Final Results - Part 1

Konami Co Ltd
16 May 2000

PART 1

KONAMI C0.,LIMITED                                              May 16,2000
CONSOLIDATED FINANCIAL RESULTS - FISCAL YEAR 2000 (Year ended March 31, 2000)

(This consolidated financial results is translated from the Japanese
version which prepared under the general accepted accounting standards in Japan)

KONAMI CO., LIMITED (Parent company)
3-1, Toranomon 4-chome, Minato-ku, Tokyo, Japan
        Stock Code Number:       9766
        Shares Listed:           Tokyo Stock Exchange, Ltd. (First Section)
                                 Osaka Securities Exchange, Ltd. (First         
                                                               Section)
                                 London Stock Exchange, Ltd.
                                 Singapore Exchange. Ltd. (Main Board)

For further information, please contact: Noriaki Yamaguchi, Managing Director
Phone: [phone] http://www.konami.com

1. Date of Board Meeting on financial results: May 16,2000
2. Fiscal year 2000 Consolidated financial results (for the year ended March 31,
2000)

(1) Performance (Consolidated)                        (Figures truncated)

                   (Year on-year Operating (Year-on-year Ordinary (Year-on-year
             Net sales   change)   income       change)   income    change)
            (Y millions)   (%)  (Y millions)    (%)     (Y millions)    (%)

Fiscal 2000     146,666  (29.3)   30,938        (84.9)     31,103     (92.3)
Fiscal 1999     113,413  (26.5)   16,735       (128.5)     16,176    (159.6)

                                      Net income          Ord income Ord income
                 (Year-on- Net income per share Return on to assets  to sales   
                   year    per share  (fully    equity    ratio      ratio
       Net income  change)             diluted)  ratio
      (Y millions)  (%)       (Y)        (Y)       (%)      (%)      (%)

Fiscal
 2000      18,344   (259.4)  328.52     326.66    31.2     24.5     21.2
Fiscal
 1999       5,104     (2.0)  144.38     135.98    11.6     14.4     14.3

Notes:
1. Equity loss:   Y44 million (year ended March 31,2000)
                  Y- million (year ended March 31, 1999)

2. Unrealized gain or loss on marketable securities:        Y -7 million.
   Unrealized gain or loss on financial derivatives:        Y - million

3. Changes in accounting policy: Refer to Summary of Significant Accounting     
                                Policies

(2) Consolidated Financial Position

                        Total shareholders' Equity-assets  Total shareholders'
           Total assets        equity          ratio       equity per share
            (Y millions)  (Y millions)          (%)              (Y)
Fiscal
 2000           136,080       70,844           52.1           1,245.75
Fiscal
 1999           117,383       46,907           40.0           1,304.51

(3) Consolidated Cash Flow
           Cash Flow provided by (used in)
                Operating   Investing  Financing  Cash and cash equivalents,
                activities  activities activities          at March 31

Fiscal 2000        44,171      1,206     -11,147               57,365
Fiscal 1999             -          -           -                    -

(4) Consolidated subsidiaries
    Consolidated subsidiaries:                                    31
    Non-consolidated subsidiaries applied under equity method:     0
    Affiliated company applicable under equity method:             1

(5) Changes in consolidation scope and applicability of equity method
    Consolidated          (New) 2        Equity method    (New) 1
                     (Decrease) 0                    (Decrease) 0

2. Fiscal year 2001 forecast (Year ending March 31, 2001)

                                                           (Millions of yen)
                           Net sales    Ordinary income        Net income
   
Fiscal 2001 (Six months       70,500       10,000                5,500
 ending September 30, 2000)
Fiscal 2001 (Year ending)    147,000       23,500               13,000
March 31, 2001
  
Note: 1. Full-year consolidated net income per share forecast for fiscal year   
        2001 is Y114.30.
      2. A 2-for-1 stock split, resolved by the Board of Directors on
         February 8, 2000, will be implemented on May 19, 2000, on the
         total number of shares issued as of March 31, 2000. Thus the
         number of shares outstanding for the fiscal 2001 forecast is 
         113,737,566 shares.
      3. These estimates are forward-looking statements based on a
         number of assumptions and beliefs in light of the information
         currently available to management and subject to significant
         risks and uncertainties. Actual financial results may differ
         materially depending on a number of factors including, without
         limitation: general economic conditions in world markets;
         exchange rates between the yen and other currencies in which
         Konami Group makes significant sales and Konami Group's ability
         to continue to win acceptance of its products, which are offered
         in highly competitive markets characterized by continual new
         product introductions.


              1. Organization Structure of Konami Group

Konami group, specifies its business domain as the digital entertainment
industry by providing a wide range of entertainment via computers, is structured
by the Konami Co., Ltd. (the Company), 31 consolidated subsidiaries and 1
affiliated company applicable under equity method.

