Outline of Results Briefing held on May 12, 2016

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Let’s first look at premium apps for smart devices. Currently, the smart device game market is essentially dominated by F2P games. However, advancements in smartphone performance are beginning to make it possible to play content-rich games that ordinarily would have been suited for portable game consoles. Games like FINAL FANTASY IX, ADVENTURES OF MANA, and Romancing SaGa, which you see here, may not generate the sort of explosive sales that F2P games do, but they have been strong sellers over the long term, meaning that they have scalability over time.
Meanwhile, as I mentioned earlier, the release of new titles in the FINAL FANTASY franchise results in strong app sales of previous FINAL FANTASY titles. As such, we see the premium app game business as a self-sustaining business while the F2P business requires continuous operational efforts to generate revenue.
Provided that we are able to enliven the premium app game market in such a way that we can set appropriate sales prices and secure our margins, we believe that the market is one that holds significant promise. We also believe that the earnings impact could be significant once development costs have been depreciated and earnings begin to accumulate. Given the massive installed base of smartphones, we intend to devote solid investments to this domain, including in terms of new title development.

Next I turn to the very hot topics of VR (virtual reality) and AR (augmented reality). We are also undertaking multiple projects in these fields. In a few years, “VR mode” may come as a standard feature just as the multi-player mode has been added to single-player games up until now. We see this as a field in which we can leverage our high-end technological prowess. Other firms are also hiring HD game developers, and we believe that this is the reason.

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