Hills, Metal Gear, etc and let those products persist under other companies! Kojima in particular said nothing about quitting the games industry, he just wanted to hang up his MGS hat. You know who'd LOVE exclusive rights to Kojima's works? SONY. You know it, I know it, and exclusivity is better than this.

Ten to one that this happens. It makes so much sense. MGS4 was a cash cow for the PS3, I have a tough time imagining anyone at Sony watch Konami's sinking ship and just shrug.

If they delist from the New York stock exchange their projected presence at the North American market will probably decrease. Since that segment only consists of video games, it sounds like we'll see less video games from Konami. This, in combination with Silent Hills being canceled and Kojima, their only big name, potentially quitting makes me believe that Konami is about to cut down on their video game department significantly. That, and the fact that all big Japanese third parties seems to be going awful.

This video I saw the other day reinforces this belief:

Redlin5:

OT: I am pretty uninformed about how businesses function and how stocks work but it doesn't take someone who is to see that this is the move of a company without a clear sense of policy/direction. Removing yourself from the Stock Exchange... Is that a legitimate business strategy? I'm not being sarcastic, I'm curious.

This is just de-listing from the NYSE, it is still listed for Tokyo and London. As to why they would want to do this? Cost, being listed on an exchange is not free and since there was comparatively little trading activity on the NYSE it was no longer seen as worth it. This behavior is not necessarily indicative of any particular concerns, though speculatively(i.e. my impression) it could be considered an indicator that they do not expect to grow in the near future.

T-Shirt Turtle:
Does Konami have any other notable video game franchises besides Metal Gear and Silent Hill? Seriously, I'm drawn up blanks here. I'm pretty sure those two franchises (mostly Metal Gear) are all that is holding up Konami's video game division.

Castlevania will always be near and dear to my heart, but those are the three I know off the top of my head. Wikipedia indicates that they made (so likely still hold the rights to) Contra, Gradius, Dance Dance Revolution and Zone of the Enders. I hope that they're not closing up their games division or planning to halt English localizations... That's actually a pretty decent roster.

seventy two:
SNIP

I see... Wouldn't the shrewd investor sell now in the other stock markets due to a narrowing of scope/scale or at least the perception of it? It just seems like a bad image to admit you're not cut out for the global market but I'm uninformed.

Bedinsis:

Interesting watch and I recommend others checking out this article to look at it too.

T-Shirt Turtle:
Does Konami have any other notable video game franchises besides Metal Gear and Silent Hill? Seriously, I'm drawn up blanks here. I'm pretty sure those two franchises (mostly Metal Gear) are all that is holding up Konami's video game division.

Uhm, they still have Silent Hill, they just cancelled the one Kojima was doing. I'd wager they probably still have the Metal Gear IP rights too.

I'll just borrow wikipedia here

Not necessarily a strong lineup in the dedicated gamer sense, but a pretty good roster to keep them afloat, especially on mobile/handhelds.

lacktheknack:

My theory: Konami is now being run by EternalNothingness and is gearing up for its release of Sakura The Rabbit.

Oh man, imagine the images people would use for the articles! O.O

OT: I can understand this move more than any other Konami has made in recent memory. Konami just wasn't doing enough business on the NYSE to make it worth paying for.

Out of the major Japanese publishers, Konami is the one with the least market presence in North America. With Kojima leaving Konami, MSG will likely take a major hit to its popularity, and Konami doesn't have another hit franchise for the West to consume, which would make American investors anxious. Silent Hill and Castlevania are pretty popular, but they're still niche compared to MSG. It makes sense for them to de-list from the NYSE. They'll still release games in NA, since the games market is still there, but the investors' market for them is dried up in NA.

captcha: Red Queen. Captcha tells me that Capcom is the next on the list to de-list.

T-Shirt Turtle:
Does Konami have any other notable video game franchises besides Metal Gear and Silent Hill? Seriously, I'm drawn up blanks here. I'm pretty sure those two franchises (mostly Metal Gear) are all that is holding up Konami's video game division.

I think Pro Evo would be an important one, it was more popular than FIFA back in the day before they messed up the transition from PS2 to PS3 era. Even today it's the only serious competition that FIFA has and should provide some good guaranteed yearly income.

They have been moving the focus of it more to European studios over the past few years though.

