SAMMY HOLDINGS DISCUSSION POINTS 2019

The SEGA SAMMY Group endeavors to reflect the viewpoints of diverse stakeholders in management strategy by providing the Group’s management team with feedback on the various requests and opinions received from shareholders, investors, and other stake- holders. DISCUSSION POINTS 2019 summarizes the SEGA SAMMY Group’s challenges and initiatives as well as other key information excerpted from INTEGRATED REPORT 2019. Overview of the SEGA SAMMY Group’s Businesses

Created through the management integration of Sammy and SEGA, the SEGA SAMMY Group is a comprehensive entertainment corporate group that provides entertainment across a wide range of fields. These include pachislot and machines, game content for digital games, packaged games and other games, amusement machine sales, amusement center operations, animation and toys, and resorts.

Pachislot and Pachinko Entertainment Machines Business Contents Business

The mainstays of this business are industry-leading pachis- This business segment has businesses in a broad spec- lot machines and a lineup of pachinko machines that we are trum of fields, such as digital games and packaged making ever-more competitive. Boasting one of the indus- games as well as amusement machine sales, amuse- try’s largest development systems, we are developing ment center operations, and animation and toys. appealing new pachislot and pachinko machines that will invigorate the industry as we realize our “Always Proactive, Always Pioneering” company credo.

WHOareYOU? Designed & © 2018 Worlds Apart Ltd. All Rights Reserved. Ryu ga Gotoku ONLINE ©SEGA

Pachislot DISC UP Ikebukuro GiGO ©Sammy ©SEGA ENTERTAINMENT 5th version: White panels Co., Ltd.

Detective Conan The Fist of Blue Sapphire ©2019 GOSHO AOYAMA/ DETECTIVE CONAN Pachinko CR Shin Hokuto Muso Chapter 2 COMMITTEE ©Buronson & Tetsuo Hara/NSP 1983, All Rights Reserved. Approved No. KOK-115 © 2010-2013 Koei Tecmo Games Co., Ltd. ©Sammy Team Sonic Racing ©SEGA

Resort Business

The Resort Business operates an integrated resort and a resort complex. We are taking a variety of measures with a view to accumulating know-how, ©PARADISE SEGASAMMY Co., Ltd. All rights reserved. heightening our profile, and ultimately participating in the integrated resort business in Japan. For example, we are assigning personnel to South Korea’s first integrated resort, PARADISE CITY, operated through an associate accounted for by the equity method. Also, we operate Phoenix Seagaia Resort, one of Japan’s premier resort complexes.

©Phoenix Resort

1 SEGA SAMMY HOLDINGS Performance Trends

Regulatory revision has affected the Pachislot and Pachinko Machines Business, once the mainstay of operating income. In the Entertainment Contents Business, which we have strived to enhance, operating income has grown over the past three fiscal years.

Operating Income (Losses) by Segment since Management Integration*1 Billions of yen / %

160 20.4%

120 105.0

80

3.9%

40 13.0

0

–40 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19

Pachislot and Pachinko Machines Business Entertainment Contents Business Resort Business Other businesses Head office costs, etc. Operating income margin (FY)

R&D Expenses, Content Production Expenses*3 / Net Sales*2 R&D Expenses to Net Sales Ratio Billions of yen Billions of yen / %

20.1 19.2 18.4 18.3 396.7 395.5 384.6 378.0 16.7 366.8 366.9 15.7 347.9 67.6 321.4 323.6 331.6 14.1 67.1 66.6 13.5 62.0 59.2 58.0 53.3 10.8 10.4 45.2 41.5 41.1

’’10 ’’11 ’’12 ’’13 ’14 ’15 ’16 ’17 ’18 ’’19 ’’1010 ’’1111 ’’12 ’’13 ’’14 ’’15 ’’16 ’17 ’18 ’’19 (FY) R&D expenses, content production expenses R&D expenses to net sales ratio (FY)

Profit (Loss) Attributable to Owners of Parent*3 Cash Flows Billions of yen Billions of yen

41.5 87.6 75.2 59.1 33.4 54.9 58.1 54.3 30.7 47.3 27.6 38.0 36.6 37.0 26.4 21.8 24.9 20.2 18.6 16.9 14.8 6.0

