FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of November 2004

Commission File Number: 1-31452

KONAMI CORPORATION

(Translation of registrant’s name into English)

Marunouchi Building

4-1, Marunouchi 2-chome

Chiyoda-ku, Tokyo 100-6330

Japan

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  x        Form 40-F  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ¨        No  x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-             

Information furnished in this form:

1. Consolidated financial results for the six months ended September 30, 2004 which were filed with the Tokyo Stock Exchange on November 9, 2004

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	KONAMI CORPORATION
Date: November 9, 2004	By:	/s/ NORIAKI YAMAGUCHI
	Name:	Noriaki Yamaguchi
	Title:	Executive Vice President and CFO

Consolidated Financial Results

for the Six Months Ended September 30, 2004

(Prepared in Accordance with U.S. GAAP)

November 9, 2004

KONAMI CORPORATION

Address:	4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
Stock code number:	9766
URL:	http://www.konami.com
Shares listed:	Tokyo Stock Exchange, New York Stock Exchange, London Stock Exchange and Singapore Exchange
Representative:	Kagemasa Kozuki, Chairman of the Board and Chief Executive Officer
Contact:	Noriaki Yamaguchi, Executive Vice President and Chief Financial Officer (Phone: +81-3-5220-0163)
Date of Board Meeting to approve the financial results:	November 9, 2004
Adoption of U.S. GAAP:	Yes

Note: Financial information presented herein was not audited by independent public accountants.

1. Consolidated Financial Results for the Six Months Ended September 30, 2004

(Amounts are rounded to the nearest million)

(1) Consolidated Results of Operations

		(Millions of Yen, except per share data)
		Net revenues		Change		Operating income		Change		Income before income taxes		Change
Six months ended September 30, 2004		¥	114,009	(12.3	)%	¥	11,851	(45.4	)%	¥	11,586	(48.3	)%
Six months ended September 30, 2003			129,976	14.8			21,698	113.5			22,408	120.8
Year ended March 31, 2004			273,412				40,713				40,107
		Net income		Change		Net income per share (Yen)				Diluted net income per share (Yen)
Six months ended September 30, 2004		¥	1,626	(85.0	)%	¥	13.51			¥	13.51
Six months ended September 30, 2003			10,859	148.6			90.13				90.13
Year ended March 31, 2003			20,104				166.86				166.86
Notes:
1.	Equity in net income (loss) of affiliated companies
	Six months ended September 30, 2004:						¥(2,551) million
	Six months ended September 30, 2003:						230 million
	Year ended March 31, 2004:						252 million
2.	Weighted-average common shares outstanding
	Six months ended September 30, 2004:						120,388,556 shares
	Six months ended September 30, 2003:						120,484,155 shares
	Year ended March 31, 2004:						120,483,869 shares
3.	Change in accounting policies: None
4.	Change (%) of net revenues, operating income, income before income taxes and net income represents the increase or decrease relative to the same period of the previous year.

1

(2) Consolidated Financial Position

	(Millions of Yen, except per share amounts)
	Total assets		Total stockholders’ equity		Equity-assets ratio		Total stockholders’ equity per share (Yen)
September 30, 2004	¥	294,274	¥	99,847	33.9	%	¥	833.28
September 30, 2003		290,642		96,626	33.2	%		801.99
March 31, 2004		294,497		102,129	34.7	%		847.66

Note:

Number of shares outstanding
September 30, 2004:	119,823,294 shares
September 30, 2003:	120,483,851 shares
March 31, 2004:	120,483,252 shares

(3) Consolidated Cash Flows

	(Millions of Yen)
	Net cash provided by (used in)								Cash and cash equivalents at end of period
	Operating activities		Investing activities			Financing activities
Six months ended September 30, 2004	¥	6,547	¥	(7,891	)	¥	(6,814	)	¥	79,779
Six months ended September 30, 2003		16,079		(1,254	)		(6,654	)		82,282
Year ended March 31, 2004		34,326		(7,001	)		(14,141	)		86,885

(4) Number of Consolidated Subsidiaries and Companies Accounted for by the Equity Method

Number of consolidated subsidiaries:	28
Number of affiliated companies accounted for by the equity method:	3

(5) Changes in Reporting Entities

Number of consolidated subsidiaries added:	0
Number of consolidated subsidiaries removed:	0
Number of affiliated companies accounted for by the equity method added:	0
Number of affiliated companies accounted for by the equity method removed:	0

2. Consolidated Financial Forecast for the Year Ending March 31, 2005

	(Millions of Yen)
	Net revenues		Operating income		Income before income taxes		Net income
Year ending March 31, 2005	¥	275,000	¥	28,000	¥	27,000	¥	11,000

(Reference)

Expected net income per share for the year ending March 31, 2005 is ¥91.80.

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Cautionary Statement with Respect to Forward-Looking Statements:

Statements made in this document with respect to our current plans, estimates, strategies and beliefs, including the above forecasts, are forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of information currently available to it and, therefore, you should not place undue reliance on them. A number of important factors could cause actual results to be materially different from and worse than those discussed in forward-looking statements. Such factors include, but are not limited to: (i) changes in economic conditions affecting our operations; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar and the Euro; (iii) our ability to continue to win acceptance of our products, which are offered in highly competitive markets characterized by the continuous introduction of new products, rapid developments in technology and subjective and changing consumer preferences; (iv) our ability to successfully expand internationally with a focus on our video game software business, card game business and gaming machine business; (v) our ability to successfully expand the scope of our business and broaden our customer base through our exercise entertainment business; (vi) regulatory developments and changes and our ability to respond and adapt to those changes; (vii) our expectations with regard to further acquisitions and the integration of any companies we may acquire; and (viii) the outcome of contingencies.

Please refer to page 13 of the attached material for information regarding the assumptions and other related items used in the preparation of these forecasts.

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1. Organizational Structure of the Konami Group

The Konami Group is a conglomerate engaged in the amusement and health industry providing customers with “High Quality Life” and is comprised of KONAMI CORPORATION (the “Company”), its 28 consolidated subsidiaries and 3 equity method affiliates. Each of the Company, its subsidiaries and affiliated companies is categorized into business segments based on its operations as stated below. Business segment categorization is based on the same criteria explained below under “5. Segment Information (Unaudited).”

Business Segments	Major Companies
Computer & Video Games	Domestic	The Company
		Konami Marketing Japan, Inc.
		Konami Computer Entertainment Studios, Inc.
		Konami Computer Entertainment Tokyo, Inc.
		Konami Computer Entertainment Japan, Inc.
		Konami Online, Inc., TAKARA CO., LTD. (*2)
		HUDSON SOFT CO., LTD. (*2), Genki Co., Ltd. (*2)
	Overseas	Konami Digital Entertainment, Inc.
		Konami of Europe GmbH
		Konami Marketing (Asia) Ltd.
		Konami Software Shanghai, Inc., One other company
Toy & Hobby	Domestic	The Company
		Konami Marketing Japan, Inc.
		Konami Media Entertainment, Inc.
		Konami Traumer, Inc., Konami Online, Inc.
	Overseas	Konami Marketing, Inc.
		Konami Corporation of Europe B.V.
		Konami Marketing (Asia) Ltd.
Amusement	Domestic	The Company
		Konami Marketing Japan, Inc.
		KPE, Inc., Konami Online, Inc., One other company
	Overseas	Konami Marketing, Inc.
		Konami Corporation of Europe B.V.
		Konami Marketing (Asia) Ltd.
Gaming	Domestic	The Company
	Overseas	Konami Gaming, Inc.
		Konami Australia Pty Ltd, One other company
Health & Fitness	Domestic	Konami Sports Corporation
		Konami Sports Life Corporation
		Konami Online, Inc., One other company
Other	Domestic	Konami Marketing Japan, Inc., Konami School, Inc.
		Konami Computer Entertainment School, Inc.
		Konami Real Estate, Inc., One other company
	Overseas	Konami Corporation of America
		Konami Corporation of Europe B.V., One other company

Notes:

*1. Companies that have operations categorized in more than one segment are included in each segment in which they operate.

