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Press Release
Bandai Co., Ltd. (7967)
Head Office: 2-5-4 Komagata, Taito-ku, Tokyo
President: Takeo Takasu
Capital: 23.6 billion yen
Bandai to Spin-off Networking Business

Tokyo, Sept.4, Bandai announced to spin-off its Networking Business.
In an effort to expand on its online business efforts and strengthen its overall business operations, Bandai Co., Ltd. will spin off its network business as a separate company.

The fully-owned subsidiary, Bandai Networks Co., Ltd., will primarily focus on the entertainment business which includes contents delivery services such as gItsudemo Charappa!h and network business operations represented by gLaLaBith, an entertainment site for network games and mail order through the network.

A Profile of the Planned Company
(1)Company Name Bandai Networks Co., Ltd.
(2)Registered Address 2-5-4, Komagata, Taito-ku, Tokyo
(3)Business Address 2-7-3, Taito, Taito-ku, Tokyo
(4)Establishment Date September 7, 2000 (Business scheduled to commence on October 1, 2000)
(5)Capital \500 million (fully-owned subsidiary of Bandai Co., Ltd.)
(6)Business Operations Contents delivery service for Smart Phones
Website Business (Management of entertainment sites, etc.) and more
(7)Shares \50,000 per share
Total number of shares to be issued: 40,000
Initial number of shares to be offered: 10,000
(8)Fiscal Year Closing Date March 31st of each year
Takeo Takasu Chairman
Toshiki Hayashi President & Chief Executive Officer,
Representative Director
Toyoshi Takahashi Chief Technical Officer, Director
Yukinori Inoue Chief Financial Officer, Director</TD>
Takashi Shoji Director
Yoshitaka Tao Director
(10)Number of Employees: 35

Business Activities
Bandai Networks Co., Ltd. will undertake the following business activities:

(1)Contents Delivery Services for High Performance Phones
Mobile phone-based delivery services such as character images for the stand-by screen, incoming call melodies, and network games.

  • Contents are supplied to the following operators & mobile phone services:
  • NTT Docomo (i-mode), J-PHONE (J-skyweb), au (EZ-Web), LG Telecom (ez-WEB), and others.
  • Representative contents as of August 2000 include:
  • *Character image delivery services for wait screens such as the "Charappa!" series (i-mode), "Machiuke Deruchara!" (J-skyweb), "Machiuke Chara-Getter" (EZ-WEB), and others.
    *Incoming call melody delivery service, "Itsudemo Melodypa!".
    *Network games and other services such as "Dokodemo Asovegas"/"Ren-Ai Jozu" (i-mode) and "Ringing" (J-skyweb), etc.

    (2)Website Business
    Management of internet entertainment web site for the supply of services such as network games (fee-based), direct sales of limited production products, and entertainment news.

  • Management of the "LaLaBit" entertainment site.
  • *Management of interactive network games such as "Treasure of Genum" and "Mystic Grapple".
    *Mail order through the Internet of various character goods and other products.

    (3)New Business Development
    Development of various new businesses based on network technology.

  • WonderGate
  • Research and development of "WonderGate" a communications adapter which allows mobile phones to be connected with Bandai's handheld game hardware "WonderSwan" for net-surfing and email communication.

  • Bandai Networks Co., Ltd.'s Strongpoints

  • Bandai's network business currently includes the supply of various contents for mobile phone services including "i-mode", "skyweb", "EZ-Web". At present, the company is earning recognition as a major provider of pay contents. This recognition is result of various factors which include:

    (1) Bandai's know-how with respect to character merchandising and creative entertainment.
    For approximately thirty years, Bandai has built on its character development know-how for its core business of character merchandising. Added to this Bandai's creative entertainment know-how has entertained millions. These strengths are currently key elements in the company's network entertainment services that are enjoyed by many.

    (2) Server management and technological know-how.
    From its past activities, Bandai has maintained programming and system development know-how for business-based network technology. As a result, Bandai has developed its own server system which allows 12 million views per page* on a daily basis. This technological development allows the operation of a low-cost server.

    * Total views per page of mobile phone and website contents as of end of August.

  • A Variety of New Contents for Various Services

  • Given the substantial increase in the number of high-performance mobile phones today, an even more significant growth is expected with the introduction of new technologies such as "JAVA", "IMT-2000", and "Bluetooth".

    In this rapidly changing network business environment, Bandai Networks Co., Ltd. Will continue to provide timely entertainment services using the latest technologies.

    In order to provide contents with the launch of new high-performance mobile phones, Bandai has stepped up its research and development efforts for various new technologies.

  • The Commencement of Overseas Contents Delivery Services

  • Recognition of Japanese characters has rapidly increased on a worldwide basis. As of August 2000, Bandai provides a "Character Image Delivery Service" which is widely accepted by users in Korea for LG Telecom's high-performance phones.

    Given the fact that Japanese characters such as "Digimon" and "Gundam" are gaining in worldwide popularity, Bandai intends to position itself to offer similar contents services for various countries in line with the growth of their high-performance mobile phone business.

    In addition, Bandai has reached an agreement with Lucent Technology in the United States on the joint business development of "Wireless WonderGate", a network business effort that employs Bandai's own hardware platform. With this joint effort as a starting point, Bandai hopes to provide users worldwide with a fun and easy-to-use handheld communication terminal.

  • Establishing Joint Business and Joint Capital Efforts with Various Companies.

  • Keeping in mind the future growth and progress of the network business, Bandai believes that partnerships with network-based business enterprises, character merchandizing licensors, and technology-based companies to be essential to its growth strategy. Although Bandai Networks Co., Ltd. will be established as a fully-owned subsidiary, Bandai intends to actively develop partnerships through joint business and joint capital efforts.

  • Achieving a Public Offering of Shares.

  • For the future, Bandai Networks Co., Ltd. plans to conduct a public offering of shares. For the growth and progress of its network business, Bandai must not only establish a strong reputation, but must operate a firm and healthy business organization that is capable of growing as an independent public company. Through public offering, Bandai believes that the company can ensure a high-growth incentive among its officers, employees, and joint business/capital partners. Moreover, by investing the capital raised from the public into the development of new technologies/contents and overseas business efforts, Bandai aims at further strengthening and expanding its network business.

  • The Establishment of a Strong Incentive Program.

  • Effective growth in the network business environment requires outstanding personnel with a variety of technology and know-how. To secure the services of these individuals, Bandai Networks Co., Ltd. will adopt an incentive program to reward the efforts and capabilities of its staff. Currently, Bandai is considering stock options and various incentives that are aimed at raising corporate awareness among its officers and employees.