Outline of Results Briefing held on November 6, 2014

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Next is the MMO business. This graph shows the quarterly sales. It’s going up and down, since disk sales are included. Please note that sales temporarily increase when disks are launched. Excluding disk sales, subscription fee revenue is growing steadily, while “DRAGON QUEST X,” and “FINAL FANTASY XIV,” are stably generating income, and contributing to our earnings. In FY2016/3, we will launch expansion disks for “DRAGON QUEST X,” in April (already released), and for “Final Fantasy XIV,” in June. Through the launches of these expansion disks, we plan to retain the existing users, as well as capture new customers.

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This graph shows the quarterly sales for games for smart devices and PC browser. Apart from the ups and downs due to seasonality, this business is growing substantially overall. We achieved material progress in FY2015/3, and secured high rankings for many titles. Meanwhile, when you try to put many titles in the high rankings, you will face operational difficulties, such as an increase in fixed costs. The key challenge is to maintain balance between the two, and operate efficiently while winning high rankings for many titles. We will be releasing several titles in FY2016/3 too. With the difficult market environment, we cannot tell whether they will turn out to be hits or not until after the release. In that sense, you could say that games for smart devices are also quite volatile, like HD games.

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The Amusement segment was significantly impacted by the consumption tax rate hike. However, we were able to absorb some of the negative impact through the restructuring of unprofitable stores, which we had been working on from the past. Although the overall amusement market is shrinking, we are becoming able to acquire advantageous locations for our stores. We will benefit from ending up as one of survivors in this market, and are confident that earnings will remain robust. In order to improve the convenience for customers, we will start introducing an e-money payment system to our major stores from this May. Meanwhile, we are seeing more foreign tourists come to our stores in the major cities such as Tokyo, Sapporo and Fukuoka. We will continue to refine our operations, for example by accepting China’s UnionPay cards for Chinese visitors.

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