*2. These are equity method affiliates.

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Business Organization

5

2. Management Policy

1. Management Policy

Our management policy places priority on our shareholders, sound relationships with all stakeholders, including shareholders, and a wide range of social contributions as a good corporate citizen. We aim to make optimum use of our group’s management resources, taking into account the three keywords of our management policy: “Adaptation to Global Standards”, “Maintaining Fair Competition” and “Pursuit of High Profits”.

In order to maximize our shareholders’ values, we strive to continuously increase and improve our market capitalization and provide stable dividends as a means to return profits to shareholders. Retained earnings will be used for investment focused on business fields with good future prospects and profitability to increase our corporate value and source for dividends.

We are working on maintaining sound relationships with our stakeholders, including investors, end-users, suppliers, employees and the community in general, as well as contributing to the society by supporting a wide range of activities that promote education, sports and culture. In January 2004, we entered into an agreement of Japanese Olympic Committee “JOC” official partnership with JOC. As the Olympic Games were held this year, we supported athletes by offering our Konami Sports Club facilities to athletes nominated by JOC and the Japanese national team for the Athens Olympics.

Pursuant to this basic management policy, we aim to create “High Quality Life” full of “dream” “surprise” and “fascination” in everyday life of people all over the world by offering entertainment and health products and services with universal appeal.

2. Profit Appropriation Policy

We consider stable cash dividends and an increase in corporate value as important means for returning our profits to shareholders. Retained earnings will be used for investment focused on business fields with good future prospects and profitability to strengthen our growth potential and competitiveness.

3. Medium to Long-term Strategies and Objectives

    Establishment of Strong Business Portfolio

We believe that competition among entertainment companies will be intensified, thus an innovative and diversified corporate strategy and further reinforcement of the corporate structure supporting such strategy are inevitable for the continuous growth of an entertainment company. Starting from the Amusement business, we have been expanding our businesses to include such “hit-businesses” as Computer & Video Games business, Toy & Hobby business and Gaming business in entertainment industries for many years. In recent years, we have been making an effort to enhance the Health & Fitness business as a new business. Since the Health & Fitness business is getting on the track, we are establishing a solid business portfolio with good profit balance by adding a “stable profit business” to traditional “hit businesses”.

With a view to broadening profit, we will put strong emphasis on the online business which is expanding on a global basis.

Strengthening Our Corporate Structure by Enhancing Our Brand Value, Production, Marketing and Financial Resources

To enhance our brand value, from April 2003 we have developed a new logo as the symbol for our new branding initiative that we are promoting under the tagline from “Time Consumption” to “Valuable Time Creation”. Our goal is to promote high quality life full of surprise and fascination for our stakeholders.

Strengthening our corporate structure is essential in setting the groundwork for our future growth. We continue to strengthen our corporate structure in a variety of ways, such as enhancing our production, marketing and financial resources, building a stronger group management system and establishing a fair and timely disclosure system.

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4. Corporate Governance Development

It is necessary for us to develop a strong corporate governance in order to maintain and develop our basic management policy of placing priority on our shareholders, sound relationship with all stakeholders including shareholders, and a wide range of social contributions as a good corporate citizen.

The first and most important agenda in our corporate governance development program is the reform of the board of directors. We employed an outside corporate officer in May 1992 and introduced an executive officer system in June 1999. In June 2001, we reduced the size of our board of directors to nine directors, four of which were from outside. We now have eight directors, three of which are from outside. We endeavored to accelerate the managerial decision-making process, separate oversight and executive functions, strengthen the managerial monitoring system, revitalize the board of directors, and pursue management transparency. The directors from outside are independent from us.

We are working to implement and activate committees in response to the changing environment in which we operate. We established Risk Management Committee in April 2000 in order to enhance our ability to prevent and respond quickly to internal and external risks. We established Compliance Committee in September 2001 to reinforce our entire system for monitoring and encouraging compliance with applicable laws, rules and regulations. We established Disclosure Committee in April 2003 in the wake of listing our stock on the New York Stock Exchange. The Disclosure Committee is working on the establishment of inner management system and development of group company reporting procedures that facilitates timely and accurate disclosure.

We also established Konami Group Code of Business Conduct and Ethics and Konami Group Officers and Employees Conduct Guideline in order to integrate direction and improve its standard at all group levels.

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3. Business Performance and Cash Flows

1. Business Performance

Overview

In this interim consolidated accounting period, Japanese economy has been in recovery trend resulting from the recovery of corporate performance with strong export, the growth of capital investment and the gradual increase in individual consumption. Also the world economy has been in restoration as the U.S. economy and Chinese economy continue to grow.

In the entertainment industry in which we operated, sales of software continued steadily in the global home video game market. Both Nintendo and SONY will introduce a new mobile style game machine in the second half of this year and are expected to vitalize the market.

In the health industry, with the arrival of graying society, there was a health conscious trend and especially the middle-aged and senior groups seemed to have increased concern about exercise. We can develop the market in the future as the proportion of people participating in sports clubs is still low in Japan compared with the U.S and Europe.

In these circumstances, in the Computer & Video Games segments, sales of WORLD SOCCER WINNING ELEVEN 8 for PlayStation2, a popular soccer game, achieved one million copies at the same time of its release in August 2004 and the WINNING ELEVEN series thereby recorded a million-sales for the recent three consecutive years. At TOKYO GAME SHOW 2004 held in September 2004, our products such as METAL GEAR SOLID 3 SNAKE EATER, the latest title of the METAL GEAR series, attracted enormous attention from many guests.

The Toy & Hobby segment maintained its solid sales of the Yu-Gi-Oh! trading card game in the U.S. and Europe. We held Yu-Gi-Oh! World Championship Tournament in Los Angeles in the U.S. in July 2004 and the finalists who won the preliminary hard matches among 10 million people played exciting game match aiming at the position as the world number one.

In the Amusement segment, e-AMUSEMENT products such as BATTLE CLIMAXX!, the first online professional wrestling battle video game machine in the industry and MAH-JONG FIGHT CLUB3, generated solid achievement.

In the Gaming segment, the business started to grow rapidly in North America by acquisition of gaming license and diversifying its product line-up. In Australia, we exhibited many of our latest products at Australasian Gaming Expo 2004 which is the biggest gaming show in Australia.

In the Health & Fitness segment, we installed AED, Automated External Defibrillator, in all Konami Sports Clubs for safety improvement for our customers offering high quality services continuously. We also released Refreshmentbike, a home use fitness machine, and FLAVANGENOL UP50, our original supplement, and made a proposal to sustain healthy condition at various life scenes.

As a result, consolidated net revenues for the six months ended September 30, 2004, amounted to ¥ 114,009 million, and consolidated operating income, consolidated net income before income taxes and consolidated net income were ¥ 11,851 million, ¥ 11,586 million and ¥ 1,626 million, respectively.

The interim dividend payout is ¥ 27 per share.

8

Performance by business segment

Summary of net revenues by business segment:

	(Millions of Yen)
	Six months ended September 30, 2003			Six months ended September 30, 2004
Computer & Video Games	¥	38,545		¥	32,665
Toy & Hobby		31,455			17,997
Amusement		15,959			18,992
Gaming		5,165			5,898
Health & Fitness		39,679			39,778
Other, Corporate and Eliminations		(827	)		(1,321	)
Consolidated net revenues	¥	129,976		¥	114,009

Note: The Exercise Entertainment segment changed its name to the Health & Fitness segment on March 29, 2004.

In the Computer & Video Games segment, sales of WORLD SOCCER WINNING ELEVEN 8 for PlayStation2 achieved one million copies at the same time of its release in August 2004 and the WINNING ELEVEN series thereby made a million-seller for the recent three consecutive years. In addition we provided powerful titles such as JIKKYOU PAWAFULPUROYAKYU 11 and Suikoden IV and both generated favorable sales.

In overseas market, popular titles received high review. In Europe, SILENT HILL 4 -The Room- for PlayStation 2 and Xbox recorded favorable sales. In North America and Europe, Yu-Gi-Oh! Reshef of Destruction, one of the Yu-Gi-Oh! series, maintained its strong sales and in North America DDR EXTREME, the Dance Dance Revolution series also marked good sales.

