Outline of Results Briefing held on November 6, 2014

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In terms of global reach, our target business regions used to be areas where console game machines prevailed. Today, PCs and smart devices have become widespread across the globe, and we see huge market opportunities exist worldwide. As for consoles, they are becoming more common in the Middle East and Central/ South America. Conducting business uniformly across all regions is not sensible because of differences in income level, consumption propensity and monetization conditions. However, the Company intends to touch on regions that have not been previously reached to bring new and existing titles and actively pursue in localized development initiatives. In these terms, we believe that the Middle East and South America, in particular Brazil, are promising markets. Russia has long been considered a challenging market to go into, however this region is very active with F2P and online games. They are also home to many talented developers, which are justifications to consider Russia in many options, including sourcing for development studios. In brief, the Company is expected to reach out to wider regions in its efforts to expand the business outside of the domestic market.


Next, I would like to explain the establishment of our pipeline. We see our pipeline in two major categories: Blockbuster titles and LIVE games. Blockbuster titles on the bottom row refer to flagship titles that are symbolic to the Company, notably the big three “FINAL FANTASY,” “DRAGON QUEST,” and “KINGDOM HEARTS” developed by our domestic studios, and “TOMB RAIDER,” “JUST CAUSE,” and “DEUS EX” developed by our overseas studios. We will continue to develop these titles as in the past. Blockbuster titles require huge investment, however we can recoup the costs on a lifetime basis because of their long-lasting sales. For example, PC versions of “DRAGON QUEST VII” and the early works of “FINAL FANTASY” series are still being sold after their launch of 20 years agos. Blockbuster titles are sold and earnings booked over an extended period. From the aspect of selling titles over the long term, extensive sales channels are the key. We, however, see a diversification in sales channels recently, including the rise of cloud gaming, which makes long-range/multiple region sales even more possible. Blockbuster titles are our brand and our identity, and we believe it is our mission to continue to produce these titles.

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