KADOKAWA ANNUAL REPORT 2006

As to publishing business, 7 companies (Kadokawa Shoten, Media Works, Kadokawa SS Communications, Enterbrain, Ascii, Kadokawa Gakugei Shuppan and Fujimi Shobo that became independent from Kadokawa Shoten) are developing business in their respective realms of expertise. While other publishing companies are anxious about their management, we split up into separate companies actively in order to further enhance our planning, editing and marketing ability and monitor/respond to the changes in the needs of the market. We intend to get this only-one-system through splitting up into separate companies on track, reinforcing the ability of each publishing company to create excitement/story contents and enhance competitive strength through usage of the common infrastructure of the group.

Volumes 1 and 2 of “The Da Vinci Code” written by Dan Brown were released in April, 2004 from Kadokawa Shoten and became extremely popular, and it shows good sales continuously in this year and became a big long seller book. Moreover, Kadokawa Bunko paperback pocket edition of “The Da Vinci Code” (Volume 1, 2 and 3) released in March, 2006 had explosive sales with the number of copies shipped exceeding 1 million as of the end of the term, which was within less than a month. The movie was released at the end of May simultaneously throughout the world and this boosted the sales even further. Cumulative sales of both books and bunko edition exceeded 10 million copies, which is a record in Japanese publishing history for a single novel, and it is still extending the new record and is the biggest-hyped book in the industry. We believe that the consistent honest efforts we have made to generate content while believing in the planning, editing and marketing abilities and power of the novels that our group has enhanced systematically and organizationally for a long time allowed us to attain such a tremendous history making result.
Apart from “The Da Vinci Code”, “Deception point” written by the same author, Dan Brown, “Narratage” by Rio Shimamoto and “F.S.S. DESIGNS” by Mamoru Nagano became good sellers, and the non-fiction book Charles R. Jenkins's “To tell the truth” created a sensation among mass-media since just after its release and boosted its sales. In the Bunko section, volume 1 and 2 of “Shisso (running like the wind)” by Kiyoshi Shigematsu and “First priority” by Fumio Yamamoto made a good result, and the popular series “Battery” by Atsuko Asano, “Saiunkoku Monogatari” by Sai Yukino and “Shakugan-no Shana” written by Yashichiro Takahashi and published by Media Works are showing good sales.
From the “Kadokawa One Theme” series of new books, “Ketsudanryoku (decision)” by Yoshiharu Habu and “Giants theory, what is organization, what is a human being, what is tradition” by Katsuya Nomura have become topical.

In the comic book segment, a series published by Kadokawa Shoten “New century Evangelion” by Yoshiyuki Sadamoto, which has retained its popularity for a long time, “Multiple personality detective Psycho” a series published by Shou Tajima and Eiji Ootsuka, “Gundam” by Yoshikazu Yasuhiko, “Yotsubato!” published by Media Works and written by Kiyohiko Azuma and “Emma” published by Enterbrain and written by Kaoru Mori became big hit books. The “Sergeant Keroro” series by Mine Yoshizaki showed a good result on media mix with TV animation and was also released as a theatrical movie in March, 2006. Publications associated with this series and product development into goods, etc. are also showing great results.
With regard to the books related to games, “Oideyo Doubutsu-no-mori perfect guide book”, “Monster hunter official guide book” and “Romancing Saga ~ Minstrel song ~ Perfect guide” published by Enterbrain and “Oideyo doubutsu-no-mori: The Complete guide” published by Media Works were supported by the popularity of games and increased sales.

The market for light novels in which Kadokawa Shoten is undertaking a pioneering role in the world of publishing is expanding and booming. “Light novel” is a generic term for novels aimed at young adults and teenagers. Moreover, the literary awards sponsored by each label provide a great opportunity for the discovery of new writers, and these novels are not only made into comics and animations but there is also a growing movement toward character business content. The four companies of Kadokawa Group; Kadokawa Shoten, Media Works, Fujimishobo and Enterbrain publish novels in this genre. The share of the market for these four companies together is as large as 70%.

In magazine business, we split off the editing sections of the “Walker” series and “The Television” into separate companies and integrated them with subsidiaries related to IT and digital contents. Each of them will promote enthusiastically “Cross media business” combined not only with paper media but also with the Internet and mobile phones, which are expected to show great growth. With these efforts, we hope to achieve a unique multilayered business expansion of our company group in the information content business and associated advertisement business.
Apart from the above mentioned magazines, an animation comic magazine “New Type” published by Kadokawa Shoten, a game information magazine “Weekly Famitsu” published by Enterbrain, a game information magazine “Dengeki Play Station” and a hobby magazine “Dengeki HOBBY MAGAZINE” published by Media Works, a life style information magazine “Lettuce club” published by Kadokawa SS
Communications, a PC information magazine “Weekly ASCII” published by Ascii and a horse racing information magazine “Sarabre” published by Enterbrain maintained steady sales with firm brand power in the background of their respective fields.