As a result, the consolidated net revenue of the Computer & Video Games segment was ¥32,665 million for the six months ended September 30, 2004 (84.7 % of the six months ended September 30, 2003).

In the Toy & Hobby segment, we have been developing our business presence mainly in boy’s toy field since last year. We paid our attention to the continuously growing animation market further to explore the boy’s toy field, and we fully participated in a planning and development of the Get Ride! AMDRIVER, a TV originated animation, which has been broadcasted on Japanese TV since April 2004, with which we have started a big media-mix project by tying up with the multimedia. We also introduced a new product of the GRANSAZERS series which we have been facilitating the commercialization in line with a TV program broadcasted since October 2003 and we increased sales as a result of this. In other categories, although sales of the Yu-Gi-Oh! card game has decreased compared to the same period in the previous year in Japan, the U.S and Europe, their sales continued steadily relative to the card games market as a whole.

As a result, consolidated net revenue of the Toy & Hobby segment for the six months ended was ¥17,997 million (57.2 % of consolidated revenues for the six months ended September 30, 2003).

In the Amusement segment, in the video game, e-AMUSEMENT products for amusement arcades, such as BATTLE CLIMAXX!, a professional wrestling trading card game, and the MAH-JONG FIGHT CLUB series, which allow online match-up among remote players nation-wide, received favorable reviews. Music simulation game series, such as drummania and GUITARFREAKS, remained strong. In the token-operated products, WingFantasia, which allows players to enjoy atmosphere of last-minute game with throwing dice and offers them unique experience which they have never had, GI-TURFWILD 2, a large scale token operated horse racing game, which makes players feel as though they are in the race track and has more advanced features than GI-WINNING SIRE, and GIGADRAKE, a new style battle game with a combination of card game and slot contributed to favorable performance.

As a result, consolidated net revenue of the Amusement segment for the six months ended September 30, 2004 was ¥ 18,992 million (119.0 % of consolidated revenues for the six months ended September 30, 2003).

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As for the Gaming segment, we expanded our business mainly in North America and Australia. In North America, our main video slot machines continued to mark solid sales, especially in Nevada, California and Michigan. We introduced ADVANTAGE SERIES, a Mechanical Slot Machines product in December 2003 which increased our sales.

Although Australian market leveled off, we secured our sales with export of video slot machines. As to the status of the acquisition of gaming licenses, we have obtained licenses in the total of 25 states, of which 20 states in the United States, four states in Canada and one dominion of the United States after we acquire licenses in New Jersey and Connecticut in the U.S. in August 2004. We own gaming licenses in every state in Australia.

As a results, consolidated net revenue of the Gaming segment for the six months ended September 30, 2004 was ¥5,898 million (114.2 % of consolidated revenue for the six months ended September 30, 2003).

With regard to the Health & Fitness segment, in the business to operate sports club facilities, we opened the Fukuokatenjin branch in Fukuoka in April 2004 and the Oitaakino branch in Oita in May 2004 to expand the Konami Sports Club’s facility networks. As to new products and services, we introduced “Undo-Jyuku”, to foster young gymnasts in Gymnastic club, gymnastic school to contribute to the development of the firmament of Japanese sports. We also installed AED, Automated External Defibrillator, in all Konami Sports Clubs nationwide to offer safe facilities and high quality services.

As to the fitness products business, for commercial use, we utilize our knowledge in entertainment business and our network technologies to promote expansion of our fitness machine products line-up such as the EZ series and introduced them into our sports club facilities and received highly favorable reviews from our members. As for home use, we entered into the market of home use fitness products and released Refreshmentbike, a home use fitness machine which features a function to generate the highly concentrated oxygen and negative ions, and Kenshin-Keikaku, a PC software to display and manage exercise data stored in e-walkeylife, a pedometer with multi-functions. And also we introduced FLAVANGENOL UP50, our original supplement, Diet Channel for PlayStation 2, a game software which emulates contents concerning diet, and we also made efforts to increase sales of the existing products such as MARTIALBEAT2.

As a result, the consolidated net revenue of the Health & Fitness segment for the six months ended September 30, 2004 was ¥ 39,778 million (100.2 % of consolidated revenues for the six months ended September 30, 2003).

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2. Cash Flows

Cash flow summary for the six months ended September 30, 2004:

	Millions of Yen
	Six months ended September 30, 2003			Six months ended September 30, 2004			Change
Net cash provided by operating activities	¥	16,079		¥	6,547		¥	(9,532	)
Net cash used in investing activities		(1,254	)		(7,891	)		(6,637	)
Net cash used in financing activities		(6,654	)		(6,814	)		(160	)
Effect of exchange rate changes on cash and cash equivalents		(569	)		1,052			1,621
Net increase (decrease) in cash and cash equivalents		7,602			(7,106	)		(14,708	)
Cash and cash equivalents, end of the period		82,282			79,779			(2,503	)

Cash flows from operating activities:

Net cash provided by operating activities amounted to ¥ 6,547 million for the six months ended September 30, 2004, compared to ¥ 16,079 million for the six months ended September 30, 2003. This resulted primarily from operating income of ¥ 11,851 million, offset by an increase in inventories of ¥ 5,246 million.

Cash flows from investing activities:

Net cash used in investing activities amounted to ¥ 7,891 million for the six months ended September 30, 2004, compared to ¥ 1,254 million for the six months ended September 30, 2003. This resulted primarily from capital expenditure of ¥ 7,764 million.

Cash flows from financing activities:

Net cash used in financing activities amounted to ¥ 6,814 million for the six months ended September 30, 2004, compared to ¥ 6,654 million for the six months ended September 30, 2003. This was primarily due to an increase in short-term borrowings of ¥ 4,485 million while payments of dividends of ¥ 4,217 million and purchases of treasury stock by a parent company and subsidiaries of ¥ 5,279 million.

The following table represents certain cash flow indexes for the six months ended September 30, 2004:

	Six months ended September 30, 2003	Six months ended September 30, 2004	Year ended March 31, 2004
Equity-assets ratio (%)	33.2	33.9	34.7
Equity-assets ratio at fair value (%)	148.0	99.4	124.4
Years of debt redemption (years)	4.7	11.8	2.1
Interest coverage ratio (times)	37.8	13.8	39.7

Equity-assets ratio = Stockholders’ equity / Total assets

Equity-assets ratio at fair value = Market capitalization / Total assets

Years of debt redemption = Interest-bearing debts / Cash flows from operating activities

Interest coverage ratio = Cash flows from operating activities / Interest expense

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Notes:

1. Each index is calculated from figures prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

2. Cash flows from operating activities are from the consolidated statements of cash flow.

3. Interest-bearing debt covers all liabilities with interest in the consolidated balance sheets.

3. Activities for the Future

In the Computer & Video Games segment, Metal Gear Solid 3: The Snake Eater, a new title of the Metal Gear series, will be rolled out globally. Furthermore we will release powerful titles such as ENTHUSIA PROFESSIONAL RACING, a racing game, and Rumble Roses, a women professional wrestling game, and reinforce our original products lineup. As for popular sports series, we will provide the soccer game titles such as EUROPEAN CLUB SOCCER Winning Eleven Tactics, and J.LEAGUE Winning Eleven 8 Asia Championship for domestic market, and Pro Evolution Soccer 4 for European market. In addition we will enhance popular titles such as JIKKYOU PAWAFULPUROYAKYU 11 CHO-KETTEIBAN. We will continuously provide the new title of the Yu-Gi-Oh! series which receives persistent popularity.

The Toy & Hobby segment will continue to expand products line-up mainly for toys for boys. We started sales of THE JUSTIRISERS in September 2004 as the second series of GRANSAZERS, and will introduce them gradually along with TV program broadcasted on Japanese TV from October 2004. We will also introduce the PLAY-POEMS series, a new style of virtual game with POEMS, a high-performance semiconductor chip, in November 2004 and develop the new market. Furthermore in Japan, Europe and the U.S. we will provide the new title of the Yu-Gi-Oh! card game which is well known globally.