–0.7 6.3 –4.7 8.9 –7.6 –7.2 5.3 –20.9 –18.3 –20.4 –22.1 2.6 –29.5 –38.5 –37.7 –35.2

–59.0

–11.3 ’’1010 ’’1111 ’’1212 ’’13 ’’14 ’15 ’16 ’17 ’18 ’’1919 ’’1010 ’’1111 ’’1212 ’’1313 ’’1414 ’’1515 ’’1616 ’17’17 ’18’18 ’’1919 (FY) Net cash provided by operating activities (FY) Net cash provided by (used in) investing activities Free cash flows *1 In fiscal 2015, the Company changed its business segmentation. For the fiscal year ended March 2014 and before, the figures for the Entertainment Contents Business have been calculated by aggregating the results of the consumer business, the amusement machine sales business, and the amusement center operations business. *2 As recognition of net sales was changed (1) from a net basis to a gross basis and (2) from a shipment basis to a delivery basis in fiscal 2016, figures for fiscal 2015 reflect these changes retrospectively. *3 The Company has adopted the “Revised Accounting Standard for Business Combinations” (Accounting Standards Board of Japan (ASBJ) Statement No. 21, issued on September 13, 2013) and has presented “net income (loss)” as “profit (loss) attributable to owners of parent” from fiscal 2016.

DISCUSSION POINTS 2019 2 Market Conditions

Market Conditions of the Pachislot and Pachinko Machines Business

Market Size and Number今後目指すもの of Pachinko and Pachislot Players

Since the number of players began trending downward after peaking in 1995, the pachinko and pachislot machine market has been in a phase of long-term contraction. Market Size and Number of Pachinko and Pachislot Players Breakdown of Pachinko Players by Age Group (2018) Based on 9.5 million players

17.4017.90 17.10 16.60 17.20 16.70 15.80

10’s 1.6% 14.50 12.60 11.10 11.50 10.70 20’s 30’s 40’s 50’s 60’s 70’s Women 9.70 9.40 9.00 9.50 11.3% 13.1% 17.7% 13.0% 11.4% 5.3% 26.6% 51.5 52.2 51.8 51.8 51.8 51.2 48.7 49.0 46.7 46.5 47.4 48.5 49.0 49.3 50.4 51.2 Men

32.3 33.9 34.8 33.6 30.1 28.8 28.2 25.9 25.4 25.6 25.0 24.5 23.2 20.4 19.5 20.7 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’17 Pachinko and pachislot market (Trillions of yen) Other leisure market (Trillions of yen) (CY) Source: White Paper on Leisure Industry 2019, Japan Productivity Center Number of players (Millions of players) Source: White Paper on Leisure Industry 2019, Japan Productivity Center Numbers of Pachinko Halls and Installed Pachinko Pachinko and Pachislot Machine Installations, Unit Sales and Pachislot Machines per Pachinko Hall and Annual Turnover 1.15 1.19 1.11 1.07 0.94 0.91 0.85 0.84 0.83 0.75 0.71 0.62 0.54 , , 0.45 , 5.82 0.45 0.44 , , , , , 5.47 4.91 , , , , 4.89 4.93 4.49 4.55 , , 4.58 4.51 4.24 4.57 4.58 4.60 4.59 4.57 4.52 4.43 4.30 4.22 4.09 3.87 3.85 3.81 3.45 3.24 2.84 2.43 2.01 1.95 1.86

’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’05 ’06 ’07 ’08 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 (Forecast) ’17 ’18 433 Number of pachinko halls (Halls) (FY) Pachislot & Pachinko machine installations (Millions of units) (FY) Number of installed pachinko and pachislot machines per pachinko hall (Machines) Pachislot & Pachinko machine units sold (Millions of units) Annual turnover rate Source: Police Agency Sources: National Police Agency, Yano Research Institute Ltd. (Figures for fiscal 2019 are the Company’s forecast.) Overview of the Regulatory今後目指すもの Revision Enforced in February 2018

