Konami sheds shares of Takara in Japan

TOKYO--Japanese toymaker Takara will have to continue its beleaguered operations without the backing of Konami.

Takara is expected to post a 15 billion yen ($141.2 million) loss for the 2004 calendar year, the company said today. News of this loss prompted Konami to sell off the entirety of its 22.2 percent stake in the company.

While Konami didn't say who bought the shares, the Nikkei Journal reports that Index, a Japanese mobile phone content provider (and recent buyer of US-based Mobliss), now owns them. The sell-off is actually a windfall for the game publisher, because that stake, worth 11 billion yen ($104.1 million), is 6.1 billion yen ($57.7 million) more than the company paid for it in 2000.

Takara's losses in 2004 are attributed to poor performance in overseas markets and a failure to broaden its expansion into various markets within Japan, according to analysts. Takara's loss is expected to pull down Konami's profit by 3.3 billion yen ($31.1 million) in its own fiscal year.

"The business environment for both parties has changed drastically over the last 4 years and 9 months," read a statement issued by Konami, "prompting Konami to review its capital relationship with Takara, which led to its decision to sell its holdings of Takara's shares."

If Index is the buyer, the move will likely give the company access to Takara's intellectual property and toy brands. Acquiring a stake in Takara also means that Index will gain a strong connection to Takara's group companies, which include game publisher Atlus and anime producer Broccoli.

Index and Takara have done business in the past: The two companies codeveloped a dog-translation utility called "Bowlingual" in 2002. That toy's audio analysis system was developed by Index, and the final product was marketed and distributed by Takara.

Takara shares closed 4.85 percent (24 yen) higher at 519 yen ($4.90) today. Konami's shares also rose by 0.45 percent (10 yen), closing at 2,240 yen ($21.17).