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Fiscal Year 2008 First Half Results Presentation November 14, 2008

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Stock Code: 7552 Happinet Corporation Fiscal Year 2008 First Half Results Presentation November 14, 2008 0 Table of Contents ◆ Overview of Each Business ・・・・・・・・・・・ 2P - Toy Business ・・・・・・・・・・・・・・・・・・・ 3P~ 6P - Video-Related Business ・・・・・・・・・・・・・ 7P~10P - Video Game Business ・・・・・・・・・・・・・・ 11P~14P - Amusement Business ・・・・・・・・・・・・・・ 15P~17P ◆ Full Year Projections for FY2008 ・・・・・・・・ 18P ◆ Next Generation Mission-Critical System・・・・ 19P 1 OverviewOverview ofof EachEach BusinessBusiness KazuhikoKazuhiko NoteNote PresidentPresident andand COOCOO 2 ToyToy BusinessBusiness 3 Toy Business (1) <Results in the first half> Bar chart: Net sales Line graph: Operating profit [Review of 1st half] Unit: Billion yen Character goods of units of superheroes 28.0280 24.9 performed well. Sales fell slightly year on 26.0260 year, partly because of the weak sales of 23.4 1.0 24.0240 the Company’s original goods. 0.8 The Company struggled to achieve profits. 22.0220 0.91 0.6 [Initiatives in 2nd half] 20.0200 0.4 ・ Establish appropriate stock levels in the 18.0180 market and Company 0.2 16.0160 0.35 ・ Preserve credits thoroughly 14.0140 ・ Bolster the sale of Bandai’s major 12.0120 products ・ 2008年3月期Interim period 2009年3月期1st half Rebuild an original goods development system 中間（※）of FY2007* 第2四半期累計of FY2008 Boosting sales in the year-end and New Year shopping season, paying attention to trends in the market. In accordance with change in accounting standards in association with the introduction of the legally defined quarterly results disclosure system, we are announcing results in the first half, starting the current fiscal year. *Figures in the interim period of FY2007 are shown for reference. 4 Toy Business (2) <Featured items in the second half> ©2004-2008 BANDAI, WiZ ©ABC, Toei Animation Tamagotchi plus Color Yes! Pretty Cure 5 GoGo! Cure Fleuret ©2008 ISHINOMORIPRO ・ ©2008 TV ASAHI, TOEI AG・TOEI TV ASAHI, ADK, TOEI ©T.YANASE/ FROEBELLKAN, TMS, NTV Engine Sentai Go-Onger Masked Rider Kiva Go! Anpanman Engine Gattai series 10-12 DX Zambat Sword Hajimeteno Engine Gattai DX Kyoretsu-Oh Pasokon Daisuki 5 Toy Business (3) <Maximum promotion for an original product in 2nd half> [Promotions] TV, radio ・・・・・・・・・ 19 Newspapers ・・・・・・・・・ 7 Magazines ・・・・・・・・・ 33 Websites ・・・・・・・・・ 8 Free papers ・・・・・・・・・ 2 (*As of November 30, planned ads are included.) You will feel like you are saving money just by walking. The greatest media exposure Taxi Walker is a pedometer that translates the number ever for the Company’s original of steps into a taxi fare. goods Launched nationwide on October 31, 2008. The product was developed against a backdrop of increasing diet consciousness, belt-tightening in association with the recent economic trend, and environmental consciousness on the individual level. 6 VideoVideo--RelatedRelated BusinessBusiness 7 Video-Related Business (1) <Results in the first half> Bar chart: Net sales [Review of 1st half] Line graph: Operating profit 20.0 The structural reforms, which had been 200 18.6 Unit: Billion yen 19.0190 underway since the previous fiscal year, produced results. We shifted our focus 18.0180 16.6 from sales to profit and changed our 17.0170 1.0 organizational structure to establish a 16.0160 0.8 division-of-labor system. As a result, 15.0150 0.82 0.6 profit improved significantly. 14.0140 0.4 13.0130 [Initiatives in 2nd half] 0.2 12.0120 0.30 ・ Continue the strategy to emphasize 11.0110 profit 10.0100 ・ Improve results in the next term by 2008年3月期Interim period 2009年3月期1st half acquiring works meeting demand in the of FY2008 market 中間（※）of FY2007* 第2四半期累計 Expecting results of the business structure reform In accordance with change in accounting standards in association with the introduction of the legally defined quarterly results disclosure system, we are announcing results in the first half, starting the current fiscal year. *Figures in the interim period of FY2007 are shown for reference. 8 Video-Related Business (2) <The Company’s exclusive titles performed well, boosting results> ● Shipping quantity of Crows Zero reached about 300,000 copies, a record high. (10,000 copies) 30 Crows Zero II Investment in production and sale of 30 ‘08 sell-through DVDs have been determined 22 Crows Zero 25 Suzuran High School (Shun Oguri) vs. 20 Housen Gakuen High School (Haruma Miura) ‘03 With a new cast, the film is more violent than Crows Zero 20 ‘07 Chicago Hula Girl Hula d 13 ase 15 10 ‘06 ele The Brothers e r 9 Under-world ‘04 Grimm b 00 10 To in 2 5 0 * Shipping quantity is as of the end of September 2008. Only sell-through DVDs are counted. Cheap editions are excluded. © 2007 Hiroshi Takahashi “Crows Zero II” Production Committee © 2007 Hiroshi Takahashi “Crows Zero” Production Committee ● Hito no Sekkusu o Warauna, the