CEO Interview
Summary of the First-Half Period Ended September 30, 2008

Nov 13, 2008

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On October 1, 2008, Square Enix Group implemented a pure holding company system, becoming Square Enix Holdings Co. Ltd. Following the results briefing session for the first half of the fiscal year ending March 31, 2009, held for the first time since the changeover, we discussed the main points of the results with Company President Yoichi Wada.

Summary of the First-Half Period Ended September 30, 2008
Positive results in Games (Offline), Publication, Games (Online), and Mobile Phone Content. Operating income and other incomes revised upward for the first-half period ended September 30, 2008

Just before the financial results were released, you announced a revision to the consolidated results forecasts for the first half of the fiscal year ending March 31, 2009.

WADA

All segments of the company have made important contributions to these results. Domestic sales of DRAGON QUEST® V: Hand of the Heavenly BrideTM for the Nintendo DS®, released on July 17 this year, contributed to the figures achieved by the Games (Offline) segment. The Publication segment achieved record half-yearly sales, and the Games (Online) and Mobile Phone Content segments have also returned good results.

Could you give us the factors for each segment which led to the improvement in earnings?

WADA

Consolidated Financial Results and Projection / Consolidated Results and Operating Margin by Segment

In the Games (Offline) segment, domestic sales of DRAGON QUEST V alone reached 1.15 million units, while CRISIS CORETM -FINAL FANTASY® VII- for the PlayStation® Portable (PSP®), now released in Europe, shipped 620,000 units worldwide including repeat orders. As a result, the breakdown of total global sales of 4.98 million units is, 2.05 million in Japan, 1.56 million in North America, and 1.36 million in Europe and other PAL territories.
In the Games (Online) segment, FINAL FANTASY XI continues to earn steadily, and other online games licensed to external operators have also performed well.
The Mobile Phone Content sector was led by FINAL FANTASY IV THE AFTER -TSUKI NO KIKAN. This game for mobile phones was released in a series of episodes two months after the release of the FINAL FANTASY IV game for the Nintendo DS. The project was well-designed in that the prologue to the episodes was made available free of charge and the final episode could be reached by playing the episodes in any order. These features proved popular, with 2 million paid downloads recorded in the nine months from the start of the service in February. In addition to this success, other improvements have brought positive results, and the operating margin has risen significantly on a year-over-year basis, from 18.5% to 51.1%.

I think the beneficial synergy resulting from combining media has been evident in the Publication segment. Sales of comic books such as SOUL EATER, NABARI NO OU and SEKIREI have been boosted by the animated TV series based on the books, and sales of the KUROSHITSUJI comic books have been growing strongly. Despite the relatively low sales of game strategy guide books, results in the Publication segment have been good. I feel this segment of our business is becoming stronger. We will continue to adopt the policy of “growing with our authors,” and thereby aim to achieve an operating margin of 25%-30%.
The TAITO-operated Amusement segment has not been able to avoid the effects of an increasingly difficult market. However, the ability to maintain the industry’s highest growth rate in year-on-year comparison of monthly revenues from existing amusement facilities is itself commendable. This segment has also been making a considerable contribution to the cash flow of the whole group, and our amusement franchise project is now up and running, with our first store opening in September.

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