With respect to pachislot machines, Estimate for Reaching 300 Tokens Using Pachislot Machine with AT Function*1 changes in voluntary regulations have Playable in a short period of time Limits on gambling elements 6.25 minutes enabled the development of pachislot No. 6 model*2 Maximum Number machines that can be enjoyed in a shorter number obtained: obtained: period of time. As for pachinko machines, it 300 2,400 has become possible to use new settings No. 5.9 model*3 12.5 minutes Number Maximum (multi-stage payout ratio), meaning that obtained: number 300 obtained: 3,000 *1 One game assumes to be finished in five seconds companies can offer players a wider range *2 No. 6 model assumes inclination value is 4.0 of gameplay. *3 No. 5.9 model assumes inclination value is 2.0 One game 75 games 150 games 1,500 games (Maximum value under voluntary regulations) (Maximum)

Approval Process for今後目指すもの Pachinko and Pachislot Machines

Before launching a machine, manufacturers are required to navigate multiple approval processes in accordance with the Enforcement Regulation of Entertainment Establishments Control Law.

1. Application for prototype testing Security Communications Association 2. Issuance of certification of prototype testing

3. Application for testing Public Safety Commission 4. Issuance of certification of prototype testing in each prefecture

6. Application for approval 5. Contract / delivery Pachislot / Pachinko halls District police station Machine 7. Approval manufacturers 8. Commencement of operations

3 SEGA SAMMY HOLDINGS Market Conditions of the Entertainment Contents Business

Market Environment サミーの強み（開発力）of the Digital and Packaged Games Areas

Year-on-year growth in the packaged games market was limited despite the release of a new game console that emerged as a global hit. PC games, on the other hand, drove market growth on the global expansion of PC game distribution platforms and sales in the games market grew by roughly 20% year on year, contrib- uting to the growth of the game content market as a whole. With the emergence of new platforms and advances in communication environments expanding its player base, the global game market promises to maintain a strong growth rate and expand further.

Game Content Market by World Region Value of Japan’s Home and Online Game Content Markets Billions of yen ¥614.0 billion

Other ¥4,921.9 billion 6% ¥721.1 billion Europe Asia 1,323.51,375.0 1,236.1 21% 1,127.3 2017 45% 999.4 1,038.6 Other 698.3 788.6 ¥5,823.4 billion 494.3 Total 6% 213.0 296.3 364.8 ¥10,896.4 346.6 339.9 billion 303.1 305.4 291.1 238.8 264.2 273.9 280.0 Europe 261.7 230.1 226.9 21% 2018 216.4 175.5 179.7 177.9 155.3 142.1 130.0 117.0 202.3 170.0 162.0 185.0 North America Total Asia ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’20 28% 44% (Estimate) (Forecast) ¥13,177.4 (FY) ¥3,055.5 billion ¥2,820.3 billion Online game content Home video game software (including online games) billion ¥2,305.1 billion Home video game consoles Source: Famitsu Game White Paper 2019

¥3,812.5 billion North America Source: Famitsu Game White Paper 2019 29% Note: Different countries and regions are aggregated in “Other” for 2017 and 2018 (prepared based on information as of June 2019).

Market Environment of the Amusementサミーの強み（開発力） Machine Sales and Amusement Center Operations

Number of Amusement Centers and Amusement Machine Unit Sales / Amusement Machine Installations Revenues from Amusement Center Operations Centers / Machines installed Billions of yen 461,465 446,225 432,351 403,553 6,648 377,825 6,181 362,099 354,463 5,772 349,835 5,439 4,856 4,542 487.5 470.0 4,381 4,193 456.4 422.2 433.8 462.0 485.9

184.8 179.1 175.0 161.1 156.9 157.4 152.9

’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’11 ’12 ’13 ’14 ’15 ’16 ’17 (CY) (FY) Amusement centers Amusement machines installations Amusement machine unit sales Revenues from amusement center operations Source: National Police Agency Source: JAIA, Amusement Industry Survey 2017

Market Conditions of the Resort Business (Integrated Resorts)

Main Points of the Integrated Resort Process for Opening an Integrated Resort Implementation Bill STEP STEP STEP Number of 3 locations nationwide 1 2 3 locations RFP Regional certification Acquisition of Integrated ¥6,000 (public offering and (Minister of Land, gaming license Admission fee (applicable to Japanese citizens and selection) Infrastructure, Transport (Casino Administration resort non-Japanese citizens residing in Japan) (Local government) and Tourism) Committee) opening Up to 3 times in 7-day period and up to 10 Restriction on times in 28-day period (applicable to number of Japanese citizens and non-Japanese admissions citizens residing in Japan) Payments to the 30% of gross gaming revenues government

DISCUSSION POINTS 2019 4 Business Strategy by Segment

Pachislot and Pachinko Machines Business

Measures今後目指すもの for Fiscal Year 2020

Challenges Initiatives

Submit multiple specifications for both pachislot and pachinko machines

Improve approval ratio Develop pachislot machines reflecting market trends Machines with the number of obtainable medals per game set at a higher range, payouts reflecting players’ skill, effective use of major existing IPs, etc.

