Konami Sees Kinect, Move Spurring Its Holiday Sales

A high-ranking Konami Corp. (KNM, 9766.TO) executive said brisk sales of new motion-based videogame products will propel the company's growth over the holiday season, even as the overall industry fights year-over-year declines.

Konami Digital Entertainment Inc. President Shinji Hirano said he was surprised by initial interest in Sony Corp.'s (6758.TO, SNE) Move and Microsoft Corp.'s (MSFT) Kinect motion-based platforms, both of which launched within the last two months. The devices are built to appeal to casual gamers who have gravitated to Nintendo Co.'s (7974.OK, NTDOY) Wii.

So far, sales have been brisk. Sony recently said it had shipped one million units of its new Move motion controller for the PlayStation 3 in the Americas during its first 30 days on the market.

The popularity of the new devices comes as the videogame industry combats a long soft patch caused by the global recession and subsequent weak economy. Videogame sales have dropped 8% so far this year and several companies, including Activision Blizzard Inc. (ATVI) and THQ Inc. (THQI), have issued disappointing forecasts for the upcoming holiday shopping season.

In an interview with Dow Jones, Hirano said Microsoft and Sony have done a good job differentiating their products from Nintendo's Wii, pointing to their integration with Facebook Inc. "Nintendo Wii doesn't have as many online features," he said.

Konami has already announced plans for both devices, including titles such as "No More Heroes: Heroes' Paradise" and "Dance Masters." Both titles take advantage of technology in the devices that allows users to control the game by using their bodies, rather than simply pressing buttons.

Hirano said downloadable content for video games will be important for the company and likely represent 20% of Konami Digital's holiday revenues.

Hirano said the declining dollar has been painful for the company as it repatriates revenue earned in the U.S. to Japan. That trend is likely to continue because of the Federal Reserve's recently announced plans to purchase $600 billion in U.S. government bonds, which may spur inflation and likely make the dollar even weaker against the Japanese yen.

Hirano declined to say how Konami plans to respond to the new measures, but did say that it is something being discussed across the company.

In the meantime, Hirano said he is focused on expanding Konami's sales by further integrating social networking services, and expanding to new markets such as Brazil, where interest in video games has begun to pick up.

-By Ian Sherr, Dow Jones Newswires; 415-439-6455; ian.sherr@dowjones.com

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