Growing Keiko Erikawa’s asset management into a profit source to rival the games (2024)

What it means for a game company to also own an investment firm

The heart of this decision, one could say, lies in deliberately carving the investment arm — which had long served to absorb the swings of the core business — out into a separate company and making it visible. Leave the investment gains dissolved into the parent’s accounts and the reported ordinary profit looks flattered for the time being. But what institutional investors wanted was to judge the earning power of the games business itself apart from investment income, and Koei Tecmo answered that demand structurally, by turning the investment function into an independent company. A game-software maker holding a subsidiary devoted purely to investment management has almost no parallel among its peers.

That said, carving out the investment company does not by itself dissolve the underlying dependence on investment income. Even after the split, quarter after quarter there are still results the investment gains push higher, and Koei Tecmo’s management philosophy seems unsettled still — whether to cast the growth of the core business as the lead, or to press its combined strength, the skill of its investing included, as the advantage. How far a record of investing tied to Keiko Erikawa personally — an “investment genius” — can be converted into something a team can reliably repeat has become the next focus of this financial strategy.