The divisions, the position of the Company, the consolidated subsidiaries and
the affiliated company under equity method in divisions concerned, and the
segmentation in divisions are applied as follows:

        Divisions                     Major companies
                            Konami Co., Ltd.
                            Konami Computer Entertainment Tokyo Co., Ltd.
                            Konami Computer Entertainment 0saka Co., Ltd.
                            Konami Computer Entertainment Japan Co., Ltd.
                   Domestic Konami Computer Entertainment Sapporo Co., Ltd.
Consumer-Use Software       Konami Computer Entertainment Yokohama Co., Ltd.
                            Konami Computer Entertainment School Co.,Ltd.
                            Mobile21 Co., Ltd., Konami Style. com Japan, Inc.
                            3 Others
                            Konami of America,Inc., Konami of Europe GmbH,
                   Overseas Konami (Hong Kong)Ltd.,
                            4 Others
                   Domestic Konami Co., Ltd. and 1 Other
Amusement Machines          Konami Amusement of America Inc.,
                   Overseas Konami Amusement of Europe Ltd.,Konami (Hong Kong)  
                           Ltd.,
                            3 Others
                   Domestic Konami Co., Ltd. and 1 Other
Gaming Machines             Konami Gaming,Inc., Konami Amusement of America Inc
(previous Game Machines)    
                   Overseas Konami Amusement of Europe, Ltd, Konami (Hong Kong) 
                           Ltd,,
                            3 Others
Creative Products  Domestic Konami Co., Ltd., Konami Music Entertainment Co.,   
                           Ltd.
                            Konamistyle.com
Amusement Operations  
                   Domestic Konami Amusement Operation Co., Ltd. and 1 Other
Finance            Domestic Konmai Capital Co., Ltd.
Others             Domestic Konami Service Co., Ltd., Konami Kosan Co., Ltd.    
                           and 1 Other
                   Overseas 3 Others

Notes:
1  The major products of each division are stated in the Note 1 of '5 Segment
   information, (1) Operations in Different divisions'.
2. The companies that are running multiple businesses are included in the       
  number of companies of each division respectively.
3  The Pachinko Systems division was transferred to Amusement Machines
   Division and Gaming Machines division as from March 31, 2000.
4  Game Machines Division changed its name to Gaming Machines Division by end   
  of the year under review.


                              2. Management Policy

1. Management Policy

Currently, Konami carries out its operations based on the primary keywords
'Competition, Global standards, and High profits'. In other words, Konami
innovates its operations to increase value to shareholders and maintain high
profitability by avoiding conventional business practices, ascertaining areas of
cooperation and confrontation, and evaluating its performance based on global
standards.

Konami specifies its business domain as the digital entertainment industry, in
the general sense of entertainment provided via computers, surpassing the
conventional concept of computer games. We have received solid support from and
established an excellent reputation among consumers by providing a wide array of
exciting digital offerings. Our goal is to establish a position of respect as a
company with products covering every aspect of the digital entertainment
industry, from hardware to software and services.

2. Profit Appropriation and Dividend Policy

Konami regards the provision of stable dividends and improving corporate
value-or shareholders' value-as important means of returning profits to
shareholders.

Our policy is to set the target for total dividends at 30% of consolidated net
income and will strive toward continuous increases in dividends per share.
     
The reinvestment of cash flow efficiently improves corporate value in the
fast-growing digital entertainment industry. With the aim of maintaining a
Return on Equity higher than 15%, we work from a long-term point of view by
promoting the retirement of treasury stocks and placing investment priority on
the development of new products and businesses.

3. Midterm to Long-Term Strategies

The boarders between industries such as games, movies, music, toys, hobby,
publishing and broadcasting are steadily disappearing, significantly expanding
the scope of the digital entertainment industry. In this situation, business
alliance , outsourcing and other new strategies of doing business are growing
more sophisticated. For Konami to continue growing amidst this furious change,
we have placed utmost emphasis on our brand image, production capability
marketing strength, and financial resources. Accordingly, we endeavor to make
strengthen in these areas and actively seeking business innovation, with a
readiness to pursue M&A and business cooperation.
     
In addition, to enhance the management of the Konami Group, we are creating a
stable and robust management system and financial position while promoting the
public offering of shares of Konami Group companies and the disclosure of
information.

4. Company Priorities

Over the years, Konami has diversified its operations while building a system in
which each division operate independently to achieve profitability. In the year
under review, a product strategy spanning all operations produced synergy that
stimulated an increase in profitability, as demonstrated by a consolidated
operating profit ratio of 21.1 %.
     
Despite the ongoing global expansion of the digital entertainment industry, the
position occupied by Konami still leans toward the Japanese market. However, we
believe that meeting the challenge of global competition and establishing a
solid position in overseas markets will lead to greater operational efficiency
and stabilized growth and profits.

