Prior Notice of Merger

Konami Corporation
16 December 2004


FOR IMMEDIATE RELEASE

                                                                                           December 16, 2004



                                                                                          KONAMI CORPORATION
                                                                  2-4-1 Marunouchi, Chiyoda-ku, Tokyo, Japan
                                                                                             Kagemasa Kozuki
                                                                               Chairman of the Board and CEO
                                                                                         Ticker 9766 at TSE1
                                                                                     Contact: Toshiro Tateno
                                                                    Director and Executive Corporate Officer
                                                                                        Tel: [phone]



                                                                 KONAMI COMPUTER ENTERTAINMENT STUDIOS, INC.
                                                                    6-10-1 Roppongi, Minato-ku, Tokyo, Japan
                                                                                           Kuniaki Kinoshita
                                                                       Representative Director and President
                                                                                       Ticker 4729 at JASDAQ
                                                                          Contact: Administration Department
                                                                                        Tel: [phone]



                                                                   KONAMI COMPUTER ENTERTAINMENT TOKYO, INC.
                                                                        1-8-10 Harumi, Chuo-ku, Tokyo, Japan
                                                                                          Michihiro Ishizuka
                                                                       Representative Director and President
                                                                                       Ticker 4780 at JASDAQ
                                                                        Contact: Corporate Planning Division
                                                                                        Tel: [phone]



                                                                   KONAMI COMPUTER ENTERTAINMENT JAPAN, INC.
                                                                    6-10-1 Roppongi, Minato-ku, Tokyo, Japan
                                                                                           Motoyuki Yoshioka
                                                                       Representative Director and President
                                                                                       Ticker 4338 at JASDAQ
                                                                                 Contact: Corporate Planning
                                                                                        Tel: [phone]



Merger with Subsidiaries



Each of Konami Corporation ('Konami') and its three subsidiaries, Konami Computer Entertainment Studios,
Inc, ('Konami STUDIO') , Konami Computer Entertainment Tokyo, Inc, ('Konami TYO') and Konami Computer
Entertainment Japan, Inc. ('Konami JPN'), (collectively, the 'Production Companies') hereby announce that
resolutions of the Board of Directors of each company at meetings held on December 16, 2004 decided that,
subject to the approval of shareholdersf meetings of each company, the Production Companies will merge with
Konami effective April 1, 2005.



1.       Objective of Merger

Currently, for the Computer & Video Games business of Konami Group, Production Companies develop game software, Konami
merchandizes such game software as the publisher and the products are sold through sales subsidiaries within the Konami
Group. After the merger, Konami will take over the Production Companyfs role. Konami will be an integrated game
software publisher, from planning and developing products to acquiring merchandizing rights to sales promotion, which
will enable us to be faster and more flexible in making business decisions.

We will shift our managerial resources into the online game business which is expected to grow, integrating and sharing
the creative forces and know-how in developing game software which each Production Company presently possesses
separately. In addition, we will enhance the effectiveness of the merger by merging with Konami Online, Inc., a
wholly-owned subsidiary which is a core company in our online game business, effective April 1, 2005. We will also
strive to improve synergy with our other businesses, including our Amusement business and Toy & Hobby business.



2.       Outline of Merger

A. Schedule of Merger
      Board approval on merger agreements:                         December 16, 2004
      Signing of merger agreements:                                December 16, 2004
      Shareholders meetings to approve merger agreements:          February 22, 2005
      Effective date of merger:                                    April 1, 2005


B. Method of Merger
      Konami will be the surviving entity and absorb Konami STUDIO, Konami TYO and Konami JPN, which
      will be subsequently dissolved.


C. Merger Ratio
      Company                 Konami           Konami STUDIO          Konami TYO        Konami JPN
      Merger Ratio              1                   0.42                 1.00              0.81


a. Share allotment
     0.42 share, 1.00 share and 0.81 share of Konami will be allotted to 1 share of Konami STUDIO,
     Konami TYO and Konami JPN, respectively.


b. Basis of the merger ratios
     The merger ratios were determined after consultation and negotiation with the subject companies
     based on the evaluation of merger ratios calculated by third-party organizations hired
     independently by each subject company. Daiwa Securities SMBC advised Konami and Ernst & Young
     Corporate Advisory advised each of Konami STUDIO, Konami TYO and Konami JPN.


c. Basis of calculation on merger ratio by third-party organization
     Daiwa Securities SMBC analyzed the four subject companies and their share value using the
     market share price method, discounted cash flow method and multiple method, and calculated the
     merger ratio on the basis of respective results.