In the Amusement segment, as for video games, we will provide new titles such as LETHAL ENFORCERS 3, the latest product of the POLICE 911 series, and THRILLDRIVE3, the latest product of the THRILLDRIVE series which received high evaluation from many users. As for token operated games, we will also provide FantasicFever2, the successor of FantasicFever, a new style of “penny-falls” game machine, which decorates amusement facilities by medals flowing in the air and electric spectaculars like a parade.

As for the Gaming segment, we introduced Forcise, our first casino control system, at Global Gaming Expo held in Las Vegas in the U.S. in October 2004 and received favorable review. We will expand the business range with slot machines and casino control system.

With regard to the Health & Fitness segment, in the sports club business, we aim to promote the expansion of high quality facilities, and to satisfy customers’ various needs by offering safe, clean and comfortable facilities and personal services, as well as by improving contents and qualities of services.

In the health & fitness products business, under the concept of “offering enjoyable exercises and relaxation” we will create new services for health by introducing next generation fitness machines such as EZ series into Konami Sports Clubs actively and by expanding the range of home health related products.

We did not revise consolidated net revenue, consolidated operating income, consolidated net income before income taxes in our earnings forecast for the year ending March 31, 2005, as announced on May 12, 2004. We revised consolidated net income in our earnings forecast for the year ending March 31, 2005 from ¥ 15,000 million to ¥ 11,000 million.

Year-end dividend payout for the consolidated fiscal year ending March 31, 2005 is expected to be ¥ 27 per share. (Dividend for the year: ¥ 54 per share including an interim dividend of ¥ 27 per share).

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Cautionary Statements with Respect to Outlook

Statements made in this document with respect to our current plans, estimates, strategies and beliefs, including the above forecasts, are forward-looking statements about our future performance. These statements are based on management’s assumptions and beliefs in light of information currently available to it and, therefore, you should not place undue reliance on them. A number of important factors could cause actual results to be materially different from and worse than those discussed in forward-looking statements. Such factors include, but are not limited to: (i) changes in economic conditions affecting our operations; (ii) fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar and the Euro; (iii) our ability to continue to win acceptance of our products, which are offered in highly competitive markets characterized by the continuous introduction of new products, rapid developments in technology and subjective and changing consumer preferences; (iv) our ability to successfully expand internationally with a focus on our video game software business, card game business and gaming machine business; (v) our ability to successfully expand the scope of our business and broaden our customer base through our exercise entertainment business; (vi) regulatory developments and changes and our ability to respond and adapt to those changes; (vii) our expectations with regard to further acquisitions and the integration of any companies we may acquire; and (viii) the outcome of contingencies.

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4. Consolidated Financial Statements

(1) Consolidated Balance Sheets (Unaudited)

	Millions of Yen									Thousands of U.S. Dollars
	September 30, 2003			September 30, 2004			March 31, 2004			September 30, 2004
			%			%			%
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	¥	82,282		¥	79,779		¥	86,885		$	718,406
Trade notes and accounts receivable, net of allowance for doubtful accounts of ¥659 million, ¥754 million ($6,790 thousand) and ¥709 million at September 30, 2003, September 30, 2004 and March 31, 2004, respectively		23,722			25,017			25,438			225,277
Inventories		20,291			23,826			17,821			214,552
Deferred income taxes, net		12,193			13,798			13,895			124,250
Prepaid expenses and other current assets		10,173			8,045			8,727			72,445
Total current assets		148,661	51.1		150,465	51.1		152,766	51.9		1,354,930
PROPERTY AND EQUIPMENT, net		47,338	16.3		47,394	16.1		46,700	15.8		426,780
INVESTMENTS AND OTHER ASSETS:
Investments in marketable securities		113			130			124			1,171
Investments in affiliates		12,472			9,419			12,514			84,818
Identifiable intangible assets		46,168			46,389			45,984			417,731
Goodwill		463			463			463			4,169
Lease deposits		24,217			23,684			23,967			213,273
Other assets		11,210			16,330			11,979			147,051
Total investments and other assets		94,643	32.6		96,415	32.8		95,031	32.3		868,213
TOTAL ASSETS	¥	290,642	100.0	¥	294,274	100.0	¥	294,497	100.0	$	2,649,923

See accompanying notes to consolidated financial statements

14

	Millions of Yen															Thousands of U.S. Dollars
	September 30, 2003					September 30, 2004					March 31, 2004					September 30, 2004
				%					%					%
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term borrowings	¥	3,108				¥	7,073				¥	2,585				$	63,692
Current portion of long-term debt and capital lease obligations		2,977					17,591					2,900					158,406
Trade notes and accounts payable		18,231					16,477					15,998					148,375
Accrued income taxes		17,926					21,960					23,318					197,749
Accrued expenses		18,089					18,173					18,651					163,647
Deferred revenue		6,739					6,088					6,036					54,822
Other current liabilities		4,500					4,139					3,311					37,271
Total current liabilities		71,570		24.6			91,501		31.1			72,799		24.7			823,962
LONG-TERM LIABILITIES:
Long-term debt and capital lease obligations, less current portion		69,026					52,572					68,195					473,408
Accrued pension and severance costs		2,508					2,357					2,350					21,225
Deferred income taxes, net		19,389					20,731					19,195					186,682
Other long-term liabilities		3,402					2,307					2,420					20,774
Total long-term liabilities		94,325		32.5			77,967		26.5			92,160		31.3			702,089
TOTAL LIABILITIES		165,895		57.1			169,468		57.6			164,959		56.0			1,526,051
MINORITY INTEREST IN CONSOLIDATED SUBSIDIARIES		28,121		9.7			24,959		8.5			27,409		9.3			224,755
COMMITMENTS AND CONTINGENCIES		—		—			—		—			—		—			—
STOCKHOLDERS’ EQUITY:
Common stock, no par value- Authorized 450,000,000 shares; issued 128,737,566 shares at September 30, 2003, September 30, 2004 and March 31, 2004; outstanding 120,483,851 shares at September 30, 2003, 119,823,294 shares at September 30, 2004 and 120,483,252 shares at March 31, 2004		47,399		16.3			47,399		16.1			47,399		16.1			426,826
Additional paid-in capital		46,736		16.1			46,736		15.9			46,736		15.9			420,855
Legal reserve		—		—			—		—			—		—			—
Retained earnings		27,787		9.6			32,152		10.9			33,779		11.4			289,527
Accumulated other comprehensive income (loss)		368		0.1			950		0.3			(119	)	(0.0	)		8,555
Total		122,290		42.1			127,237		43.2			127,795		43.4			1,145,763
Treasury stock, at cost- 8,253,715 shares, 8,914,272 shares and 8,254,314 shares at September 30, 2003, September 30, 2004 and March 31, 2004, respectively		(25,664	)	(8.9	)		(27,390	)	(9.3	)		(25,666	)	(8.7	)		(246,646	)
Total stockholders’ equity		96,626		33.2			99,847		33.9			102,129		34.7			899,117
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	¥	290,642		100.0		¥	294,274		100.0		¥	294,497		100.0		$	2,649,923

See accompanying notes to consolidated financial statements

15

(2) Consolidated Statements of Operations (Unaudited)