The pachislot machine market is expected to expand due to a from replacement demand. We will continue introducing titles that concentration of demand in the third quarter of fiscal 2020, when use common machine cabinets manufactured by ZEEG Co. Ltd., our old-format pachislot machines will reach their removal deadlines. joint venture with Universal Entertainment Corporation. Further, we Changes in voluntary regulations have broadened the scope for will roll out new pachislot machine titles that align with market trends gameplay of both pachislot and pachinko machines. by having obtainable medals per game set at a higher range and Our advantage lies in combining a cluster of powerful IP brands payouts reflecting players’ skill. Given that it has become possible with one of the industry’s largest development pipelines and pachislot to develop “high continuation” pachinko machines—which are one and pachinko machine models that enjoy high utilization rates thanks of Sammy’s particular strengths—the Group will proactively market to the innovativeness of our industry-leading development personnel. new-format machines. Capitalizing on this advantage, we will submit pachislot machines with multiple specifications with the aim of improving our approval Sammy’s Strengthsサミーの強み（開発力） (Development Capabilities) rate and ensuring that we capture the sales opportunities arising 433 development Industry-leading scale: personnel (As of March 31, 2019) Sammy’sサミーの強み（ StrengthsIP ）(IP)

Owns multiple well-performing series Number of Series Cumulative Unit Sales* Titles in Series Hokuto no Ken 32 Approx. 2.88 million units ALADDIN 14 Approx. 560,000 units Beast King 15 Approx. 500,000 units SOUTEN-NO-KEN 12 Approx. 470,000 units Hokuto Muso 4 Approx. 160,000 units Eureka 3 Approx. 130,000 units Bakemonogatari/Nisemonogatari 9 Approx. 120,000 units Code Geass 3 Approx. 60,000 units

Company Company Company Company Company Company Company Sammy Company * Including spec changes version H G F E D C B A

Priority Measure:今後目指すもの Improvement of Profit Margin In fiscal 2020, the Pachislot and Pachinko Machines Business is taking a variety of measures that are steadily improving the profit margin.

Key Measures Results Key Measures Results

Increase percentage of Designed products with reusability in mind Establishment and Toward the unification of platform, launched machines reusable components Increased number of reusable components launch of ZEEG using ZEEG-made cabinets from the previous fiscal year

Implement brand Integrated into Sammy brands Increased percentage of common components to 88% for strategy Promote commonaliza- pachislot machines and 52% for pachinko machines Shortened development period tion of components Proceeded with commonalization of components Improve development (initial targets not reached due to regulation revisions) between pachislot and pachinko machines efficiency Enhanced review process, narrowed down number of titles to develop Enhanced cost management utilizing cost indicators Reduce common Reduce costs Made significant reductions to fixed expenses Reduced costs by transferring outsourced debugging work fixed expenses to insourced work and careful selection of exclusive items

Steady progress in improvement of profit margin

5 SEGA SAMMY HOLDINGS Entertainment Contents Business

Measuresサミーの強み（開発力） for Fiscal Year 2020

Challenges Initiatives

Improve profitability by rightsizing the number of titles under Insufficient hits in the digital games area development and in operation Invest resources in promising areas such as overseas packaged games

In the digital games area, we will improve profitability through right- sizing. Meanwhile, the SEGA SAMMY Group is revising its priority Existing IP areas to strengthen its focus on the overseas online and packaged game markets centered on North America and Europe, which not only are large markets that promise growth but also enable the Group to leverage its advantages. We will concentrate management resources on areas of particular competence while fully utilizing four Four New IP External IP IP categories: existing, revived, external, and new IP. In the packaged IP Strategies games area, we will increase and enhance our IP lineup by acquiring studios and will take measures to improve the product quality of respective IP titles. At the same time, we will forge ahead with the rollout of a wide range of titles that covers all devices, regions, Revived IP and platforms.