     Ernst & Young Corporate Advisory analyzed the four subject companies and their share value
     using the market share price method and discounted cash flow, and calculated the merger ratio
     on the basis of respective results.


d. New shares to be issued with respect to the merger
     Konami will issue and allot 0.42 share, 1.00 share and 0.81 share of Konami for each 1 share of
     Konami STUDIO, Konami TYO and Konami JPN, respectively, to shareholders of Konami STUDIO,
     Konami TYO and Konami JPN, including beneficial owners recorded on the respective shareholder
     registers, including the beneficial owner shareholder register. However, Konami will not issue
     and allot any shares of Konami for 9,747,000 shares of Konami STUDIO, 9,207,550 shares of
     Konami TYO and 9,000,000 shares of Konami JPN held by Konami.


D.    Cash paid due to merger
      Konami will pay cash for exchange shares, 8.00 yen for 1 share of Konami STUDIO, 39.50 yen for 1 share
      of Konami TYO and 31.00 yen for 1 share of Konami JPN instead of a year-end dividend for the year
      ending March 31, 2005, to shareholders of Konami STUDIO, Konami TYO and Konami JPN one day before
      effective date of the merger. However, the amount of cash may be changed based on the operation
      results forecast of each Production Companies after consultation within the subject companies.



3.       Outline of Merging Companies


Registered name   Konami              Konami STUDIO        Konami TYO          Konami JPN
Main business     Production,         Production,          Production,         Production,
                  manufacture and     manufacture and      manufacture and     manufacture and
                  sales               sales                sales               sales
                  for consumer game   for consumer game    for consumer game   for consumer game
                  software, contents  software             software            software
                  for
                  amusement facility
                  and toys
Date of           March 19, 1973      April 3, 1995        April 3, 1995       April 1, 1996
incorporation
Location of       2-4-1 Marunouchi,   6-10-1 Roppongi,     1-8-10 Harumi,      6-10-1 Roppongi,
head              Chiyoda-ku, Tokyo   Minato-ku, Tokyo     Chuo-ku, Tokyo      Minato-ku, Tokyo
office
Representative    Kagemasa Kozuki     Kuniaki Kinoshita    Michihiro Ishizuka  Motoyuki Yoshioka
                  Chairman of the     Representative       Representative      Representative
                  Board and CEO       Director and         Director and        Director and
                                      President            President           President
Capital           47,398 million yen  1,213 million yen    2,323 million yen   3,366 million yen
Total number      128,737,566         14,941,500           14,601,840          14,424,000
of
shares issued
Stockholders'     108,016 million yen 5,782 million yen    12,113 million yen  13,947 million yen
Equity
(As of March 31,
2004)
Total assets (As  183,031 million yen 9,904 million yen    14,446 million yen  15,777 million yen
of March 31,
2004)
Financial year    March 31            March 31             March 31            March 31
end
Number of         904                 391                  300                 244
employees
(As of March 31,
2004)
Major vendors     (Vendors)           (Vendors)            (Vendors)           (Vendors)
and               Sony Computer       Sony Computer        Sony Computer       Sony Computer
customers         Entertainment Inc.  Entertainment Inc.   Entertainment Inc.  Entertainment Inc.
                  Nintendo Co.,       Nintendo Co., Ltd.   Nintendo Co., Ltd.  Nintendo Co., Ltd.
                  Ltd.
                                      (Customers)          (Customers)         (Customers)
                  (Customers)         Konami               Konami              Konami
                  Konami Marketing
                  Japan, Inc.
Major             Kozuki      10.50%  Konami      65.23%   Konami      63.06%  Konami      62.40%
shareholders      Holdings
                  B.V.
and shareholding
ratios            Japan       8.32%   Employees'  2.83%    Employees'  3.75%   Employees'  5.35%
                  Trustee             stock                stock               stock
(As of March 31,  Services            ownership            ownership           ownership
2004)             Bank, Ltd.
                  The Master  6.89%   Konami      2.19%    Konami TYO  2.96%   Konami JPN  2.80%
                                      STUDIO
                  Trust Bank
                  of Japan,
                  Ltd.
                  Konami      6.41%   Masahiko    0.43%    The Master  2.61%   The Master  2.57%
                                      Takeda
                                                           Trust Bank          Trust Bank
                                                           of Japan,           of Japan,
                                                           Ltd.                Ltd.
                  Kozuki      5.43%   Kuniaki     0.30%    BBH for     2.24%   Japan       1.21%
                  Capital             Kinoshita            Fidelity            Trustee
                  Corporation                              Japan Small         Services
                                                           Company             Bank, Ltd.
                                                           Fund
Main banks        Sumitomo            Sumitomo Mitsui      Sumitomo Mitsui     Sumitomo Mitsui
                  Mitsui Banking      Banking Corporation  Banking Corporation Banking Corporation
                  Corporation
Relationship      Capital                Konami owns 65.23% issued share of Konami STUDIO, 63.06%
between                                  issued shares of Konami TYO and 62.40% issued share of
                                         Konami JPN.
parties           Personnel              Noboru Onuma, full time corporate auditor of Konami, also
                                         serves as corporate auditor of Konami TYO and Konami JPN.
                  Transaction            Production Companies have entered into the development
                                         agreement for consumer game software with Konami.
                                         Production Companies license Konami to merchandize
                                         consumer game software.
                                         Production Companies sell consumer game software to
                                         Konami.