	Millions of Yen														Thousands of U.S. Dollars
	Six months ended September 30, 2003				Six months ended September 30, 2004					Year ended March 31, 2004					Six months ended September 30, 2004
				%				%					%
NET REVENUES:
Product sales revenue	¥	91,261			¥	74,933				¥	196,136				$	674,768
Service revenue		38,715				39,076					77,276					351,878
Total net revenues		129,976		100.0		114,009		100.0			273,412		100.0			1,026,646
COSTS AND EXPENSES:
Costs of products sold		50,618				45,409					115,229					408,906
Costs of services rendered		31,798				33,205					63,953					299,009
Selling, general and administrative		25,862				23,544					53,517					212,013
Total costs and expenses		108,278		83.3		102,158		89.6			232,699		85.1			919,928
Operating income		21,698		16.7		11,851		10.4			40,713		14.9			106,718
OTHER INCOME (EXPENSES):
Interest income		228				239					488					2,152
Interest expense		(425	)			(475	)				(865	)				(4,277	)
Other, net		907				(29	)				(229	)				(261	)
Other income (expenses), net		710		0.5		(265	)	(0.2	)		(606	)	(0.2	)		(2,386	)
INCOME BEFORE INCOME TAXES, MINORITY INTEREST AND EQUITY IN NET INCOME(LOSS) OF AFFILIATED COMPANIES		22,408		17.2		11,586		10.2			40,107		14.7			104,332
INCOME TAXES:		10,669		8.2		5,819		5.1			18,035		6.6			52,400
INCOME BEFORE MINORITY INTEREST AND EQUITY IN NET INCOME(LOSS) OF AFFILIATED COMPANIES		11,739		9.0		5,767		5.1			22,072		8.1			51,932
MINORITY INTEREST IN INCOME OF CONSOLIDATED SUBSIDIARIES		1,110		0.8		1,590		1.4			2,220		0.8			14,318
EQUITY IN NET INCOME(LOSS) OF AFFILIATED COMPANIES		230		0.2		(2,551	)	(2.3	)		252		0.1			(22,972	)
NET INCOME	¥	10,859		8.4	¥	1,626		1.4		¥	20,104		7.4		$	14,642

See accompanying notes to consolidated financial statements

16

	Yen						U.S. Dollars
	Six months ended September 30, 2003		Six months ended September 30, 2004		Year ended March 31, 2004		Six months ended September 30, 2004
PER SHARE DATA:
Basic and diluted net income per share	¥	90.13	¥	13.51	¥	166.86	$	0.12
Weighted-average common shares outstanding		120,484,155		120,388,556		120,483,869

See accompanying notes to consolidated financial statements

17

(3) Consolidated Statements of Stockholders’ Equity (Unaudited)

For the six months ended September 30, 2003

	Millions of Yen
	Common Stock		Additional Paid-in Capital		Legal Reserve			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock, at Cost			Total Stockholders’ Equity
Balance at March 31, 2003	¥	47,399	¥	46,736	¥	2,163		¥	18,981		¥	790		¥	(25,663	)	¥	90,406
Net income									10,859									10,859
Cash dividends, ¥35.0 per share									(4,216	)								(4,216	)
Foreign currency translation adjustments												(582	)					(582	)
Net unrealized gains on available-for-sale securities												160						160
Repurchase of treasury stock															(1	)		(1	)
Transfer from legal reserve						(2,163	)		2,163									—
Balance at September 30, 2003	¥	47,399	¥	46,736	¥	—		¥	27,787		¥	368		¥	(25,664	)	¥	96,626

For the six months ended September 30, 2004

	Millions of Yen
	Common Stock		Additional Paid-in Capital		Legal Reserve		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock, at Cost			Total Stockholders’ Equity
Balance at March 31, 2004	¥	47,399	¥	46,736	¥	—	¥	33,779		¥	(119	)	¥	(25,666	)	¥	102,129
Net income								1,626									1,626
Cash dividends, ¥27.0 per share								(3,253	)								(3,253	)
Foreign currency translation adjustments											1,322						1,322
Net unrealized losses on available-for-sale securities											(253	)					(253	)
Repurchase of treasury stock														(1,724	)		(1,724	)
Balance at September 30, 2004	¥	47,399	¥	46,736	¥	—	¥	32,152		¥	950		¥	(27,390	)	¥	99,847

See accompanying notes to consolidated financial statements

18

For the year ended March 31, 2004

	Millions of Yen
	Common Stock		Additional Paid-in Capital		Legal Reserve			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock, at Cost			Total Stockholders’ Equity
Balance at March 31, 2003	¥	47,399	¥	46,736	¥	2,163		¥	18,981		¥	790		¥	(25,663	)	¥	90,406
Net income									20,104									20,104
Cash dividends, ¥62.0 per share									(7,469	)								(7,469	)
Foreign currency translation adjustments												(1,108	)					(1,108	)
Net unrealized gains on available-for-sale securities												270						270
Adjustment for minimum pension liability												(71	)					(71	)
Repurchase of treasury stock															(3	)		(3	)
Transfer from legal reserve						(2,163	)		2,163									—
Balance at March 31, 2004	¥	47,399	¥	46,736	¥	—		¥	33,779		¥	(119	)	¥	(25,666	)	¥	102,129

For the six months ended September 30, 2004

	Thousands of U.S. Dollars
	Common Stock		Additional Paid-in Capital		Legal Reserve		Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Treasury Stock, at Cost			Total Stockholders’ Equity
Balance at March 31, 2004	$	426,826	$	420,855	$	—	$	304,178		$	(1,072	)	$	(231,121	)	$	919,666
Net income								14,642									14,642
Cash dividends, $0.24 per share								(29,293	)								(29,293	)
Foreign currency translation adjustments											11,905						11,905
Net unrealized losses on available-for-sale securities											(2,278	)					(2,278	)
Repurchase of treasury stock														(15,525	)		(15,525	)
Balance at September 30, 2004	$	426,826	$	420,855	$	—	$	289,527		$	8,555		$	(246,646	)	$	899,117

See accompanying notes to consolidated financial statements

19

(4) Consolidated Statements of Cash Flows (Unaudited)

	Millions of Yen									Thousands of U.S. Dollars
	Six months ended September 30, 2003			Six months ended September 30, 2004			Year ended March 31, 2004			Six months ended September 30, 2004
Cash flows from operating activities:
Net income	¥	10,859		¥	1,626		¥	20,104		$	14,642
Adjustments to reconcile net income to net cash provided by operating activities -
Depreciation and amortization		3,972			4,224			8,528			38,037
Reversal for doubtful receivables		(253	)		(455	)		(170	)		(4,097	)
Loss on sale or disposal of property and equipment, net		652			635			1,231			5,718
Loss (gain) on sale of marketable securities		(1,303	)		46			(1,303	)		414
Equity in net loss (income) of affiliated companies		(230	)		2,551			(252	)		22,972
Minority interest		1,110			1,590			2,220			14,318
Deferred income taxes		1,159			1,616			(651	)		14,552
Change in assets and liabilities, net of business acquired:
Decrease in trade notes and accounts receivable		5,136			955			3,033			8,600
Increase in inventories		(7,238	)		(5,246	)		(4,791	)		(47,240	)
Increase (decrease) in trade notes and accounts payable		439			(23	)		(1,724	)		(207	)
Increase (decrease) in accrued income taxes		4,083			(1,418	)		9,456			(12,769	)
Decrease in accrued expenses		(758	)		(718	)		(293	)		(6,466	)
Increase in deferred revenue		1,204			52			501			468
Other, net		(2,753	)		1,112			(1,563	)		10,013
Net cash provided by operating activities		16,079			6,547			34,326			58,955
Cash flows from investing activities:
Capital expenditures		(2,832	)		(7,764	)		(8,788	)		(69,914	)
Proceeds from sales of property and equipment		73			333			281			2,999
Proceeds from sales of investments in marketable securities		1,593			22			1,596			198
Acquisition of new subsidiaries, net of cash acquired		(206	)		—			(206	)		—
Decrease in time deposits, net		63			—			63			—
Decrease in lease deposits, net		272			165			121			1,486
Other, net		(217	)		(647	)		(68	)		(5,827	)
Net cash used in investing activities		(1,254	)		(7,891	)		(7,001	)		(71,058	)
Cash flows from financing activities:
Net increase (decrease) in short - term borrowings		(5,268	)		4,485			(5,789	)		40,387
Proceeds from long - term debt		6,400			—			6,400			—
Repayments of long - term debt		(315	)		(588	)		(896	)		(5,295	)
Principal payments under capital lease obligations		(1,177	)		(1,176	)		(2,355	)		(10,590	)
Dividends paid		(5,544	)		(4,217	)		(8,970	)		(37,974	)
Purchases of treasury stock by parent company		(1	)		(1,724	)		(3	)		(15,525	)
Purchases of treasury stock by subsidiaries		(633	)		(3,555	)		(2,456	)		(32,013	)
Other, net		(116	)		(39	)		(72	)		(350	)
Net cash used in financing activities		(6,654	)		(6,814	)		(14,141	)		(61,360	)
Effect of exchange rate changes on cash and cash equivalents		(569	)		1,052			(979	)		9,474
Net increase (decrease) in cash and cash equivalents		7,602			(7,106	)		12,205			(63,989	)
Cash and cash equivalents, beginning of the period		74,680			86,885			74,680			782,395
Cash and cash equivalents, end of the period	¥	82,282		¥	79,779		¥	86,885		$	718,406

