Outline of Results Briefing held on November 6, 2014

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(Continued from previous page.)*

I would like to put emphasis on the fact that titles published on GANGAN ONLINE became smash hits after they were adapted to television anime series. The trend of shift from paper media to online is getting prominent in comic and manga genres. We see new trends such as; more mangas being read on smartphones and tablets, popular online mangas turned into paper comics, and talented manga writers recruited online. In addition, we cannot ignore the cost-saving benefits of not having expenses for raw material and distribution, which are incurred for paper media. It was particularly significant that smash hit works were born in a way that fits the current lifestyle of young people. In the second half of FY 2015/3, we have titles like “Gugure! Kokkuri-san,” scheduled to become television anime series as well as various new initiatives for future fiscal years. Sales trend for e-Books on the upper section also shows solid performance. We have received countless offers domestically and internationally, including Asia. While there are still some uncertainties, we are excited to see this business grow substantially.
With the strong trend to digitalize and go online in the publication industry, we, will catch this wave and continually work to boost this business.

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This slide explains briefly on cloud gaming. As I have mentioned, we believe that the cloud would take on a key role in game distribution in the future. “DRAGON QUEST X” for 3DS launched services as a cloud game in September. Service was not stable at the beginning, causing inconvenience to our customers, however I am happy to report that the service is now stable. Cloud gaming services may become instable at the outset, however going forward, we intend to provide sound and reliable services, including at the technical level. DIVEIN, a cloud gaming service for smartphone and tablet, was planned to already be running, however this has been delayed. We intend to begin services very shortly. Catalog titles on our e-Store will be offered on this streaming service, which can maximize the value of our previous Blockbuster titles. HD games can be easily applied to streaming services, as they are developed on PC architecture, and based on this, released on multiple platforms. We are committed to work on DIVEIN as an important channel of the future game distribution.

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