サミーの強み（開発力）SEGA’s Strengths Reconsideringサミーの強み（開発力） Focus Areas

Focus resources in areas where we can leverage Has abundant IP assets our strengths within strong overseas markets

Titles Cumulative Unit Sales / Downloads Road to 2020 at Time of Announcement Europe and series Approx. 920 million (Units / DL*1) Japan Asia Domestic studio North Amercia

Puyo Puyo series Approx. 29.0 million (Units / DL*1/ ID) Package CS and PC digital New series Approx. 3.8 million (Units) Mobile digital European and North American studios Ryu ga Gotoku series Approx. 12.0 million (Units) Package

2 series Approx. 5.50 million users* CS and PC digital Mobile digital series Approx. 19.0 million (Units / DL*1)

Megami Tensei series Approx. 17.4 million (Units / DL*1) From Fiscal 2020 Onward series Approx. 10.2 million (Units / DL) Europe and Japan Asia Domestic studio North America Total War™ series More than 27.6 million (Units / DL) Package CS and PC digital series More than 20.0 million (Units / DL) Mobile digital *1 Including downloads of free-to-play titles European and North American studios *2 Total for 2 Package CS and PC digital Mobile digital

DISCUSSION POINTS 2019 6 Operating Data

Pachislot and Pachinko Machine Unit Sales Market Share of Pachislot and Pachislot and Thousands of units Pachinko Machines 343 332 % 30.9 Pachinko Machines 360 200 24.3 23.9 Business 241 21.7 216

199 138 16.8 14.8 12.8 302 300 301 11.8 15.3 12.0 14.7 140 159 14.1 9.0 207 215 11.6 202 9.8 10.5 9.9 162 8.7 142

85 67

’’10 ’’11 ’’12 ’’13 ’’14 ’’15 ’’16 ’’17 ’’18 ’’19 ’’1010 ’’1111 ’’1212 ’’1313 ’’1414 ’’1515 ’’16 ’’17 ’’18 Pachislot machines Pachinko machines Pachislot machine unit sales (FY) (Settlement dates Pachinko machine unit sales Source: Yano Research Institute Ltd. from July to June)

Entertainment Contents Business

Home Video Game Unit Sales (Cumulative) Digital Games Area Sales / Number of Domestic Amusement Thousands of units Number of Titles Distributed Centers*1 / Existing Domestic Amusement 23,440 Billions of yen / Titles Center Sales YoY*2

4,090 Centers / % 47.3 108.5 45.6 103.1 101.9 104.0 99.3 100.5 100.1 17,330 40.8 91.7 38.5 93.8 96.1 260 249 241 236 8,130 12,280 35 198 198 194 191 189 190 10,280 19,350 9,220 27 5,830 23 23 2,640 5,240

9,200 6,450 6,580 5,040

’15 ’16 ’17 ’18 ’19 ’’16 ’’17 ’’18 ’’19 ’’10 ’’11 ’’12 ’’13 ’’14 ’’15 ’’16 ’’17 ’’18 ’’19 ’15 ’16 ’17 ’18 ’19 New title Repeat title (FY) Sales Number of titles distributed (FY) Number of domestic amusement centers (FYE / FY) Existing domestic amusement center sales YoY *1 The establishment of SEGA ENTERTAINMENT Co., Ltd., integrated the Group’s amusement center operations. As a result, the aggregate calculation method for the number of amusement centers has changed as of fiscal year 2014. *2 As a result of the abovementioned integration, the amusement centers classified as existing amusement centers have changed as of fiscal year 2014.

PHOENIX RESORT: Number of Facility PARADISE CITY: Number of Casino

Users (Cumulative) 812 Users (Cumulative) 295 Thousands Thousands

597 607 561 Resort Business 537 182

583

58 57 48

0 0 ’’15 ’’16 ’’1717 ’’18 ’’19 ’’15 ’’16 ’’1717 ’’18 ’’19 (FY) (FY)

7 SEGA SAMMY HOLDINGS Themes of ESG and SDGs Initiatives

The SEGA SAMMY Group has identified important tasks with reference to ESG (environmental, social, and governance) factors and the Sustainable Development Goals (SDGs). We are heighten- ing awareness of and tackling these tasks on a Groupwide basis. With continuing to create moving experiences and continuing to provide moving experiences as its mission and overriding theme, the Group will enhance corporate value by simultaneously creat- ing economic and social value.

