Outline of Tokyo Game Show 2011 Keynote Speech held on September 15, 2011

*This keynote was made by the president and CEO of Square Enix Holdings in his role as chairman of the Computer Entertainment Supplier’s Association.

(Continued from previous page.)*

What’s coming next is the browser and the cloud. These are the blue and green sections. To tell the truth, in this slide the Non-PC, PC, Browser Games and Cloud Games’ boundary lines don't have much meaning. Regardless of device or network, the axis itself is converging. We need to be a bit careful about the vocabulary. I think the word “browser,” as I use it here, is actually considered to be the “cloud” by most people. Now then, the browser has progressed to the point where the browser can do a pretty good job of playing games. This has already started to happen. Furthermore, the browser has the potential to play games at the level of the current game consoles. And storage will be managed in the cloud. Most people today think of the “cloud” as mainly dealing with storage. But the "cloud" I have written in this figure has processing itself done server side, the most extreme scenario. This will not happen in the near-term, so that boundary line doesn't have much meaning. In any case, what I wanted to explain is that the platform has moved toward the network, and eventually it will move further toward the cloud, which will greatly expand the market.

There's something we have to be careful of here. It used to be that customers who played games were filled with enthusiasm to play games. They didn't care about spending hundreds of dollars for the hardware, and then $60 to buy software. But when you can play games on any device, and a consumer no longer has to make investments in hardware or software, games can become like any other service. In other words, playing a game is as easy and natural as being invited to Facebook by a friend. That dedicated resolution a player needed to have in order to play a game is gone, and it would be strange for developers to ask for such resolution on behalf of the customers. The people we call the "casual users"- that type of customer will increase. This is something we have to keep in mind for those of us making games. The market expansion means that the profile of our customers becomes further segmented. And, of course, our core users remain incredibly important.

That said, we should be conscious when targeting those people who are not already core users.

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