CEO Interview
Summary of Financial Results for the First--Half Period Ended September 30, 2009.

Nov 16, 2009

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Progress of Global Strategy, and Prospects
Plans to release major overseas titles in Japan

At the Financial Results Meeting you mentioned the lineup for December 2009 release.

Wada

Batman: Arkham Asylum

  • BATMAN: ARKHAM ASYLUM Software © 2009, 2010 Square Enix Ltd. Developed by Rocksteady Studios Ltd. Published by Square Enix Co.,Ltd. Rocksteady and the Rocksteady logo are trademarks of Rocksteady Studios Ltd. Eidos and the Eidos logo are trademarks of Square Enix Ltd. All other trademarks and copyrights are the property of their respective owners. All rights reserved.
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In December we are releasing FINAL FANTASY XIII in Japan, along with Assassin's Creed II from major French games maker UBISOFT, and Call of Duty: Modern Warfare 2 from US company Activision Blizzard, together with other overseas titles. Furthermore, in January we are releasing an Eidos brand title Batman: Arkham Asylum in Japan. I believe these overseas titles have excellent qualities, and it is not too much to say that amongst them is the possibility of a million-seller. Nevertheless, the situation regarding distribution and retailing of imported titles in the Japanese market remains rather constrained, and that is why we have been focusing extra effort with our sales force. We are also planning to release FINAL FANTASY XIII in North America and Europe in March.

What changes has the integration of Eidos brought about for the whole Group?

Wada

Things have been going extremely well, with structural integration now completed. There has been no departure of core staff, which usually occurs following mergers and acquisitions, and the integration of line-of-business reporting has begun to function. We think our experience in merging Enix and Square has worked.
Publishing operations have also been integrated, and communication between creators within the Group has been enhanced. We have decided that the Square Enix CG production team will collaborate on a title that Eidos is currently developing. The Square Enix production team is keen to be involved in producing the genre of titles that Eidos has been working on. We are also going to establish a new system to integrate our vast digital assets. We want to drive ahead with improving the structure and efficiency of our debugging process which currently consumes a great deal of resources.

At the Financial Results Meeting you drew attention to headcount adjustments.

Wada

I announced that we are anticipating a 10-15% reduction in the number of personnel from 3,805, the number of personnel as of March 31, 2009 for the whole Group, by the end of March 2010. With our new structure, we now have the perfect opportunity to invigorate the organization and enhance the performance of the entire Group. These adjustments are measures to make the organization more streamlined and are not, as is commonly imagined, a response to the business results, nor are they the result of departmental closures or cutbacks in the business. The personnel adjustments will be spread across the whole Group, including Square Enix, Eidos and TAITO. All functions will be involved, including sales, development and back office. I think it is both important and urgent to create an environment in which the heads of each organization are always fully informed and involved, and where the size of teams ensures they remain flexible and responsive.

What are the prospects for the full year to March 2010?

Wada

Our consolidated business forecast is for sales of 180 billion yen, and recurring income of 25 billion yen. We also forecast net income of 10 billion yen. The breakdown of forecast for sales by business segment is 93 billion yen for Games, 60 billion yen for Amusement, 12 billion yen for Publishing, 11 billion yen for Mobile Phone Content, and 4 billion yen for Merchandising.
In any case, we are focusing on building the foundations to achieve as soon as possible our medium-term plan of 50 billion yen recurring income, and to become the front runner in the global games industry.

(Interviewer: Motoshi Isobe, Journalist.)
Interview conducted on Nov 5, 2009

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