                                3. Performance

1. 0verviews

In the year under review, government measures to revive the Japanese economy
spawned expectations of a rebound in private sector capital investment, although
consumer spending remained conspicuously sluggish. Investment in information
technology was particularly strong thanks to expanded use of the Internet.
     
In this environment, although affected by the slump in consumer spending, Konami
and other companies in the digital entertainment industry that were able to
produce and market products suited to the newest trends and consumer preferences
managed to secure superior positions in the marketplace.

Konami has earned the support of a wide range of consumers by creating a diverse
line of products by taking full advantage of business division synergies. For
example, in the music-simulation game genre - which we pioneered last year by
introducing new, widely popular amusement machines in Japan - we
adapted existing offerings into new home video games. Also, we promoted
new consumer products, including a card game based on one of our popular
home video games. As a result, the Konami Group posted record consolidated sales
of over Y 140 billion.

The past year has seen two rapid developments in the digital entertainment
industry. One has been a shift to network-based entertainment, which has led to
sharp growth in the distribution of content via cellular telephones and the
Internet. The second has been the development of an industry spanning diverse
sectors, thereby stimulating alliances among companies in the music, movies,
broadcasting, publishing and toy industries, designed to develop characters
through effective media mixes.
     
The home video game market is now undergoing a generational change in hardware
platforms. Last year saw the release of the PlayStation 2, the offspring of the
original PlayStation, which has acquired an overwhelming share of the world
market. This year will witness the release of Nintendo's Game Boy Advance, and
next year Microsoft will launch its X-Box.
     
Konami is now moving to respond to these rapid environmental changes and to the
severe competition arising as companies riding the crest of this wave try to
gain an edge by forming alliances aimed at expanding overseas. Our activities
include the conclusion of a cross-licensing contract with Microsoft in May 1999;
the October 1999 establishment of joint venture company Mobile21 Co., Ltd., with
Nintendo to create a new portable game market; an alliance with radio
broadcaster TOKYO FM in the FM broadcasting-based entertainment field in October
1999; a licensing agreement with Disney Interactive for the ESPN name,
the world's top sports channel, in November 1999; and a strategic alliance for
the production and distribution worldwide of interactive movie games with
Universal Studios of the United States in December 1999.

In activities related to net games, Konami commenced distributing content aimed
at NTT DoCoMo's iMode system in January 2000. Meanwhile, in keeping with the
multiplatform strategy we have pursued until now, we moved quickly to introduce
home video game software for the PlayStation 2.

In another accomplishment, in January 2000 we became the first publicly listed
Japanese company to acquire a license for the manufacture of casino slot
machines in the state of Nevada, U.S.. At the same time, subsidiary, Konami
Gaming, Inc., acquired a license for the manufacture and sale of casino slot
machines in Nevada, enabling the Konami Group to participate in earnest in the
U.S. casino slot machine market, the world's largest. Moreover, to further
promote our strategy of globalization we listed Konami shares on the London
Stock Exchange in September 1999, following our listing on the Singapore
Exchange Ltd. in November 1997, thereby enhancing our presence overseas.
  
Amid the dramatic changes in the digital entertainment industry and growing
competition between industries and companies, Konami has implemented a bold and
aggressive business strategy aimed at expanding its operations on a global scale
and stabilizing its business. We have also succeeded in maximizing the
synergistic effects produced among our diverse areas of operations in order to
solidify our status as the leader in music games. As a result, Konami Group
achieved a record high in consolidated sales for fiscal year 2000, to Y146.7
billion, an 29.3% increase.

Performance by Division

In the year under review, the Consumer-Use Software Division again released a
wide range of new products in the domestic and overseas markets. Notable among
these were Dance Dance Revolution and Dance Dance Revolution 2ndReMIX for the
PlayStation, which adapted from our highly popular amusement machines. Other
products included YU-GI-OH! DUEL MONSTERS II -DARK DUEL STORIES for the Game Boy
Color, which sparked a boom by mixing the media of magazines and card games, and
YU-GI-OH! SHIN DUEL MONSTERS -FUINSARESHIKIOKU- for the PlayStation, which
contributed significantly to sales growth. In addition, two products-JIKKY0
POWERFUL PRO BASEBALL '99 KAIMAKUBAN and INTERNATIONAL SUPERSTAR SOCCER PRO
EVOLUTION for the PlayStation-met with high acclaim from users and solidified
Konami's reputation as the leader in sports games. Other major titles included
MUSCLE RANKING VOL. 1, TOKIMEKI MEMORIAL 2, GUITAR FREAKS and JIKKYO POWERFUL
PRO BASEBALL '99 KETTEIBAN for the PlayStation.  Overseas titles included
METALGEAR SOLID VR MISSIONS and SILENT HILL. As a result, sales of the
Consumer-Use Software Division was: Y61.3 billion, a decrease of 2.4%.