first theatrical movie planned by Happinet, is selling. Release date: July 25, 2008 <Reasons of strong sales> Cast: Hiromi Nagasaku, ・ The motion picture rights were acquired Kenichi Matsuyama, Yu Aoi, early in 2005. (The original was written by Naokora Shugo Oshinari, and others Yamazaki, who won the Naoki Award with <Number of copies shipped by the Company> the work.) ・ A wonderful cast, one difficult to put Sell-through 50,000 together today, was enabled through active negotiations, including negotiations Rental 25,000 on the script. ・ Partly because of the cast, the DVD is Total 75,000 supported by women in their 20s and 30s who do not buy DVDs very often.0 As of September 30, 2008 / Unit: copy © 2008 “Hito no Sekkusu o Warauna” Production Committee 9 Video-Related Business (3) <Featured titles in the second half> Foreign OVA Foreign VarietyVariety OVA Film VarietyVariety Oct. 24 Film Dec. 21 Oct. 24 Nov. 28 Dec.Dec. 2121 Nov. 28 Dec. 21 Game COBRA [●REC] Center CX THE ANIMATION DVD-BOX5 The invulnerable man The POV real panic The fifth box of the Cobra with a psychogun movie, which made 1.5 major hit DVD series, a in his left arm is racing million people scream in total of over 250,000 through space again. Spain, will thrill sets of which have been Volume 2 was released Japanese viewers with sold, is going to be in October. Volume 3 the fear. released. will be released in December. (C) 2008 BUICHI TERASAWA/A-GIRL RIGHTS/GUILD PROJECT © 2007 CASTELAO PRODUCTIONS,S.A. (C)2008 Fuji Television/ stylejam TV Foreign TV TV Foreign TV Animation Film Animation Animation Film Animation Jan. 30 Feb. 27 Feb. 27 Jan. 30 Feb. 27 Feb. 27 Battle Spirits TYTANIA Into the Wild Shounen Toppa Bashin A long-awaited TV Sean Penn created the In the elementary animation of Tytania, a movie based on a heart- school that Bashin legendary space opera tugging true story. The attends, a card game following Ginga Eiyu film is among his best called “Battle Spirits,” Densetsu, is going to work. popular globally, is start. catching on. (C) Yoshiki Tanaka, Tytania 26 Partners (C) MMVII by RIVER ROAD ENTERTAINMENT, LLC and PARAMOUNT VANTAGE, (C) Sunrise, Nagoya Broadcasting Network A Division of PARAMOUNT PICTURES CORPORATION. All Rights Reserved. 10 VideoVideo GameGame BusinessBusiness 11 Video Game Business (1) <Results in the first half> Bar chart: Net sales Line graph: Operating profit [Review of 1st half] Unit: Billion yen We catered to all platforms, covering the 24024.0 23.6 1.0 entire market. 20.2 Othe rs 20020.0 0.8 Xbox360 and PSP performed well. 16016.0 0.64 0.6 [Initiatives in 2nd half] Wii ・ 12012.0 Maximize sales of Xbox360 during year- DS 0.4 end and New Year peak season 8.080 0.48 PS 0.2 ・ Strengthen alliances with CVS 4.040 PSP companies in preparation for the release of Dragon Quest IX 0.00 2008年3月期 2009年3月期 ・ Bolster exclusive distribution for Interim period 1st half 中間（※） 四半期累計 midsize manufacturers of FY2007* of FY2008 Improving results, taking advantage of stable business conditions In accordance with change in accounting standards in association with the introduction of the legally defined quarterly results disclosure system, we are announcing results in the first half, starting the current fiscal year. *Figures in the interim period of FY2007 are shown for reference. 12 Video Game Business (2) <Xbox360 and PSP performed well> (C)CAPCOM CO.，LTD. 2007，2008 ALL RIGHTS RESERVED. (C) Kosuke Fujishima (C)2008 NBGI Tales of Vesperia became a Monster Hunter Portable major hit. About 150,000 units 2nd G scored a major hit, were sold in the market. driving sales of the main body. (Source: Famitsu Xbox December 2008 issue) 13 Video Game Business (3) <Featured titles in the second half> Xbox360 • The Last Remnant (Square Enix, to be released on November 20, 2008) SeptemberSeptember 11, 11, 2008 2008 • Star Ocean 4 –THE LAST HOPE– MainMain unit unit prices prices revised revised (Square Enix, to be released on February 19, 2009) PlayStation3, PSP • PS3 White Knight Chronicles –Heartbeat of the Ancients– (Sony Computer Entertainment Japan, to be released on December 25, 2008) • PS3 Ryu Ga Gotoku 3 (Sega, to be released in spring 2009) OctoberOctober 16, 16, 2008 2008 • PS3 Biohazard 5 NewNew PSP PSP mode model llaunc launchehedd (Capcom, to be released on March 12, 2009) Wii, Nintendo DS • NDS Dragon Quest IX: Protectors of the Sky (Square Enix, to be released in March 2009) NovemberNovember 1, 1, 2008 2008 • Wii Music New DSi launched (Nintendo, released on October 16, 2008) New DSi launched • Wii Animal Crossing: City Folk (Nintendo, to be released on November 20, 2008) 14 AmusementAmusement BusinessBusiness 15 Amusement Business (1) <Results in the first half> Bar chart: Net sales Line graph: Operating profit [Review of 1st half] Unit: Billion yen The Company consolidated its four 12.0120 9.3 subsidiaries and started a new 10.0100 system on October 1, 2008.
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