CEO Interview
Interview with Yoichi Wada on Square Enix’s Consolidated Results for FY2007

May 29, 2008

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In preparation for the future convergence of the media and content markets, Square Enix will be implementing a holding company system from October 1, 2008. We asked company president Yoichi Wada about the company’s vision and plans for 2011 and beyond.

Consolidated Results for FY2007
Preparing for the Next Generation, while Maintaining Financial Soundness

How would you evaluate the fall in revenue and profits detailed in the Consolidated Results for FY2007 ended March 2008?

WADA

Given the good results recorded in FY2006, we expected a fall in revenue and profits for FY2007. Our operating income met the initially released consolidated results forecasts, without the release of DRAGON QUEST IX: Hoshizora no mamoribito for the Nintendo ® DS system. We have also maintained a firm financial footing, and I think we are keeping operating results on a steady course.

The Publication, Amusement and Others segments performed well, despite difficulties in the Games segment.

WADA

FY2007 Results and FY2008 Projections Consolidated / FY2007 Results and FY2008 Projections by Segment - Consolidated

In the Games segment, we may not have had a massive-selling title, but we have been aiming to build a profit structure that can guarantee revenue streams. Alongside CRISIS CORE - FINAL FANTASY VII- for the PSP® (PlayStation®Portable) system, which sold 1,250,000 units in Japan and North America, other such titles include DRAGON QUEST IV: Chapters of the Chosen, for the Nintendo DS, which sold 1,115,000units in Japan. The Publication segment earned an operating income of 3.6 billion yen. Even though we did not have a best-selling game strategy book, we did have several comic book hits, including KUROSHITSUJI and SOUL EATER, which enabled us to have another successful term following the previous one. Furthermore, the TAITO-operated Amusement segment earned an operating income of 3.1 billion yen, thanks to growth in year-to-year comparison of revenues from existing outlets that took its core arcade game operation business to the top within the industry. In the Others segment, both sales and operating income were more than double the previous term, thanks to the full release in July of the trading-card based arcade game DRAGON QUEST MONSTER BATTLE ROAD.

Taking these into consideration, what are the prospects for FY2008 ending March 2009?

WADA

While continuing to pursue increased profits, we believe it is also imperative to be well-prepared for the industry’s next development stage atarting from 2010. For this reason, our forecast for consolidated results remains at the same level as the previous term. Also, for our rejuvenated Amusement segment, we have targeted around 10 billion yen in annual recurring income over the next two years.

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