In 1H FY2016/3, the Company booked net sales of ¥86.4 billion (+¥13.2 billion YoY), operating income of ¥12.6 billion (+¥4.1 billion), recurring income of ¥12.9 billion (+¥3.9 billion), and net income of ¥7.3 billion (+¥1.6 billion). The growth in net sales and net income was accompanied by improvement in the operating margin, which rose 3 percentage points YoY to 15%.
I will next break our results down by segment. At the Digital Entertainment segment, net sales were ¥60.2 billion (+¥16.4 billion YoY), operating income was ¥43.8 billion (+¥5 billion), and the operating margin was 21.5% (+3.4 percentage points). The Digital Entertainment segment comprises three sub-segments: HD Games, MMO, and Games for Smart Devices/PC Browsers. The MMO and Smart Devices/PC Browsers sub-segments drove earnings in 1H due to a lack of major releases in the HD Game sub-segment. The MMO sub-segment saw solid subscription revenue thanks to the 1Q release of expansion packs for DRAGON QUEST X and FINAL FANTASY XIV. In the Games for Smart Devices/PC Browser sub-segment, 1H was the first time that SCHOOLGIRL STRIKERS, Kai-ri-Sei Million Arthur, and FINAL FANTASY RECORD KEEPER contributed for the full period, and the new game MOBIUS FINAL FANTASY has been performing well since its June launch. The Amusement segment saw declines in both net sales and net income. The declines owed to the lack of sales of an arcade machine on par with last year’s PUZZLE & DRAGONS BATTLE TOURNAMENT. Earnings from our amusement outlets remained solid thanks to efficient management practices. Net sales and net income were also down at the Publication segment because no new comic titles took the place of those that had sold well last year boosted by adaptations into animated TV series. The Merchandising segment delivered strong earnings thanks to sales of character merchandise associated with the release of the FINAL FANTASY XIV expansion pack.