Themes of ESG and SDGs Initiatives

Human Resources and Organizational Capital Enhancement of Job Satisfaction and Diversity RelatedSDGs Activity SDGs and Elimination of Inequality Viewing human capital as one of our advantages, we are focusing on job satisfaction and diversity enhancement. For example, we have consolidated head office functions to reform work styles and create employee-friendly workplaces.

Products and Services Customers Society Countermeasures to Addiction RelatedSDGs Activity SDGs We understand that we have a responsibility to take measures to tackle and prevent addiction. The types of addiction associated with our businesses include gaming disorder, which is an addiction to video games that seriously affects health; addiction to playing pachinko and pachislot machines; and gambling addiction, which is strongly related to the integrated resort business.

Products and Services Customers Society Environmental Preservation and RelatedSDGs Activity SDGs Reduction of Environmental Burden The SEGA SAMMY Group designs products, recycles materials, and reuses components with a view to lowering the environmental burden of manufacturing processes and enhancing efficiency. Further, we are advancing efforts to preserve the environment and reduce power consumption.

Products and Services Customers Society Response to Japan’s Super Low Birth Rate and Aging Society RelatedSDGs Activity SDGs We are moving forward with measures that heighten corporate value by using entertainment in catering to the needs of Japan’s super low birth rate and aging society. These efforts focus on two areas: improving children’s education by making learning fun and enhancing the well-being of senior citizens by enabling them to develop their interests and enhance social lives as well as to maintain and improve their capabilities.

Corporate Governance RelatedSDGs Activity SDGs Corporate governance and compliance are important to us. Therefore, we design systems and conduct flexible business management with a view to bolstering the supervision of various types of operational implementation and strengthening operational implementation.

DISCUSSION POINTS 2019 8 Corporate Governance

As a result of an increase in the number of external directors on June 21, 2019, the Company has ten directors, four of whom are external directors and three of whom are independent directors, as well as four Audit and Supervisory Board members, two of whom are outside Audit and Supervisory Board members and independent directors. At the various meetings that they attend, external directors and outside Audit and Supervisory Board members provide guidance and advice based on their abundant experience and highly specialized knowledge. (Composition of external directors: 40%)

市場環境：自主規制の変更Careers of External Directors Reason市場環境：自主規制の変更 for Appointment of External Directors

panies Kohei Katsukawa Melanie Brock om , e c tc IT . Corporate manager Corporate manager (Financial institutions) (International business) To reflect Mr. Katsukawa’s wealth of experience Ms. Brock is the Company’s first female director and and extensive expertise in the financial field in the also the first non-Japanese director. Her appointment titution ns s Retai l i l Company’s business management reflects her wealth of experience and extensive ia c ­expertise as an international business leader. It also n a

n underpins the Company’s commitment to business i External F management built on diverse philosophies and values. directors Takeshi Natsuno Hiroshi Onishi Corporate manager (IT companies, etc.) Corporate manager (Retail) To reflect Mr. Natsuno’s wealth of experience as a To reflect Mr. Onishi’s wealth of experience and business executive and extensive expertise in the extensive expertise in the retail and department I n s t s information communications field in the store industry in the Company’s business e e rn n a si Company’s business management management tio nal b u

市場環境：自主規制の変更Compensation of Directors

Compensation of directors and Audit and Supervisory Board members for fiscal year 2019 is as follows.

Directors / Audit and Supervisory Total compensation Total compensation by type Position Board members (Millions of yen) (Millions of yen) Basic compensation Bonus Stock options Directors Internal 5 651 483 155 13 External 4 44 44 — — Audit and Internal 1 18 18 — — Supervisory Board members External 2 20 20 — —

The compensation paid to directors who received ¥100 million or more in consolidated compensation for fiscal year 2019 is as follows.

