Investor Relations

Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 14, 2012

Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 14, 2012
(Continued from previous page.)*

We have considered the inclusion of PDLC in all projects from about a year and a half ago but it is not structured to be a key revenue factor. Our efforts are not enough if creators consider it just as a ‘free gift.’ The trend is similar to the multi-play feature for hand-held game machines in the past, which was implemented in almost every game but no hits came about due to the notion that the feature was an added bonus. Although many people even felt negative about the multi-play, games such as MONSTER HUNTER has conversely, enjoyed success – this cycle is common in the entertainment industry. Now, HD games are experiencing a similar phenomenon. Game publishers are used to the traditional package business model and the new concept of PDLC is being regarded as a kind of supplemental content. It is likely that creators who could breakout from this spell would be the next star in the industry. We too, are currently transforming rapidly. We have thoroughly assessed the changes in business direction from about 2 years ago, and starting next year or the year after, we feel that we could provide the results. Due to disc price increasingly lessening, revenue would also lessen accordingly if the same business model is used. As there is also a limit to the amount of time a customer has and fewer titles played as a result, fierce competition awaits.
It is essential to maintain strong and continuous relationship with customers and a change in the revenue model is crucial.

On the slide, the term Social Gaming and Others is used. This signifies whether a game is based on social elements, or whether a game is designed to provide players with unique experiences by connecting with each other within the game, instead of whether it being mobile or not.

Good results have shown within this area. We began planning from about 2 years ago and results were shown from the last half of the fiscal year just ended. Positive results are continuously showing in the current fiscal year as well and we expect further growth in this area.
We believe that diversification is the key in this area as customers will get bored easily if provided with similar game designs or mechanisms when playing the game. As such, we operate by having about 7 different organizations.
We consider it a chance and also a challenge that our North America and European operations require some catch-up in this area. Beginning this fiscal year onwards, we are aiming for an upside on revenue from the development teams in the North America and European regions.