Konami Q1 results significantly exceeded expectations, with eFootball revenue growing approximately 78% driven by the World Cup

Overview

This report is Bernstein's review of Konami Group Corporation's (9766.JP) Q1 FY3/27 results. The report views the company's results as very strong, driven primarily by robust eFootball revenue growth fueled by World Cup excitement. Group revenue, operating profit, and the Digital Entertainment segment all significantly exceeded Bernstein's forecast and market consensus.

Core views

The core view is that Konami's share price should react positively to the results in the short term, while medium-term fundamentals remain supportive. Although the market was concerned that eFootball monetization could slow in the second half of FY3/27 after the World Cup, management emphasized on the earnings call that new users acquired during the World Cup were showing strong retention, the eFootball market was still growing, and July billings remained above June levels. The report maintains its Outperform rating and believes that growth in eFootball users and monetization, lower mobile platform fees, and progress on console games will drive continued growth.

Analysis framework

The report combines earnings comparisons, segment analysis, high-frequency game billings data, and valuation multiple updates. Key areas of analysis include the extent to which Q1 revenue and operating profit exceeded Bernstein's forecast and market consensus, the contributions from mobile and console/PC revenue within Digital Entertainment, Sensor Tower's indication of July eFootball billings trends, and the target price adjustment under the FY+1 P/E valuation framework.

Methodology notes

• Valuation methodsP/E multiple

  FY+1 P/E valuation

  Bernstein values Konami at 25x FY+1 EPS, arriving at a target price of JPY27,200 per share; the previous multiple was 26x.

• earnings_reviewEstimate and consensus beat analysis

  Earnings beat analysis

  Q1 FY3/27 actual revenue and operating profit are compared with Bernstein's forecast and market consensus to measure the magnitude of the earnings beat.

• operating_analysisHigh-frequency billings tracking

  High-frequency billings tracking

  The report cites Sensor Tower data showing that July eFootball billings were 24% higher than in June and 36% above the Q2 monthly average, supporting an assessment of Q2 momentum.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• 9766.JP

  Research subject

  Strengths

  eFootball achieved strong World Cup-driven growth, with robust user retention; Digital Entertainment margins are high; mobile and console/PC revenue both exceeded expectations; Silent Hill Townfall orders were strong.

  Weaknesses

  eFootball monetization may slow in the second half of FY3/27; some smaller businesses make limited contributions to group growth.

  Comparison

  Q1 group revenue was 8.0% above Bernstein's forecast and 5.9% above consensus; group operating profit was 21.5% above Bernstein's forecast and 17.7% above consensus.

  Risks

  Performance of key live service games, the success or failure of new console game launches, operating leverage, the timing of future game releases, and the impact of a macroeconomic slowdown on demand for video game consumption.

Key data

• RatingOutperformBernstein maintains its rating.
• Target priceJPY27,200Raised from the previous target price of JPY26,800.
• Current priceJPY21,840The table shows the date as July 30, 2026.
• Q1 FY3/27 group revenueJPY130bn / JPY129.5bnUp 33.6% year on year, 8.0% above Bernstein's forecast and 5.9% above consensus.
• Q1 FY3/27 group operating profitJPY45.3bnUp 63.3% year on year, 21.5% above Bernstein's forecast and 17.7% above consensus.
• Digital Entertainment revenueapproximately JPY100bn / JPY100.1bnUp approximately 36.5% year on year, above forecast and consensus.
• Digital Entertainment operating profitJPY43.9bn26.9% above Bernstein's forecast and 23.3% above consensus.
• eFootball Q1 revenueapproximately JPY52bnIncluding approximately JPY43bn from mobile and JPY9bn from console/PC.
• Mobile game salesJPY65.4bnUp 65% year on year, representing approximately 65.3% of Digital Entertainment revenue.
• Valuation multiple25x FY+1 P/EUsed to calculate the JPY27,200 target price.

Impact & implications

The report's implications are positive: strong Q1 results and management's guidance that Q2 eFootball revenue will be at least flat versus Q1 should support upward revisions to near-term earnings expectations for Konami. If investors price the stock based on fundamentals over the next six to nine months, the report believes that selling Konami immediately after the World Cup could underestimate the resilience provided by user retention, subsequent content updates, and new game launches.

Risks

• Key live service assets such as eFootball, baseball, and Yu-Gi-Oh! perform below expectations.
• New console game launches perform poorly, including orders, sales, or user reception falling short of expectations.
• eFootball monetization slows more than the market expects in the second half of FY3/27.
• Operating leverage and the timing of future game releases fall short of expectations.
• A severe macroeconomic slowdown could weaken consumer demand for video games.

What to watch

• Whether Q2 eFootball revenue can remain at least flat versus Q1.
• Whether eFootball mobile billings remain elevated in July and subsequent months.
• Retention and payment conversion among users acquired during the World Cup.
• The impact of new features in the August summer update on new-user engagement.
• Launches and order performance for new titles including MGS Master Collection Vol. 2, Silent Hill: Townfall, and Castlevania Belmont’s Curse.
• Whether a slowdown in eFootball monetization in the second half of FY3/27 affects earnings expectations.