In the Amusement Machines Division, the dance-simulation series Dance Dance
Revolution continued to attract the high acclaim it gained last year, becoming a
hit not only in Japan but also in Korea and other Asian countries. Konami also
introduced variations of its music-simulation game DRUM MANIA and GUITAR FREAKS
series to solidify its status as the leader in music-simulation games in the
amusement machine market. In addition, SILENT SCOPE, a new type of gun-shooting
game, became a worldwide hit, while peripheral devices for consumer-use
software, such as a special controller for Dance Dance Revolution
manufactured in collaboration with the Consumer-Use Software Division and
D.D.R. KARAOKE MIX, manufactured through a tie-up with Daiichi Kosho Co.,
Ltd., contributed to sales growth. As a result, sales of this division
grew 148.0%, to a record Y25.3 billion.
     
In the Game Machines Division, the beatmania disc jockey-simulation series, the
music-simulation KEYBOARD MANIA game and Pop'n Music series scored hits, as did
GI-LEADING SIRE, with its training-simulation function, in the medal game
machines field. Also, the large and mid-sized medal machines TWINKLE DOME and
DRAGON PALACE REACH TENGOKU sold briskly.  What's more, sales of components for
video slot machines for the Australian market increased. As a result, sales in
this division totaled Y13.0 billion, a decrease of 2.4%.

In the Pachinko Systems Division, Konami's products designed to maximize the
entertainment value of games achieved high acclaim and favorable sales. The
division reported a 21.3% advance in sales, to a record Y13.2 billion.

In our Creative Products Division, YU-GI-OH! OFFICIAL CARD GAME DUEL MONSTERS
sparked a major boom owing to the synergy produced with magazines and the
Consumer-Use Software Division. Thanks to the contribution of an effective
campaign of special events and other activities, sales were stronger than in the
previous year. As a result, sales of the division hit a record of Y27.8 billion,
up 201.4% from the previous year.
     
In April 1999, our Amusement Operations Division was shifted from the main
Konami organization to subsidiary Konami Amusement Operation Co., Ltd., to
clarify the system of responsibility, improve business efficiency and expand
sales and income. In fiscal 2000, reevaluated the number of outlets we manage,
opening four new outlets, including our largest facility located in Yokohama's
Tsuzuki Ward, and closing two unprofitable facilities, bringing the total to 21.
We also held events and game tournaments to improve our ability to attract
customers. These efforts supported an 1.7% increase in sales by the division, to
a record Y4.5 billion.

In addition, sales of the finance and other divisions amounted to Y1.6 billion.
     
As from March 31, 2000, the operations of manufacturing software with LCD units
for pachinko machines were transferred from Pachinko Systems Division to
Amusement Machines Division, the operations of manufacturing Pachinko slot
Machines were transferred from the same division to Gaming Machines Division.
Furthermore, as from March 31, 2000, the operations of manufacturing the disc
jockey-simulation and music-simulation game machines were transferred from the
Gaming Machines Division to Amusement Machines Division.

The significant increase in net sales, boosted notably by expanded sales of
high-return products, supported a record high in Recurring profit to Y31.1
billion. In addition, in order to achieve a more sound Group assets, we sold
some our real estates -dormitories, company houses, on which approximately Y5.6
billion losses occurred accordingly. On the other hand, an extraordinary income
of Y7.0 billion was realized mainly on the initial public offering of shares of
one of our consumer software producing subsidiary, Konami Computer Entertainment
Osaka Co., Ltd. (KCEO). As a result, consolidated net income reached a record of
Y18.3 billion.

Further, in recognition of our excellent consolidated financial results during
fiscal year 2000, we took steps to return profits to shareholders, increasing
the year-end dividend by Y54 from the preceding year to Y97 per share of common
stock, including an interim dividend of Y45.

2. Outlook for Fiscal Year 2001

Although Konami has grown into a leading company in the digital entertainment
industry, it plans to move to a higher level by maximizing the business
partnerships it actively developed in fiscal 2000 and by placing greater
emphasis on overseas operations. We will also pursue development on a global
scale, positioning our overseas casino slot machine operations as a new pillar
of the Konami Group.

In April 2000, to improve the effectiveness of our domestic sales network we
reevaluated our regional structure and reduced the number of sales dealers from
13 to 11. Furthermore, in a move to gain an early foothold in the electronic
commerce field in April 2000 we started the business on the internet through the
Konami Style.com Japan, Inc.. We plan to meet our customers' diverse preferences
by using our existing sales network, with its close regional ties, and Internet
distribution, while complementing each other mutually.

In fiscal year 2001, we anticipate consolidated sales of Y147.0 billion, a 0.2%
increase, consolidated ordinary income of Y23.5 billion, a 24.4% decrease, and
consolidated net income of Y13.0 billion, a 29.1% decrease.


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