See accompanying notes to consolidated financial statements

20

5. Segment Information (Unaudited)

(1) Operations in Different Industries

Six months ended September 30, 2003	Computer & Video Games		Toy & Hobby		Amusement		Gaming		Health & Fitness		Other, Corporate and Eliminations			Consolidated
	(Millions of Yen)
Net revenue:
Customers	¥	37,195	¥	31,420	¥	15,654	¥	5,165	¥	39,676	¥	866		¥	129,976
Intersegment		1,350		35		305		—		3		(1,693	)		—
Total		38,545		31,455		15,959		5,165		39,679		(827	)		129,976
Operating expenses		30,605		19,527		11,049		4,824		38,675		3,598			108,278
Operating income (loss)	¥	7,940	¥	11,928	¥	4,910	¥	341	¥	1,004	¥	(4,425	)	¥	21,698
Six months ended September 30, 2004	Computer & Video Games		Toy & Hobby		Amusement		Gaming		Health & Fitness		Other, Corporate and Eliminations			Consolidated
	(Millions of Yen)
Net revenue:
Customers	¥	31,927	¥	17,874	¥	18,494	¥	5,898	¥	39,718	¥	98		¥	114,009
Intersegment		738		123		498		—		60		(1,419	)		—
Total		32,665		17,997		18,992		5,898		39,778		(1,321	)		114,009
Operating expenses		28,504		14,397		13,694		5,141		38,039		2,383			102,158
Operating income (loss)	¥	4,161	¥	3,600	¥	5,298	¥	757	¥	1,739	¥	(3,704	)	¥	11,851
Year ended March 31, 2004	Computer & Video Games		Toy & Hobby		Amusement		Gaming		Health & Fitness		Other, Corporate and Eliminations			Consolidated
	(Millions of Yen)
Net revenue:
Customers	¥	90,105	¥	57,335	¥	34,547	¥	10,947	¥	78,875	¥	1,603		¥	273,412
Intersegment		2,415		133		880		—		24		(3,452	)		—
Total		92,520		57,468		35,427		10,947		78,899		(1,849	)		273,412
Operating expenses		76,436		37,889		23,630		10,255		76,127		8,362			232,699
Operating income (loss)	¥	16,084	¥	19,579	¥	11,797	¥	692	¥	2,772	¥	(10,211	)	¥	40,713
Six months ended September 30, 2004	Computer & Video Games		Toy & Hobby		Amusement		Gaming		Health & Fitness		Other, Corporate and Eliminations			Consolidated
	(Thousands of U.S. Dollars)
Net revenue:
Customers	$	287,501	$	160,955	$	166,538	$	53,111	$	357,659	$	882		$	1,026,646
Intersegment		6,646		1,108		4,484		—		540		(12,778	)		—
Total		294,147		162,063		171,022		53,111		358,199		(11,896	)		1,026,646
Operating expenses		256,677		129,644		123,314		46,295		342,539		21,459			919,928
Operating income (loss)	$	37,470	$	32,419	$	47,708	$	6,816	$	15,660	$	(33,355	)	$	106,718

Notes:	1.	Primary businesses of each segment are as follows:
		Computer & Video Games:	Production and sale of home-use video game software
		Toy & Hobby:	Production and sale of character related products
		Amusement:	Manufacture and sale of amusement arcade games and LCD units for pachinko machines
		Gaming:	Manufacture and sale of gaming machines for overseas market
		Health & Fitness:	Operation of health and fitness clubs, production and sale of health and fitness related goods.
	2.	“Other” consists of segments which do not meet the quantitative criteria for separate presentation under SFAS No. 131 “Disclosures about Segments of an Enterprise and Related Information.”
	3.	“Corporate” primarily consists of administrative expenses of the Company.
	4.	“Eliminations” primarily consist of eliminations of intercompany sales and of intercompany profits on inventories.
	5.	Intersegment revenues primarily consist of sub-licensing of intellectual property rights from Computer & Video Games and Toy & Hobby to Amusement and Gaming and sales of hardware and components from Amusement to Computer & Video Games and Health & Fitness.
	6.	Segment name of Exercise Entertainment was changed to Health & Fitness in the fourth quarter ended March 31, 2004.

21

(2) Operations in Geographic Areas

Six months ended September 30, 2003	Japan		Americas		Europe		Asia /Oceania		Total		Eliminations			Consolidated
	(Millions of Yen)
Net revenue:
Customers	¥	84,812	¥	27,026	¥	14,090	¥	4,048	¥	129,976		—		¥	129,976
Intersegment		37,666		154		88		179		38,087	¥	(38,087	)		—
Total		122,478		27,180		14,178		4,227		168,063		(38,087	)		129,976
Operating expenses		101,142		26,978		13,264		3,352		144,736		(36,458	)		108,278
Operating income	¥	21,336	¥	202	¥	914	¥	875	¥	23,327	¥	(1,629	)	¥	21,698
Six months ended September 30, 2004	Japan		Americas		Europe		Asia /Oceania		Total		Eliminations			Consolidated
	(Millions of Yen)
Net revenue:
Customers	¥	85,676	¥	14,422	¥	10,099	¥	3,812	¥	114,009		—		¥	114,009
Intersegment		21,709		852		51		43		22,655	¥	(22,655	)		—
Total		107,385		15,274		10,150		3,855		136,664		(22,655	)		114,009
Operating expenses		94,885		15,097		9,915		3,188		123,085		(20,927	)		102,158
Operating income	¥	12,500	¥	177	¥	235	¥	667	¥	13,579	¥	(1,728	)	¥	11,851
Year ended March 31, 2004	Japan		Americas		Europe		Asia /Oceania		Total		Eliminations			Consolidated
	(Millions of Yen)
Net revenue:
Customers	¥	176,401	¥	53,670	¥	35,551	¥	7,790	¥	273,412		—		¥	273,412
Intersegment		68,757		1,516		305		260		70,838	¥	(70,838	)		—
Total		245,158		55,186		35,856		8,050		344,250		(70,838	)		273,412
Operating expenses		213,419		51,806		30,915		6,904		303,044		(70,345	)		232,699
Operating income	¥	31,739	¥	3,380	¥	4,941	¥	1,146	¥	41,206	¥	(493	)	¥	40,713
Six months ended September 30, 2004	Japan		Americas		Europe		Asia /Oceania		Total		Eliminations			Consolidated
	(Thousands of U.S. Dollars)
Net revenue:
Customers	$	771,508	$	129,870	$	90,941	$	34,327	$	1,026,646		—		$	1,026,646
Intersegment		195,489		7,672		459		387		204,007	$	(204,007	)		—
Total		966,997		137,542		91,400		34,714		1,230,653		(204,007	)		1,026,646
Operating expenses		854,435		135,948		89,284		28,708		1,108,375		(188,447	)		919,928
Operating income	$	112,562	$	1,594	$	2,116	$	6,006	$	122,278	$	(15,560	)	$	106,718

Note: 1. For the purpose of presenting its operations in geographic areas above, the Company and its subsidiaries attribute revenues from external customers to individual countries in each area based on where products are sold and services are provided.

22

Notes (Unaudited)

1.

The U.S. dollar amounts included herein represent a translation using the mid price for telegraphic transfer of U.S. dollars as of September 30, 2004 of ¥111.05 to $1 and are included solely for the convenience of the reader. The translation should not be construed as a representation that the yen amounts have been, could have been, or could in the future be converted into U.S. dollars at the above or any other rate.

