In 1H FY2017/3, the Company booked net sales of ¥106.3 billion (+¥20bn YoY), operating income of ¥11.1 billion (-¥1.5 billion), and ordinary income of ¥8.4 billion (-¥4.5 billion). The decline at the ordinary line was ¥3 billion sharper than that at the operating line primarily because of foreign currency exchange losses. The Company posted net income of ¥5.5 billion (-¥1.8 bllion).
I will next break our results down by segment. 1H FY2017/3 saw net sales rise but operating income decline, in large part due to the Digital Entertainment segment. Net sales rose sharply YoY at the Digital Entertainment segment thanks to the overseas launches of such major titles as “DEUS EX: Mankind Divided,” the PlayStation®4 version of “Rise of the Tomb Raider,” and “HITMAN,” as well to stronger sales of games for smart devices. “MOBIUS FINAL FANTASY,” “HOSHI NO DRAGON QUEST,” “FINAL FANTASY BRAVE EXVIUS,” “Grimms Notes,” and other smart device titles released in FY2016/3 have contributed to sales growth since the beginning of FY2017/3. 1H FY2016/3 had seen the release of more than one million MMO expansion packs, the lack of which in 1H FY2017/3 was one factor behind the decline in operating income. Net sales and operating income declined YoY at the Amusement segment. Same-store arcade sales were strong, YoY sales was more than 100%. This and the launch of such arcade machine titles as “Gun Slinger Stratos 3,” “DRAGON QUEST MONSTERS BATTLE SCANNER,” and “THEATRHYTHM FINAL FANTASY All-Star Carnival” resulted in sales growth, but operating income declined due to the early recognition of depreciation and amortization charges associated with some game machines. Both net sales and operating income declined YoY at the Publication segment as 1H FY2017/3 marked a lull between releases of animated television series. Net sales rose YoY at the Merchandising segment thanks to brisk sales of merchandise featuring characters appearing in our own titles as well as those we have licensed in. This concludes my overview of our 1H FY2017/3 results.