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Outline of Results Briefing held on February 5, 2020

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Outline of Results Briefing held on February 5, 2020

SQUARE ENIX HOLDINGS CO., LTD.
1-3Q FY2020/3 Financial Results Briefing Session (Teleconference) Q&A

Date/Time: February 5, 2020 (Wed); 6:00-7:00 pm (JST)
Main Speaker: Yosuke Matsuda, President and Representative Director


Q&A

Q: How did “DRAGON QUEST WALK” perform in Q3 and what is your outlook like?

A: We do not disclose each app’s sales figures. We hope to maintain a strong performance via the various initiatives we will be implementing going forward.

Q: Could you share your current thinking on the risk of launch delays and impairment losses for the major titles that you have planned for FY2021/3?

A: There is no risk based on launch delays. However, we cannot rule out the risk of impairment losses if we should revise our initial sales forecasts based on the launch schedule of our competitor’s AAA titles.

Q: Do you anticipate more advertising spending for “FINAL FANTASY VII REMAKE” in FY2020/3 or in FY2021/3? Also, what sort of promotional initiatives do you plan to focus on going forward?

A: We anticipate spending more in FY2020/3 because our promotional initiatives will get underway in the Western markets earlier than in other regions. We will work to grow digital sales via a variety of promotional efforts involving social media.

Q: Could you share your thinking on the development of new titles for current- and next-generation game consoles going forward?

A: The next-generation consoles will have backward compatibility, so we plan for the time being to make our new titles available for both current and next-generation consoles. It will therefore be somewhat farther down the road that we release titles exclusively for the next-generation consoles.

Q: Regarding your “DRAGON QUEST WALK” operations, it seems like your operation efforts are not keeping up with player expectations. Any thoughts on that?

A: I appreciate the valuable comment and will share that with our operations team. We have a variety of initiatives lined up and hope that you will keep an eye on the progress we make with them.

Q: How do you plan to use the money you have made thanks to the success of “DRAGON QUEST WALK”? Will you increase the number of your new mobile game titles, or will you develop new HD game titles?

A: We are maintaining our selective approach to deciding what new mobile game titles to release. We look to recoup on more investments starting in FY2021/3, which should add to our cash and deposits. We will consider how to use those funds while paying due consideration to the balance between our investment needs and shareholder return.

Q: Have you seen changes in “DRAGON QUEST X” user numbers as a result of the success of “DRAGON QUEST WALK”?

A: While we have seen some user migration, the impact on “DRAGON QUEST X” has been limited. MMO games tend to lose active users as time goes by, but we have successfully maintained our existing user base for “DRAGON QUEST X” through the release of expansion packs.

Q: Why were your SG&A costs roughly the same as a year earlier despite the lack of any major HD game releases?

A: Our spending went up on some items and down on others, resulting on the whole in the same level of spending as a year earlier.

Q: Will the change in you release date for “FINAL FANTASY VII REMAKE” impact your development or launch timelines for the next installment?

A: No, it will not.


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