Total consolidated compensation, Total consolidated compensation by type Name Position Company etc. (Millions of yen) (Millions of yen) Basic compensation Bonus Stock options Director 380 The Company 276 100 4 Haruki Satomi Director 160 The Company 105 36 4 Except the Company 14 — —

Revision市場環境：自主規制の変更 of Directors’ Compensation Amounts

The Company implemented an overall revision of the Fixed Compensation Bonuses for Directors system for the compensation of directors with the aim of ensuring transparency and increasing incentives to Base Compensation focus business management on corporate value Fixed monthly compensation Fixed Compensation enhancement. At the same time, the Company introduced a stock Responsibility-Related Compensation compensation plan with restriction of transfer to facili- Paid to those with the responsibilities tate convergence between the long-term interests of of a representative director directors and shareholders. Further, the plan will moti- Total score for the level of ordinary income, vate directors to pursue corporate value enhancement Role-Related Compensation the degree of business plan achievement, and the degree of year-on-year growth based on longer-term viewpoints and to take maximum Paid to those with the role of CEO, COO, or CFO advantage of their talents in such efforts.

9 SEGA SAMMY HOLDINGS Shareholder Value

We will meet shareholders’ expectations by Net Assets per Share (BPS) / heightening shareholder value through the Ratio of Cash Dividends to Net Assets (DOE) Yen provision of stable returns to shareholders 1,409.27 1,336.54 1,313.90 and the steady implementation of growth 1,304.44 1,257.43 1,313.06 1,289.32 1,093.23 1,167.59 937.8 strategies. 3.9% 3.3% 3.5% 3.2% 3.1% 3.1% 3.0% 3.1% 2.9% 2.9% Returning Profits to Shareholders— Policy, Results, and Outlook While directly returning profits to shareholders through ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 stable cash dividends, we will retain the option of acquir- ’ ’ ’ ’ ’ ’ ’ ’ ’ ’ ing treasury stock in response to share price levels. Net assets per share (BPS) Ratio of cash dividends to net assets (DOE) (FYE/FY) Meanwhile, we will increase shareholder value continu- ously while taking care to balance strategic investment Cash Dividends per Share / Consolidated Dividend Payout Ratio to win out against competitors in growth areas and to Yen secure internal reserves needed for a further integrated resort business. 355.0% In fiscal year 2019, we paid cash dividends of ¥40.00 per share. As a result, the ratio of cash dividends to net 40 40 40 40 40 40 40 40 40 assets (DOE) was 3.1%. 30 174.7% In fiscal year 2020, we plan to pay interim cash divi- dends of ¥20.00 per share and year-end cash dividends 105.0% 37.3% 46.1% of ¥20.00 per share, giving full-year cash dividends of 24.5% 29.2% 31.6% ¥40.00 per share. This is the same level as in fiscal year 34.0% ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 2019. We have been conducting a shareholder incentive ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 program since fiscal year 2018. Cash dividends per share Consolidated dividend payout ratio (FY) Note: Consolidated dividend payout ratio is not applicable in fiscal year 2015 because the Group recorded a net loss in that fiscal year.

Acquisition of Shares of Treasury Stock

(FY) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

14 million 5 million 10 million 10 million — — — — — — — — — shares shares shares shares

Comparison of Stock Price and Stock Price Index (TOPIX) (Comparison based on monthly closing prices and value of 1 for October 2004 management integration)

September 2005 Fiscal year 2006 Implements 2-for-1 Posts record earnings stock split Structural Reform Structural Reform

Assumes businesses of Index Corporation ()

Enhances initiatives in new business areas, such as digital games area, integrated resorts (which include casinos), and resorts

Records operating External factor income of ¥68.7 billion December 2016 Enforcement of IR Promotion Bill Fiscal year 2007 October 2004 Records 35.8% Management year-on-year decrease integration in operating income

External factor May 2017 External factor February 2019 End of interim measures Announcement of External factor External factor Change in prototype-testing Downward revision period for revision of Intensification of debate about Road to 2020 Revision of regulations Fiscal year 2008 operation methods of Security announcement regulations pertaining to integrated resorts in Japan pertaining to Entertainment Incurs operating loss Communications Association Establishments Control Law Entertainment Establishments Control Law 2004.10 2005.3 2006.3 2007.3 2008.3 2009.3 2010.3 2011.3 2012.3 2013.3 2014.3 2015.3 2016.3 2017.3 2018.3 2019.3

TOPIX Share price

DISCUSSION POINTS 2019 10 SEGA SAMMY HOLDINGS INC. Sumitomo Fudosan Osaki Garden Tower, 1-1-1 Nishi-Shinagawa, Shinagawa-ku, Tokyo 141-0033, Japan www.segasammy.co.jp/english/

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