2.

The consolidated financial statements presented herein were prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP).

23

6. Summary of Non-consolidated Financial Results

for the Six Months Ended September 30, 2004

(Prepared in Accordance with Japanese GAAP)

November 9, 2004

KONAMI CORPORATION
Address:	4-1, Marunouchi 2-chome, Chiyoda-ku, Tokyo, Japan
Stock code number:	9766
URL:	http://www.konami.com
Shares listed:	Tokyo Stock Exchange, New York Stock Exchange, London Stock Exchange and Singapore Exchange
Representative:	Kagemasa Kozuki, Chairman of the Board and Chief Executive Officer
Contact:	Noriaki Yamaguchi, Executive Vice President and Chief Financial Officer (Phone: +81-3-5220-0163)
Date of Board Meeting to approve the financial results:	November 9, 2004
Date of commencement of interim dividend payment:	November 30, 2004
Adoption of interim dividend system:	Yes
Adoption of unit trading system:	Yes (1 unit: 100 shares)

1. Financial Results for the Six Months Ended September 30, 2004

(1) Results of Operations

	(Figures truncated)
	Net revenues (¥ million)		Change		Operating income (¥ million)		Change		Ordinary income (¥ million)		Change
Six months ended September 30, 2004	¥	58,350	(21.4	)%	¥	640	(95.3	)%	¥	3,685	(78.6	)%
Six months ended September 30, 2003		74,240	36.4			13,572	186.3			17,215	201.9
Year ended March 31, 2004		146,654				13,303				16,910

	Net income (¥ million)		Change		Net income per share (¥)
Six months ended September 30, 2004	¥	2,766	(75.1	)%	¥	22.98
Six months ended September 30, 2003		11,107	184.1			92.19
Year ended March 31, 2004		10,381				83.71

Notes: 1.	Weighted-average common shares outstanding
	Six months ended September 30, 2004:	120,388,556	shares
	Six months ended September 30, 2003:	120,484,155	shares
	Year ended March 31, 2004:	120,483,869	shares
2.	Change in accounting policies: None
3.	Change (%) of net revenues, operating income, ordinary income and net income represents the percentage change of the increase or decrease compared to the same period of the previous year.

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(2) Dividends

	Cash dividends per share
	Interim (¥)		Annual (¥)
Six months ended September 30, 2004	¥	27.00		—
Six months ended September 30, 2003		27.00		—
Year ended March 31, 2004		—	¥	54.00

(3) Financial Position

	Total assets (¥ million)		Total stockholders’ equity (¥ million)		Equity-assets ratio (%)	Total stockholders’ equity per share (¥)
September 30, 2004	¥	179,580	¥	105,512	58.8	¥	880.57
September 30, 2003		193,669		111,997	57.8		929.56
March 31, 2004		183,031		108,016	59.0		894.08

Notes:

Number of shares outstanding
September 30, 2004:	119,823,294	shares
September 30, 2003:	120,483,851	shares
March 31, 2004:	120,483,252	shares
Number of treasury stock
September 30, 2004:	8,914,272	shares
September 30, 2003:	8,253,715	shares
March 31, 2004:	8,254,314	shares

2. Financial Forecast for the Year Ending March 31, 2005

	Net revenues (¥ million)	Ordinary income (¥ million)	Net income (¥ million)	Cash dividends per share
				Year-end (¥)		Annual (¥)
Year ending March 31, 2005				¥	27.00	¥	54.00

Notes:

1. Non-consolidated financial forecast for the year ending March 31, 2005 is not disclosed.

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7. Non-consolidated Financial Statements

(1) Non-consolidated Balance Sheets (Unaudited)

	(Millions of Yen)
	September 30, 2003				September 30, 2004				March 31, 2004
				%				%				%
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	¥	40,926			¥	32,470			¥	40,216
Trade notes receivable		13				—				—
Trade accounts receivable		30,666				15,195				12,673
Inventories		6,920				6,592				7,960
Other (Note 1)		22,746				20,474				20,650
Allowance for doubtful accounts		(279	)			(167	)			(139	)
Total current assets		100,993		52.1		74,566		41.5		81,362		44.5
FIXED ASSETS :
Tangible fixed assets (Note 2)		1,533				2,392				2,087
Intangible fixed assets		1,071				6,830				3,112
Investments and other assets		90,070				95,791				96,469
Investment securities		83,448				89,231				88,718
Other		6,722				6,685				7,858
Allowance for doubtful accounts		(99	)			(125	)			(106	)
Total fixed assets		92,675		47.9		105,013		58.5		101,669		55.5
TOTAL ASSETS	¥	193,669		100.0	¥	179,580		100.0	¥	183,031		100.0

See accompanying notes to non-consolidated financial statements

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	(Millions of Yen)
	September 30, 2003					September 30, 2004					March 31, 2004
				%					%					%
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Trade notes payable	¥	5,696				¥	5,887				¥	6,235
Trade accounts payable		8,666					8,721					7,829
Short-term borrowings		7,418					—					—
Current portion of long-term debt		912					912					912
Current portion of long-term bonds		—					15,000					—
Income taxes payable		4					134					190
Other (Note 4)		5,783					6,157					7,138
Total current liabilities		28,480		14.7			36,814		20.5			22,306		12.2
LONG-TERM LIABILITIES:
Straight bonds		45,000					30,000					45,000
Long-term debt		5,340					4,428					4,884
Allowance for directors’ retirement Benefits		1,354					1,354					1,354
Long-term deposits received		67					41					41
Allowance for loss incurred by subsidiaries		1,430					1,430					1,430
Total long-term liabilities		53,192		27.5			37,253		20.7			52,709		28.8
Total liabilities		81,672		42.2			74,067		41.2			75,015		41.0
STOCKHOLDERS’ EQUITY:
Common Stock		47,398		24.5			47,398		26.4			47,398		25.9
Additional paid-in capital		47,106		24.3			47,106		26.2			47,106		25.7
Retained earnings		43,155		22.3			38,395		21.4			39,176		21.4
Voluntary earned surplus		24,301					29,094					24,301
Unappropriated earned surplus		18,854					9,300					14,875
Net unrealized gains on available-for-sale securities		—		—			1		0.0			—		—
Treasury Stock		(25,663	)	(13.3	)		(27,389	)	(15.2	)		(25,665	)	(14.0	)
Total stockholders’ equity		111,997		57.8			105,512		58.8			108,016		59.0
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	¥	193,669		100.0		¥	179,580		100.0		¥	183,031		100.0

See accompanying notes to non-consolidated financial statements

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(2) Non-consolidated Statements of Operations (Unaudited)

	(Millions of Yen)
	Six months ended September 30, 2003			Six months ended September 30, 2004			Year ended March 31, 2004
			%			%			%
Net revenues	¥	74,240	100.0	¥	58,350	100.0	¥	146,654	100.0
Cost of revenues		50,629	68.2		46,423	79.6		111,073	75.7
Gross profit		23,611	31.8		11,927	20.4		35,580	24.3
Selling, general and administrative expenses		10,039	13.5		11,286	19.3		22,277	15.2
Operating income		13,572	18.3		640	1.1		13,303	9.1
Non-operating income (Note 1)		4,067	5.5		3,339	5.7		4,227	2.8
Non-operating expenses (Note 2)		423	0.6		295	0.5		620	0.4
Ordinary income		17,215	23.2		3,685	6.3		16,910	11.5
Extraordinary income (Note 3)		1,541	2.1		0	0.0		1,468	1.0
Extraordinary losses (Note 4)		2,135	2.9		12	0.0		2,383	1.6
Income before income taxes		16,622	22.4		3,673	6.3		15,996	10.9
Income taxes:
Current		4			672			711
Deferred		5,511			234			4,903
Total income taxes		5,515	7.4		906	1.6		5,614	3.8
Net income		11,107	15.0		2,766	4.7		10,381	7.1
Unappropriated earned surplus carried forward		5,583			6,534			5,583
Reversal of legal reserve		2,163			—			2,163
Interim cash dividends		—			—			3,253
Unappropriated earned surplus	¥	18,854		¥	9,300		¥	14,875

See accompanying notes to non-consolidated financial statements

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Basis of Presentation

The accompanying interim non-consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in Japan.

