CEO Interview
Results for Fiscal Year Ended March 31, 2009

May 26, 2009

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Business plan for current fiscal year
Business Segment Changes for Appropriate Management of Device- and Media-Specific Revenue

Sales of the new installments in the DRAGON QUEST and FINAL FANTASY series are expected to have a significant effect on figures for the current fiscal year.

Wada

We have raised our projections for the current fiscal year's consolidated results, with net sales of 180 billion yen, operating income of 25 billion yen, and net income of 15 billion yen. DRAGON QUEST IX: HOSHIZORA NO MAMORIBITO, which is due for release on 11 July, is generating great interest, but we would like all segments including Games to build on the foundation we have constructed and be more dynamic.

Could you give us more details of the business plan for the full year?

Wada

Before that, I would like to mention the changes in our business segments. Since the acquisition of TAITO, we have reported all TAITO-related financial results as an independent segment, rather than as an integrated part of the Group as a whole. But now, with the integration of EIDOS, we have been given the opportunity to change our business segments to better reflect the Group's strategy. Even though each company within the Group uses its own unique character to create and operate its contents and services, revenues should be managed for the Group as a whole with respect to the devices and media through which they are generated. Through this change, we expect we will be able to gain a more accurate picture of our revenues based on the devices and media used.

FY2010 Full-Year Projections by New Segment

The new Games segment will comprise the original Games (Offline) segment together with the Games (Online) segment. This is not only because all games now have an online element, but also because we are now able to gain profit from using this situation, so there is no longer any reason for treating them as separate segments. The total sales target for the combined SQUARE ENIX, EIDOS and TAITO games business this year is 93 billion yen. Unit sales in North America and Europe will increase, but we are also aiming at a sales composition which reflects the market size of each territory worldwide by the fiscal year ending March 31, 2011.

We are aiming at sales of 60 billion yen for the Amusement segment. This market is yet to recover, but in the meantime we will keep trying to reduce fixed costs and working out measures to increase the turnover of arcade game machines. We are hoping to open double-digits new amusement facilities, with a balance of the three types - directly-operated, franchise, and arcade game machine leasing. Since last term, we have been making progress in the development of arcade game machines with lower installation costs to improve operation for amusement facility owners, and we aim to concentrate more on this area.
Target sales for the Publication segment, which has been doing well, are 12 billion yen, and we will continue to promote cross-media integration and improve effectiveness.

Due to the increased use of smart phones, the mobile phone contents market environment, especially overseas, will improve significantly we think. Until now, we haven't made any concerted effort to break into the overseas mobile phone market because of the barrier presented by the plethora of devices and platforms, but we will now be moving ahead in this area. Of course this barrier is going to be gradually lower for all content providers, and so competition will be severe, but the effort is now much more worthwhile. The sales target for the Mobile Phone Contents segment is 11 billion yen. Merchandizing and Others is expected to bring in 4 billion yen. The Merchandizing and Others segment was previously part of the Others segment, but since the quality of our products derived from our own IP has been so highly regarded by other companies, this segment has become involved not only in the merchandizing of our own IP, but also that of other companies. For this reason, we established this new Merchandizing and Others segment.

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