Merger Update

Konami Corporation
28 July 2005


FOR IMMEDIATE RELEASE



                                                                                                          July 28, 2005



                                                                                                     KONAMI CORPORATION

                                                                             2-4-1 Marunouchi, Chiyoda-ku, Tokyo, Japan

                                                                                                        Kagemasa Kozuki

                                                                                        Representative Director and CEO

                                                                                        Stock code number: 9766 at TSE1



                                                                                             Contact: Noriaki Yamaguchi

                                                                   Executive Vice President and Chief Financial Officer

                                                                                                   Tel: [phone]


Announcement:



Merger of Konami and Konami Marketing Japan, and Establishment of a new Subsidiary for Distribution and Services



Konami Corporation ('Konami') hereby announces today that, pursuant to resolutions of meetings of the
respective Boards of Directors of Konami and Konami Marketing Japan, Inc., ('KMJ'), a wholly owned
consolidated subsidiary of Konami, held on July 28, 2005, KMJ will merge with and into Konami, effective on
October 1, 2005.

Prior to the merger with Konami, KMJ will divide its distribution and customer-service departments and
establish a new consolidated subsidiary.


1.          Objective of Merger
KMJ has operated the sales and distribution functions for Konami's video game
soft-ware, toys, card games, and amusement facilities businesses including sales
promotions, distribution and customer services. KMJ will divide its distribution and
customer-service departments and establish 'Konami Logistics and Service, Inc.'
effective October 1, 2005. On the same date, the sales and promotion department will
merge into Konami as the 'Marketing Department'. Konami will take over and cover
KMJ's sales and promotion operations, in addition to the planning and production
functions for Konamifs digital entertainment business. We believe that integrating
KMJ's businesses into Konami will enable us to operate the business more effectively
and strategically.








2.       Outline of Merger
(1) Schedule of Merger
     Board approval for the merger agreement:       July 28, 2005
     Signing of merger agreement:                   July 28, 2005
     Effective date of merger:                      October 1, 2005


(2) Method of Merger
      Konami will be the surviving entity and KMJ will subsequently be dissolved. This merger will take
      place without the approval of a meeting of Konami's shareholders in accordance with Article
      413-3-1 of the Japanese Commercial Code. In addition, KMJ will divide its distribution and
      customer-service departments, and establish a new consolidated subsidiary without the approval of
      a meeting of KMJ's shareholders in accordance with Article 374-6-1 of the Japanese Commercial
      Code.


(3) Merger Ratio

     Company             Konami              KMJ
     Merger Ratio          1                  1

Konami owns 100% of the shares of KMJ. Therefore, Konami will not issue new
stock on increase its capital in connection with the merger.


(4) Cash Paid for the Merger
Cash will not be paid for the merger.


3.       Outline of Merging Companies
   Registered name                        Konami                              KMJ
   
   Main Business            Production, manufacture and sales  Sales and promotion activities of
                            for consumer game software,        game software, character goods and
                            contents for amusement facility    amusement machines for whole sale
                            and toys
   
   Date of                  March 19, 1973                     October 1, 2000

   incorporation
   
   Location of head         2-4-1 Marunouchi,                  6-10-1 Roppongi, Minato-ku, Tokyo

   office                   Chiyoda-ku, Tokyo
   
   Representative           Kagemasa  Kozuki                   Hiroshi  Akiyama

                            Chairman of the Board and CEO      Representative Director and
                                                               President

   Capital                  47,398 million yen                 1,162 million yen
   
   Total number of          128,737,566                        23,173
   shares issued
    
   Stockholders'            111,423 million yen                4,934 million yen

   equity

   (as of March 31, 2005)
   
   Total assets             187,798 million yen                13,857 million yen

   (as of March 31, 2005)
   
   Financial year end       March 31                           March 31
   Number of                876                                304

   employees

   (as of March 31, 2005)
   
   Major vendors            (Vendors)                          (Vendors)

   and                      Sony Computer Entertainment Inc.   Konami

   customers                Nintendo Co., Ltd.