Summary of Significant Accounting Policies

1. Marketable and Investment Securities

Investments in subsidiaries and affiliated companies and other securities for which the market value is not readily determinable are stated at cost based on the moving average method.

Other securities for which the market value is determinable are stated at market value as of the balance sheet date. Unrealized gains and losses on those securities are reported in the stockholders’ equity and the cost of securities sold is determined by the moving average method.

2. Derivative Financial Instruments

Derivative financial instruments are stated at market value.

3. Inventories

Inventories other than work in process are stated at cost determined by the moving average method.

Work in process consisting of hardware products is stated at cost determined by the moving average method while work in process consisting of software products is stated at cost determined by the specific identification method.

4. Depreciation Methods

Tangible fixed assets are depreciated using the declining balance method while intangible fixed assets are amortized mainly using the straight-line method. For in-house software, amortization is computed using the straight-line method based on the estimated useful life of 5 years.

5. Provisions

(a) Allowance for doubtful accounts

Generally, allowance for doubtful accounts is calculated based on the actual ratio of bad debt losses incurred. For specific accounts with higher possibility of bad debt loss, the allowance is determined by independent judgment.

(b) Allowance for employees’ retirement benefits (Prepaid pension expense)

Allowance for retirement benefits to be paid to employees as of balance sheet date is calculated based on the estimated amount of the projected benefit obligation and the plan assets at the fiscal year-end. Unrecognized net transition asset or obligation is amortized over 13 years.

Unrecognized actuarial net gain or loss will be amortized from the following fiscal year within the average remaining service period of 13 years on a straight-line basis.

(c) Allowance for directors’ retirement benefits

Required amount for retirement benefits to be paid to directors as of balance sheet date is reserved as liability.

(d) Allowance for loss incurred by subsidiaries

Allowance for loss incurred by subsidiaries is provided at the amount determined based on its financial condition.

6. Foreign Currency Translation

Monetary assets and liabilities denominated in foreign currencies are translated at the current exchange rates as of the balance sheet date, and the translation gains and losses are credited or charged to income.

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7. Leases

Finance leases other than those that deem to transfer ownership of the leased property to the lessee are accounted for as operating lease transactions.

8. Other significant matters

(a) Consumption Tax

Consumption tax is excluded from the stated amount of revenue and expenses.

(b) Income Taxes

Current and deferred income taxes for the six months ended September 30, 2003 are calculated on the assumption of the reversal of reserve for advanced depreciation in appropriations of retained earnings planned at the fiscal year-end.

Change in Presentation of Non-consolidated Financial Statements

Non-consolidated Balance Sheets

1. Short-term loans receivable is stated in other of current assets while it had been represented independently on the previous statements. It was ¥ 4,041 million as of balance sheet date, September 30, 2003.

2. Buildings and Other which had been represented separately on the previous statements is stated as Tangible fixed assets. Those were ¥ 205 million and ¥ 1,328 million as of balance sheet date, September 30, 2003 respectively.

Notes to Non-consolidated Financial Statements

Notes to Balance Sheets

1. Net amount of consumption tax payable and consumption tax to be refunded at September 30, 2004 is included in “Other” of current assets.

2. Accumulated depreciation of tangible fixed assets is as follows:

	(Millions of Yen)
	September 30, 2003		September 30, 2004		March 31, 2004
Accumulated depreciation of tangible fixed assets	¥	2,927	¥	3,306	¥	3,017

3. The Company guarantees subsidiaries’ loans payable to financial institutions as follows:

	(Millions of Yen)
	September 30, 2003	September 30, 2004			March 31, 2004
Konami Software Shanghai, Inc.	—	¥	87		¥	57
		(US$	785 thousand	)	(US$	543 thousand	)
Total	—	¥	87		¥	57

4. Net amount of consumption tax payable and consumption tax to be refunded at September 30, 2003 is included in “Other” of current liabilities.

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Notes to Statements of Operations

1. Non-operating income mainly consists of the following:

Six months ended September 30, 2003:	Interest income: ¥ 41 million, Dividend income:¥ 3,744 million, Foreign exchange gains:¥ 56 million
Six months ended September 30, 2004:	Interest income: ¥ 35 million, Dividend income: ¥ 3,199 million, Foreign exchange gains: ¥ 57 million
Year ended March 31, 2004:	Interest income: ¥ 86 million, Dividend income: ¥ 3,805 million, Foreign exchange gains: ¥ 23 million

2. Non-operating expenses mainly consist of the following:

Six months ended September 30, 2003:	Bond interest expenses: ¥ 200 million
Six months ended September 30, 2004:	Bond interest expenses: ¥ 200 million
Year ended March 31, 2004:	Bond interest expenses: ¥ 400 million

3. Extraordinary income mainly consists of the following:

Six months ended September 30, 2003:	Gain on sale of marketable securities: ¥ 1,300 million
Six months ended September 30, 2004:	None
Year ended March 31, 2004:	Gain on sale of marketable securities: ¥ 1,300 million

4. Extraordinary losses mainly consist of the following:

Six months ended September 30, 2003:	Loss on sale of land and buildings: ¥ 2,111 million
Six months ended September 30, 2004:	Loss on sale and disposal of fixed assets: ¥ 12 million
Year ended March 31, 2004:	Loss on sale and disposal of fixed assets: ¥ 2,212 million

5. Depreciation expense for each period is as follows:

	(Millions of Yen)
	September 30, 2003		September 30, 2004		March 31, 2004
Tangible fixed assets	¥	436	¥	464	¥	885
Intangible fixed assets		220		285		455

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Leases

Finance leases other than those deemed to transfer ownership of leased property to the lessee:

1. Acquisition cost, accumulated depreciation, and ending balance of leased assets

	(Millions of Yen)
	September 30, 2003
	Acquisition cost		Accumulated depreciation		Ending balance
Tangible fixed assets	¥	1,629	¥	1,069	¥	559
	¥	1,629	¥	1,069	¥	559

	(Millions of Yen)
	September 30, 2004						March 31, 2004
	Acquisition cost		Accumulated depreciation		Ending balance		Acquisition cost		Accumulated depreciation		Ending balance
Tangible fixed assets	¥	811	¥	361	¥	449	¥	701	¥	253	¥	448
Intangible fixed assets		10		3		7		10		2		8
Total	¥	821	¥	364	¥	456	¥	711	¥	255	¥	456

2. Obligations under finance leases

	(Millions of Yen)
	September 30, 2003		September 30, 2004		March 31, 2004
Due within one year	¥	251	¥	188	¥	175
Due after one year		334		288		303
Total	¥	586	¥	476	¥	478

3. Lease payments, depreciation expense and interest expense

	(Millions of Yen)
	Six month ended September 30, 2003		Six month ended September 30, 2004		Year ended March 31, 2004
Lease payments	¥	232	¥	110	¥	414
Depreciation expense		222		105		396
Interest expense		7		2		13

4. Depreciation expense is computed according to the straight-line method with lease term as useful life and salvage value of zero.

5. Interest expense is defined as the difference between total lease payment and acquisition cost, and allocated using the effective interest method to each period.

Investments in Subsidiaries and Affiliated Companies

Investments in subsidiaries and affiliated companies as of each balance sheet date are as follows:

	(Millions of Yen)
	September 30, 2003						September 30, 2004						March 31, 2004
	Balance sheet amount		Market value		Differences		Balance sheet amount		Market value		Differences		Balance sheet amount		Market value		Differences
Investments in subsidiaries	¥	1,312	¥	38,517	¥	37,205	¥	1,312	¥	46,073	¥	44,761	¥	1,312	¥	45,032	¥	43,720
Investments in affiliated companies		12,194		21,225		9,030		12,194		15,005		2,810		12,194		21,225		9,031
Total	¥	13,506	¥	59,742	¥	46,235	¥	13,506	¥	61,078	¥	47,571	¥	13,506	¥	66,258	¥	52,751

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