The Hollowing of Bandai Namco
After the absolute state of Code Vein 2 recently, I decided to take a proper look at Bandai Namco. On the surface, they look like a titan posting massive revenue numbers, and to the casual observer, everything seems fine. The reality is that they are in a far worse position than I thought. Their digital division is structurally weaker now than it was before they published Elden Ring, an insane thought given how much money that game made. Take a look at their digital division profit reports:
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The FromSoftware Divorce:
The biggest hit to their gaming division isn't even a failure they made, but a success they lost. FromSoftware is going independent. They are self-publishing now, backed by Sony and Tencent, and they have bought back the Elden Ring IP.
If you didn't know, Bandai Namco does not own FromSoftware. For years, FromSoft was essentially printing infinite money for Bandai just for being the global publisher. It gave them decades of unearned prestige. Elden Ring: Nightreign is likely the last time Bandai gets to put their logo on a FromSoft title. While Bandai might still own the trademark to Dark Souls, they have lost the cultural powerhouse that actually makes the games. The goose that laid the golden eggs has packed its bags and left the building.
A Parade of Self-Inflicted Disasters:
Then you have their internal output. I’ve already talked about the Code Vein 2 tragedy, but let's be real about the sheer scale of their recent failures.
First, Blue Protocol. This was a catastrophic financial black hole. They incinerated £150m+ on a live-service anime game that was dead on arrival in Japan and cancelled globally before it even launched. It wiped out massive profits from other sectors and proved they are incapable of running a modern online game.
Then there is Unknown 9: Awakening. Remember that? No? Exactly. This was supposed to be their massive new multimedia franchise. They hired Anya Chalotra, the Witcher actress, to be the face of it, then deliberately dialled back her looks to chase a "modern audience" that doesn't exist. In interviews, she barely seemed to remember what she did in the role. It was garbage Western trends chasing nonsense that burned cash and proved Bandai has zero understanding of what gamers actually want.
And we can't forget the Gundam Metaverse. A literal £100m+ waste of space that nobody asked for. They went buzzword chasing, built a platform with terrible tech that leaked user data and unreleased model kits immediately, and achieved nothing.
The "Owned" IP Crisis:
If you strip away the licensed stuff, what does Bandai actually have that’s currently active?
- Gundam: Their biggest owned IP hasn't had a profitable hit game in years. The hero shooter Gundam Evolution died in a year. Gundam Breaker 4 was budget shovelware.
- Tales of: Currently stuck in a remaster cycle. Tales of Arise was their biggest seller, yet it sold LESS than Code Vein 1. And what did they do? They butchered Code Vein 2 and the next mainline Tales is nowhere to be seen.
- Tekken: Tekken 8 is profitable, sure. But the launch year couldn't even cover the Blue Protocol losses. Now Harada, the face of Tekken and the only senior ‘gamer guy’ in Bandai has left, and they are facing massive backlash for adding predatory microtransactions post-launch. The brand trust is evaporating.
- Ace Combat: Ace Combat 7 hit 7 million sales last month, which sounds good until you realise it took seven years and deep discounts constantly to reach.
The Financial House built on Sand:
Here is the real structural rot. Bandai Namco made £790m from Gundam in FY2025, but their true nuclear reactor is licensed IP.
Dragon Ball: £980m revenue. That is more than Capcom’s entire record-breaking year with Monster Hunter Wilds.
One Piece: £715m.
Now look at the drop-off. The revenue difference between Dragon Ball and One Piece alone is roughly £265m. That "gap" is effectively the entire total revenue of their 4th and 5th biggest IPs, Kamen Rider and Naruto/Boruto, combined. That is terrifying. Their entire empire rests on three pillars, and over 70% of their profits come from IPs they do not own.
The Shueisha Threat:
Their empire is built on Dragon Ball and One Piece. Mobile gacha games like Dokkan Battle have been printing infinite money for a decade, but here is the unfathomable stupidity: Bandai does not own the developers of these games either.
What happens when Shueisha, who owns the manga rights, decides they don't want Bandai taking a massive cut anymore? Shueisha has already started their own gaming division and is building infrastructure. When the publishing contract needs renewal, Shueisha could easily just cut out the middleman and hire the devs directly. Bandai has set themselves up to be the most replaceable part of their own empire. It is likely why they announced Dragon Ball Project: Age 1000 so early. They are trying to squat on the IP rights before Shueisha realises they don't need them.
Manufacturing Line Mentality:
Instead of investing in their own talent to fix this, Bandai acts like a factory. When Blue Protocol failed and their Western trend-chasing projects imploded, did they learn from it? No. They used "expulsion rooms" to force experienced staff to quit.
They are firing their institutional memory because they view game development as a manufacturing line, not art or engineering. They are even selling their Singapore support team to Nintendo. That team actually helped make Mario Kart. They are gutting their ability to make good games just to balance the books for a quarter.
The Plastic Toy Strategy is Doomed:
Bandai seems to think their future is safe because of toys, specifically Gundam models. They recently saw record high profits from the Gundam SEED Freedom movie, but that is a trap. That boom was a nostalgia bomb for fans in their 30s-40s who grew up watching the show and have £200+ to burn on high-end kits.
They are completely failing to capture the younger generation. Kids today do not buy physical merchandise for IPs they don't care about. They buy what they see in the games they play. If it isn't in Fortnite, Roblox or a game where they can hangout with their friends, it doesn't exist to them. You cannot sell a plastic robot to a kid who has never watched the anime, and Bandai has failed to produce a single hit Gundam game or show to hook them. The hilarity here is that Armored Core 6 made mecha cool again to the West… who made it? Fromsoft!
The Western push is failing because the media connecting the toys to the kids is trash. On top of that, they are betting their future on shipping physical waste. Upcoming EU laws on plastic packaging, digital product passport and a host of other material related regulations are going to make their business model a nightmare. While other companies are printing money with digital skins that cost nothing to replicate, Bandai is rushing to sell boxes of plastic and air before international regulations make their primary business model financially toxic.
✅ The Verdict
Bandai Namco is effectively a corporate dinosaur that has convinced itself the meteor isn't coming. They view video game development as a "burden" they must tolerate to sell toys, which is dangerously backward thinking in a digital economy. They are treating the one sector that offers infinite scalability as a secondary commercial for a product that has hard physical limits.
Even if you ignore the looming environmental laws, you cannot defeat the logistics of reality. Plastic requires oil, shipping requires fuel, and most importantly, even the biggest whales eventually run out of shelf space in their houses. You simply cannot sell infinite physical statues to the same people forever. While the rest of the industry is printing virtually 100% profit margins on digital skins and downloadable content, Bandai is suffocating itself with warehouse logistics and material costs.
Then there is the Shueisha inevitability. Shueisha is a business that loves money above all else. There is absolutely no scenario where they let Bandai keep publishing Dragon Ball and One Piece games indefinitely. The moment their internal infrastructure is ready, they will cut out the middleman to keep that publisher revenue for themselves. It is not a matter of if, but when. Bandai Namco has spent the last decade building an empire on rented land, and the landlord is about to evict them. They had every opportunity to build their own digital fortress with Code Vein or Blue Protocol, but instead of learning from mistakes and improve, they chose to be a plastic toy factory instead.
It is a suicide pact with obsolescence: they have chained their entire financial future to a material that governments are trying to ban, while voluntarily handing the keys to the infinite-money glitch of digital gaming back to a landlord who no longer needs them.