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Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 13, 2020

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Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 13, 2020

SQUARE ENIX HOLDINGS CO., LTD.
FY2020/3 Financial Results Briefing Session Q&A

Date/Time: May 13, 2020 (Wed) 7:00-8:10 p.m. (JST)
Main Speaker: Yosuke Matsuda, President and Representative Director


Q&A

Q: If you were to release your major HD game titles on schedule and exclude any downside factors to earnings from the coronavirus, would you still find it difficult to achieve operating income of ¥40 billion or more in FY2021/3?

A: While we will strive for operating income of ¥40 billion or more in FY2021/3, it is difficult at present to arrive at a quantitative estimate of the impact the coronavirus is likely to have on our business. As such, we intend to release earnings guidance when such assessments become feasible.

Q: Other than increasing the percentage of digital sales, do you have any initiatives in mind for improving the profitability of the HD Game sub-segment?

A: Everything comes down to the quality of our games. We are going to work hard to ensure we develop high-quality games that our customers can enjoy over a long period of time.

Q: How satisfied are you with initially having sold 3.5 million units of “FINAL FANTASY VII REMAKE?” Do you have any plans to offer it on additional platforms?

A: We are pleased that we were able to top 3.5 million units given that we chose to produce and ship fewer physical disks due to the impact that we foresaw from the coronavirus outbreak. Disk sales were lower than we had initially anticipated, but growth in digital sales increased their percentage of the whole, which we expect to lead to a better gross margin. We will refrain from commenting on the possibility of offering the title on additional platforms for now.

Q: Could you share the breakdown of the ¥7.9 billion write-downs on inventory assets?

A: Of the ¥7.9 billion, ¥7.5 billion were write-downs on the content production account. Of those, ¥5.7 billion were on the HD Game sub-segment and the remainder on Games for Smart Devices/PC Browsers sub-segment and others.

Q: E3 was cancelled for 2020, but do you have any plans to host events of your own around the same time to unveil new titles?

A: Our Group will not be live streaming its own event because the coronavirus pandemic will prevent us from assembling all the visual assets from the various studios and titles. We intend to unveil new titles going forward on an individual basis at the appropriate timing.

Q: Do you have any initiatives planned to grow additional sales of “FINAL FANTASY VII REMAKE?”

A: Capturing new players is key. I will refrain from going into the details, but we have plans for initiatives to capture players throughout the year, so please keep an eye on our progress. I also note that we will not engage in any marketing strategy that relies solely on pricing.


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