CEO Interview
CEO Interview on Consolidated Results for FY2006

May 23, 2007

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Review of the Consolidated Results for FY2006
We aim to continue growing as the provider of world's finest contentsand services.

Last year you began strengthening the game development process in order to address the expanding market.

WADA

In terms of geographic area and user profile, the game software market is still expanding. We have changed our development system in order to exploit this market growth. Last year we established our Research and Development Division in order to build a technology platform for the sharing of the company’s proprietary technologies across the whole company. This enables us to develop a wide range of game software, to learn from the rapid progress in technology and graphics, and to improve our skills. We have no intention of changing our basic priority of producing cutting-edge games, but a culture of collaborative research and development is also important in order to meet the diversity of the games market promptly.

You have built working alliances with Matsushita Electric Industrial Co., Gakken Co, and Xavel, Inc., amongst others. What are your plans for the future?

WADA

We are always looking for alliance partners to broaden our range of collaboration. The whole structure of society is set to change dramatically with progress in the network environment. By keeping an eye on other business areas to see what new ideas they are implementing, we are hoping to find opportunities to collaborate with others on a global scale. In this new world connected by the internet, national borders no longer exist, and the current profiling of customers by age, sex or nationality is beginning to lose its relevance. Cooperation between industry and academia is another vital approach that we are very interested in.

Do you think there will be a change in the current segmentation of the business: Games, Online Games, Mobile Phone Content, Publication, Amusement, and Others?

WADA

Thinking 3 to 5 years ahead, we may need a different categorization. Providing our business segment information based on the lifestyles of customers would also be an interesting approach. By satisfying the preferences and lifestyles of a variety of customers and always striving for further improvements, we hope to continue growing as a company providing the world’s finest contents and services.

And finally, at the FY2006 Results Briefing Session on 23 May, you set down the bold target of ¥50 billion in recurring income by FY2011.

WADA

We set recurring income targets of ¥25bn to ¥35bn for the businesses of Square Enix, and ¥5bn to ¥15bn for TAITO’s Amusement business, bringing a total of ¥50bn in recurring income. Four years since it was established in 2004, the company has now entered its second growth stage, and we now have our sights set on achieving this major goal.

(Interviewer: Motoshi Isobe, Journalist)
May 23, 2007

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