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This slide shows operating income by business segment.
The polygonal line shows the operating income at the consolidation level, which is calculated by adding up the operating margin of all the business segments and subtracting the eliminations or unallocated cost at the corporate level. On a side-note, the eliminations or adjustment at the corporate level ranges from approximately ¥8.0 billion to ¥9.0 billion a year.Next, I would like to comment on the individual business segments.
The profit contribution by the Amusement segment is increasing. Although net sales have not changed substantially, we are putting our best efforts in reducing cost by changing the cost structure.
Upon the release of a hit game machine, profit is made. Thus, we shall release these hits on a constant basis. As many manufacturers are withdrawing from the industry at a far higher rate than the slowing down of the market in the amusement area, we have a chance for success.Publication segment’s profit has gradually decreased from the peak marked in the fiscal year ended March 31, 2010, and continues to wane for the fiscal year ending March 31, 2013. After FULL METAL ALCHEMIST’s phenomenal success, we have been constantly releasing hit titles such as KUROHITSUJI, SOULD EATER, and INU x BOKU SS. In order to release a definite hit title, we have expanded the number of monthly magazine and anime air, through which fixed cost is incurred. This is a structural issue that we have not found revenue upside potential yet, and therefore experience increasingly lower profit margin.
Previously, Digital Entertainment segment has been segregated into 3 segments: Game, Online, and Mobile Content. Due to the changing business model, the separation of those segments did not appear correct and as such, we have combined them into one business segment. However, as it would be too difficult to determine the composition within the Digital Entertainment segment, we are providing supplemental information for a better understanding of the current business condition. Please note, however, that the breakdown within the Digital Entertainment segment would be difficult to be classified in the same manner going forward due to the changing business environment. Again, the supplementary information is provided for a clearer perspective on the company’s business condition, strategic direction, risk factors, and upsides, etc.