Financial results for the three most recent years


                                                             (Millions of yen, except per share data)
                                      Konami
Fiscal year ended on                  March 31, 2002            March 31, 2003         March 31, 2004
Net revenues                                 123,283                   130,186                146,654
Operating income                              11,083                    11,577                 13,303
Ordinary income                               11,792                    13,068                 16,910
Net income (loss)                              8,675                  (11,284)                 10,381
Net income (loss) per                          67.96                   (92.82)                  83.71
 share (yen)
Dividend per share                             54.00                     54.00                  54.00
 (yen)
Stockholders' equity                        1,029.80                    872.38                 894.08
 per share (yen)


                                                             (Millions of yen, except per share data)
                                 Konami STUDIO
Fiscal year ended on                  March 31, 2002            March 31, 2003         March 31, 2004
Net revenues                                   8,740                     9,651                  9,549
Operating income                               1,952                     2,134                    937
Ordinary income                                1,959                     2,146                    941
Net income                                     1,158                     1,227                    448
Net income per share                          194.44                     81.43                  30.02
 (yen)
Dividend per share                             78.00                     43.00                  16.00
 (yen)
Stockholders' equity                          930.30                    415.03                 395.22
 per share (yen)


                                                             (Millions of yen, except per share data)
                              Konami TYO
Fiscal year ended on                  March 31, 2002            March 31, 2003         March 31, 2004
Net revenues                                   8,118                    13,614                 12,917
Operating income                               1,862                     4,515                  4,526
Ordinary income                                1,870                     4,537                  4,569
Net income                                     1,066                     2,574                  2,623
Net income per share                           80.64                    174.52                 180.34
 (yen)
Dividend per share                             32.50                     89.50                  93.00
 (yen)
Stockholders' equity                          701.37                    776.47                 852.04
 per share (yen)


                                                             (Millions of yen, except per share data)
                              Konami JPN
Fiscal year ended on                  March 31, 2002            March 31, 2003         March 31, 2004
Net revenues                                   9,054                     7,974                  8,581
Operating income                               3,577                     3,556                  2,566
Ordinary income                                3,486                     3,556                  2,566
Net income                                     1,873                     2,082                  1,453
Net income per share                          236.81                    143.40                 101.43
 (yen)
Dividend per share                             78.00                     74.00                  52.00
 (yen)
Stockholders' equity                        1,345.13                    972.68                 993.34
 per share (yen)



Notes:

1. There was a 2.5-for-1 stock split of Konami STUDIO shares effective May 20, 2002.
2. There was a 1.1-for-1 stock split of Konami TYO shares effective May 20, 2002.
3. There was a 1.5-for-1 stock split of Konami JPN shares effective May 20, 2002.

4.       After the Merger

Registered name        Konami Corporation
Main business          Production, manufacture and sales for consumer game software, contents for
                       amusement facilities and toys
Location of head       2-4-1 Marunouchi, Chiyoda-ku, Tokyo
office
Representative         Kagemasa Kozuki
Capital                47,398 million yen
Total assets           Undecided
Fiscal year end        March 31


Effects results of operation
     As a result of the merger, our consolidated operating results are expected to improve as a result
     of improved business efficiency. However, currently forecast for our consolidated operating
     results after the merger is not determined.




To Shareholders in the United States:



The business combinations referred to in this press release involve an offer of the securities of a non-U.S. company.
The offer is subject to the disclosure requirements of a non-U.S. country that are different from those of the United
States. Financial information included in this press release has been prepared in accordance with non-U.S. accounting
standards that may not be comparable to the financial information of United States companies.


It may be difficult for you to enforce your rights and any claim you may have arising under the U.S. federal securities
laws, since the issuer is located in a non-U.S. country, and some or all of its officers and directors may be residents
of a non-U.S. country. You may not be able to sue a non-U.S. company or its officers or directors in a non-U.S. court
for violations of the U.S. securities laws. It may be difficult to compel a non-U.S. company and its affiliates to
subject themselves to a U.S. courtfs judgments.


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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