Rawbeard:
I am fairly certain we have some weird japanese mindset at work here. Probably want to cut all ties to any market with dirty foreigners and switch to the pachinko market, or something.

That's closer to the truth than you might think.

OT: Voluntary de-listing. Just some business doing some business stuff, nothing that would imply Konami would kick the bed. (unfortunately)

Judging by Konami's financials, they've been doing badly money-wise for the last couple years, and not just in gaming. As I saw on another site:

"their operating income fell 64.8% in 2013(to 7,696 million yen) after falling 46.6% in 2012(to 21,875 million yen); they've seen an astounding 70.9% fall in net income in 2013(to 3,834 million yen) on the heels of a rather large 42.8% fall in 2012(13,174 million yen). Going by the date of the report, it'll be a bit before we see if they hit their 82.6% forecasted growth for 2014, but their track record doesn't exactly look pretty."

Not a great place to be

I would have almost said goodbye Konami but that would be a lie... in reality the company can fuck right off so it is good riddance instead.
Not much longer I hope.

I'm actually a little curious as what this means (if anything) for their gambling division.

If I recall correctly, they have a headquarters in Las Vegas that develops their machines, and they doubled the size of the property just a couple of years ago.

All I can say is if Konami does leave the market and does sell it's IP's, I hope Nintendo picks up a lot of their IP's, especially their Hudson IP's like Bonk, Bomberman and Adventure Island. I think Nintendo would know how to use them properly.

Whoever gets Metal Gear is going to run it to the ground, I can tell...

Maybe they got Kojimas bill for making the new Metal Gear game. lol

If Konami goes under maybe the Suikoden IP will be bought by someone. I know it is a longshot but I REALLY would love to see the series given life again.

Mr.Mattress:
All I can say is if Konami does leave the market and does sell it's IP's

That's a good one!
When in the time of ever did a company sell its IPs for no apparent reason?
When they go bankrupt yes... but they are not going bankrupt (yet).
You can bet Konami will sit on those IPs and let them rot before offering them to the market without financial pressure.

Ishigami:

Mr.Mattress:
All I can say is if Konami does leave the market and does sell it's IP's

That's a good one!
When in the time of ever did a company sell its IPs for no apparent reason?
When they go bankrupt yes... but they are not going bankrupt (yet).
You can bet Konami will sit on those IPs and let them rot before offering them to the market without financial pressure.

^This.
Unless they reach dire straits, they're going to let those IPs "Appreciate" in value relative to what the market wants before selling.

(same thing happened to System Shock 2)

But since this is an exposure-driven market (lots of offerings with relatively few major "hits"), chances are that the opposite is going to happen and those IPs will just languish in corporate Hell forever.

Depressing as hell, but that's the hideous nature of business for you.

So, Konami de-listed themselves from the NYSE because the volume of trades they make in the US (less than 3%) isn't worth the 5 million they need to pay to be regulatory compliant.

Also, for people who don't know - there is a bill working it's way through the Japanese government right now for the second time to legalize gambling casinos. Many people don't know this, but Konami doesn't do just video games. In fact, video games make up probably just a little bit over half of it's entire revenue, a good portion of the remainder comes from various business ventures, including making pachinko and pachislot machines.

Now, it's also known that while they closed Kojima's studio, they also consolidated all of their other video game engineering teams into their own divisions where previously they were attached to projects (titles). My speculation is that they are anticipating the gambling bill passing this time and they are restructuring themselves in order to produce a variety of gambling machines for the new industry. After all, they have already made products such as Metal Gear branded pachislots - so extending this seems like a reasonable business opportunity considering very few other companies will be in the position they are to capitalize on this new legislation.

I'm fairly certain that their restructure has more to do with this imminent gambling legislation than their actual financial health as a company (although the two may be intrinsically tied, I have no idea where Konami has been investing their money).

Pretty sure the LA branch is going to close down now.

Eh, I don't really care. If Konami dies, its IPs will be picked up cheap by other devs and that would be awesome. Imagine From Software making a Castlevania, or Yager making Silent Hill. If it doesn't, those other devs will still make those games if they want to, they just couldn't legally call them Castlevania or Silent Hill. And on the Kojima thing, he hasn't wanted to do Metal Gear in a while, so I'm interested in what other stuff he comes up with. Does Konami still hold the rights to Snatcher and Policenauts?

 

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