                            (Customers)                        (Customers)

                            Konami Marketing Japan, Inc.       GEO Corporation

                                                               Yodobashi Camera Co. LTD,
   Major shareholders       Kozuki Holdings B.V.     10.50%    Konami                   100%
                            Kozuki Foundation for    10.40%
   and shareholding         Sports and Education
                            Konami                   7.18%
   ratios                   The Master Trust Bank    7.10%

   (as of March 31, 2005)   of Japan, Ltd.
                            Japan Trustee Services   6.38%
                            Bank, Ltd.
                            Kozuki Capital           5.43%
                            Corporation
   Main Bank                Sumitomo Mitsui                    Sumitomo Mitsui

                            Banking Corporation                Banking Corporation
   Relationship between     Capital      Konami owns 100% issued share of KMJ.
                            Personnel    None
   parties                  Transaction  KMJ's sales and promotion of goods of digital
                                         entertainment business to be purchased from Konami.


Financial results for the three years ended March 31,2003, 2004 and 2005.
                                           (Millions of yen, except per share data)
                  Konami
Fiscal year ended    March 31, 2003        March 31, 2004        March 31, 2005
Net revenues                    130,186               146,654               134,117
Operating income                 11,577                13,303                 4,261
Ordinary income                  13,068                16,910                13,447
Net income (loss)              (11,284)                10,381                12,794
Net income (loss)               (92.82)                 83.71                105.33
per share (yen)
Dividend per                      54.00                 54.00                 54.00
share (yen)
Stockholders'                    872.38                894.08                931.24
equity per share
(yen)




                                                            (Millions of yen, except per share data)
                                                            KMJ
Fiscal year ended           March 31, 2003            March 31, 2004            March 31, 2005
Net revenues                              84,035                    84,653                    82,636
Operating income                           2,266                     2,432                     2,871
Ordinary income                            2,324                     2,503                     2,977
Net income                                 2,129                     2,385                     3,024
Net income per share                      91,133                    62,994                    90,453
(yen)
Dividend per share                        41,300                    31,200                   142,700
(yen)
Stockholders' equity                     127,509                   153,054                   598,016
per share (yen)





4.       Condition of Serving Entity
Registered Name        Konami Corporation


Main business          Planning, production, sales, promotion, and distribution of video game software,
                       contents for amusement facilities, card games and toys, online games, contents for
                       mobile phones, music and video.
Location of head       2-4-1 Marunouchi, Chiyoda-ku, Tokyo
office
Representative         Kagemasa Kozuki
Capital                47,398 million yen
Total assets           Not fixed
Financial year end     March 31


Effects on results of operation
     As a result of the merger, our consolidated operating results are expected to improve through
     more efficient business operations. However, we are not able to forecast the effect the merger
     will have on our consolidated operating results





5.   Outline of new consolidated subsidiary


(1)   Registered name                   Konami Logistics & Service, Inc
(2)   Main business                     Repair, customer-service, set-up and delivery of amusement related
                                        equipment and health related equipment.
(3)   Date of incorporation             October 1, 2005
(4)   Location of head office           5-1-1 Higashihara, Zama city, Kanagawa
(5)   Representative                    Tetsuya Yamamoto
(6)   Capital                           100 million yen
(7)   Financial year end                March 31
(8)   Number of employees               112 (uncertain)
(9)   Major shareholders                Konami 100%
      and shareholding
      ratios
(10)  Relationship with Konami          Subsidiary






This press release contains forward-looking statements about our industry, our business, our plans and objectives, our
financial condition and our results of operations that are based on our current expectations, assumptions, estimates
and projections. These forward-looking statements are subject to various risks and uncertainties. Known and unknown
risks, uncertainties and other factors could cause our actual results to differ materially from and be worse than those
contained in or suggested by any forward-looking statement. We cannot promise that our expectations, projections,
anticipated estimates or other information expressed in or underlying these forward-looking statements will turn out to
be correct. We do not undertake any obligation to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise.




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