Outline of Results Briefing held on November 6, 2012
To briefly touch on the business outlook for the next two fiscal years, the Amusement segment will definitely improve. We also believe that the Publication and Merchandising segments will maintain the same levels of success as the current fiscal year.
Digital Entertainment: I believe MMO will begin providing a steady profit contribution next fiscal year. With the launch of DQX, expense of the capitalized development costs of the large-scale title preceded earning revenues from operations, and we are not expecting to see ample profits within the current fiscal year.
While we are about to complete renovations of the current version of FINAL FANTASY XIV (FFXIV), and will launch the “reborn” version soon, we do not anticipate the title’s contribution to the bottom-line this fiscal year. We anticipate profit contribution, however, starting the next fiscal year.
MMO is showing successful progress towards becoming a solid foundation of our corporate earnings from the next fiscal year.
Social Gaming & Others is doing significantly well. Since we have a great “batting average” when it comes to making popular games, we have a good chance to recoup profit levels within this fiscal year, if one of these titles results in a smash-hit.
As for HD Games, we expect earnings to remain on a plateau for the next one to two years. Although we are scheduled to launch big titles, the key is how we transform our business and revenue models for the coming years. It will take approximately three years until these new models are understood and accepted by both creators and customers. As I have mentioned in the past couple of years, changes in business and revenue models do take time to penetrate. Of course, while we will continue to generate some level of profit during the transition period, I expect that it will take two to three years to see considerable growth in this area.
In summary, we are anticipating a significant rise in MMO in the next fiscal year, and we will be well-positioned to constantly aim for the upside in the Social Games & Others. These two segments will undoubtedly become the strong foundation that sustains our corporate revenues. HD Games, on the other hand, are expected to remain at roughly the same level for the next two years.