China Post Securities has released a research report stating that the business models in the IP and collectible toy industry can broadly be categorized into two types: star-making (IP platformization) and star-chasing (IP commercialization). Most companies initially adopt the star-chasing model, with the ultimate goal being the star-making model. Reviewing their development paths, they can be roughly divided into three categories: 1) those starting from toys, such as Lego, Hasbro, and Mattel; 2) those starting from distribution channels, such as Sanrio; and 3) those starting from content creation, such as Walt Disney and Nintendo. The development of China's IP industry started relatively late. At the current stage, the report believes there are opportunities for both star-making (IP platformization) and star-chasing (IP commercialization) companies. The main views of China Post Securities are as follows:
Bandai Namco: An Entertainment Business Legend Spanning Multiple Fields
Bandai Namco was formed in 2005 through the merger of Japan's Bandai and Namco. As a benchmark enterprise in the global entertainment industry, it centers on an "IP Axis Strategy," adhering to the development philosophy of excavating IP value and connecting with global fans. Its business covers four major areas: Digital, Toys and Hobbies, IP Production, and Amusement. As of fiscal year 2025, Bandai possesses well-known IPs such as Gundam, Dragon Ball, and Tamagotchi. Within its core business, the Toys and Hobbies segment accounts for 46.30%, developing synergistically with other operations. Financially, revenue grew over 2.7 times from fiscal 2006 to 2025, reaching 1,241.5 billion yen in fiscal 2025. In regional markets, Japan serves as the core foundation, while the United States (with growth exceeding 40% in fiscal 2025) and Asia (excluding Japan, with a compound annual growth rate of approximately 15%) have become the main drivers of overseas growth. In terms of profitability, operating profit margin and net profit margin attributable to owners of the parent have shown a fluctuating upward trend overall, with strong IP operational capabilities providing solid support for profit stability.
Development History: From Independent Ventures to an IP Strategy-Driven Global Entertainment Landscape
Bandai Namco has gradually built a global entertainment landscape centered on IP through three distinct phases. (1) 1950s-2004: Bandai entered the low-end toy market, rising to prominence with alloy toy cars, glue-free snap-fit technology, and IP merchandise. Namco transitioned from traditional amusement facility operations to electronic games, establishing its industry position with arcade hits like Pac-Man. In later years, both faced developmental bottlenecks such as over-reliance on single business lines and difficulties in cross-industry expansion. (2) 2005-2010: Bandai and Namco merged to form Bandai Namco. However, due to internal departmental silos, resource wastage, and intensified external market competition, performance remained under pressure. (3) 2010 to present: Centered on the "IP Axis Strategy," the company has undergone multiple iterations of mid-term plans and organizational restructuring, breaking down business barriers to foster synergy, simultaneously accelerating global expansion. This has led to a comprehensive performance recovery and the construction of an IP-centric entertainment ecosystem.
Hit IPs: Looking Back at Gundam and Tamagotchi
Bandai Namco's hit IPs are typified by Gundam and Tamagotchi. Both, by accurately capturing user needs and trends of their times, have become classics spanning decades. Gundam is a mecha IP launched in 1979, building a grand narrative system around the "Universal Century" universe and spawning diverse worldviews. It has also evolved its IP form in line with technological and communication trends, expanding from TV anime to streaming works and short video dissemination, and from traditional plastic model kits to digital collectibles and VR experiences. Furthermore, it has created an IP metaverse through online virtual communities, offline Gundam Base facilities, and cross-industry collaborations, becoming a benchmark in mecha culture. Tamagotchi is an electronic pet IP launched in 1996. Initially, its lightweight design and simple operation suited Japan's fragmented commuting scenarios and accurately resonated with the prevailing social psychology, leading to explosive popularity upon release. It has continued to iterate with the times, catering to the needs of different audiences, and global sales have now surpassed 100 million units.
How Does Bandai Namco Build Its Multi-Domain Entertainment Business Empire?
Bandai Namco's competitive advantages are concentrated in its end-to-end IP operational capabilities, constructing a multi-domain entertainment business empire through three core dimensions. First, the "dual-engine drive" of IP reserves: building a vast IP matrix covering diverse audiences through a parallel model of in-house incubation and strategic acquisitions, precisely meeting the needs of different groups and continuously adapting to era trends, thereby completing the IP type and market coverage. Second, the "synergistic architecture" of IP development: centered on the IP Axis Strategy, establishing a collaborative system of "Four Core Business Units + Key Functional Departments," covering the entire chain of IP incubation, production, and transformation to efficiently excavate IP value. Third, the "fan closed loop" of IP operations: centered on fan economy, building an ecosystem in three steps to form a sustainable IP operational cycle.
Risk Warnings
Risks include intensifying market competition; declining popularity of existing IPs; new IPs failing to meet expected popularity; and overseas development falling short of expectations.
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