CEO Interview
The new fiscal year has begun and we must fundamentally strengthen our Digital Entertainment segment

May 30, 2011

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Measures taken to strengthen the future revenue base through a tightened title selection standard, extraordinary loss recorded

It's been more than two months since the Tohoku Pacific Earthquake and Tsunami.

WADA

First of all, we would like to express our heartfelt sympathies for all those affected by the Tohoko Pacific Earthquake and Tsunamis. We hope and pray for the swift recovery of the region and its people. The Square Enix Group of companies worldwide donated over 100 million yen to the Japanese Red Cross Society in support of relief efforts - employees contributed as well. We have also begun accepting disaster relief donations through some of our online game services.
And while in our company we had the idea to try to lift spirits with the donation of actual games beyond our financial contributions, in reality the diverse infrastructure challenges across the region proved too difficult.

In May there was an incident involving the leak of personal information at one of your subsidiaries.

WADA

I would like to express our sincerest regret for the inconvenience this incident may have caused our customers and other stakeholders. As we disclosed at the time, there was unauthorized access to parts of certain websites managed by Square Enix Ltd. with headquarters in London.
I think the quick emergency measures we took including the shut down of websites within 30 minutes of discovering the damage prevented the leak from expanding. We are now conducting a full-scale investigation into how this leak happened.

The fiscal year ended March 2011 showed very difficult results.

WADA

In December of last year, we announced a downward revision of earnings, so the weak sales information was given at that time. New at this announcement were the extraordinary losses of about 16 billion yen. These non-cash measures cleaned our balance sheet significantly and prepared us for the future. The biggest items were the write-down of goodwill and intangible assets held both in and outside of Japan amounting to 8.8 billion yen and costs relating to the cancellation of certain game projects. The real issue is not extraordinary losses, but the decline in profit on the operating level. This is what we must address urgently and are putting all our efforts to correct this fiscal year.
Further, I would like our investors to know that given what we see as the Group's tremendous latent potential based on our continued strategic focus, we have decided to keep our cumulative annual dividend of 30 yen per share set out at the start of the fiscal year.

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