Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 12, 2014 We would now like to begin the Financial Results Briefing Session of SQUARE ENIX HOLDINGS (the “Company”) for the fiscal year ended March 31, 2014 (the “FY2014/3”). Today’s presenters are: Yosuke Matsuda President and Representative Director and Kazuharu Watanabe 1 Chief Financial Officer. First, Matsuda will give a summary overview of the Company’s financial results for the FY2014/3 , and then explain the Company’s business strategy. Statements made in this document with respect to SQUARE ENIX HOLDINGS CO., LTD. and its consolidated subsidiaries' (together, “SQUARE ENIX GROUP") plans, estimates, strategies and beliefs are forward-looking statements about the future performance of SQUARE ENIX GROUP. These statements are based on management's assumptions and beliefs in light of information available to it at the time these material were drafted and, therefore, the reader should not place undue reliance on them. Also, the reader should not assume that statements made in this document will remain accurate or operative at a later time. A number of factors could cause actual results to be materially different from and worse than those discussed in forward-looking statements. Such factors include, but not limited to: 1. changes in economic conditions affecting our operations; 2. fluctuations in currency exchange rates, particularly with respect to the value of the Japanese yen, the U.S. dollar and the Euro; 3. SQUARE ENIX GROUP’s ability to continue to win acceptance of our products and services, which are offered in highly competitive markets characterized by the continuous introduction of new products and services, rapid developments in technology, and subjective and changing consumer preferences; 4. SQUARE ENIX GROUP’s ability to expand international success with a focus on our businesses; and 5. regulatory developments and changes and our ability to respond and adapt to those changes. The forward-looking statements regarding earnings contained in these materials were valid at the time these materials were drafted. SQUARE ENIX GROUP assumes no obligation to update or revise any forward-looking statements, including forecasts or projections, whether as a result of new information, subsequent events or otherwise. The financial information presented in this document is prepared according to generally accepted accounting principles in Japan. 2 Good afternoon. I'm Yosuke Matsuda. I would like to explain the outline of the Company's financial results for the FY2014/3 , as well as our future business strategy. Financial Results I will use the Earnings Briefings for my explanation. Fiscal Year Ended March 31, 2014 3 1/15 The plans, forecasts, strategies and ideas described in this material are descriptions of forecasts of future results. These descriptions rely on information available as of the date of production of this material and are based on assumptions and judgment made by the Company’s management. Readers are advised not to rely solely on these forecasts. Readers should also not assume that these forecasts are accurate or valid information, even after the date of public release. There are many factors that may cause actual results to vary considerably from the forecasts, and in some cases actual results may be inferior to forecasts. The information on the future forecasts described in this material is current as of May 12, 2014. The company is not obliged to update or correct forecasts concerning the Company’s future results, including forecasts or outlook, if new information becomes available and/or events occur after May 12, 2014. Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 12, 2014 Financial Results: For the FY2014/3, the Company recorded net sales of Fiscal Year Ended March 31, 2014 ¥155,023 million, operating income of ¥10,543 million, (Billions of Yen) Fiscal Year Fiscal Year recurring income of ¥12,534 million and net income of ¥6,598 Ended 3/13 % Ended 3/14 % % Change Net Sales 148.0 100% 155.0 100% 5% million. Operating Income (6.1) － 10.5 7% － Recurring Income (4.4) － 12.5 8% － These results are identical to the revised Consolidated Net Income (13.7) － 6.6 4% － Results Forecast announced on May 9. Fiscal Year Ended 3/13 Fiscal Year Ended 3/14 Change Depreciation and Amortization 7.3 6.6 (0.7) Capital Expenditure 12.5 5.4 (7.1) Number of Employees 3,782 3,581 (201) While our product lineup places a large emphasis on the 4 second half of the FY2014/3, we have been successful in revising a part of our business as well as our assets since last year to push our operating income range above the forecast of ¥5 billion to ¥9 billion. Financial Results by Business Segment: Please take a look at the business segment information on Fiscal Year Ended March 31, 2014 pages 19 and 20 of the Earnings Briefing. 1. Results for the Fiscal Year ended March 31, 2014 (Billions of Yen) Digital Eliminations Amusement Publication Merchandising Total Entertainment or unallocated Net Sales 94.6 47.0 10.2 3.8 (0.5) 155.0 Net sales and operating income of each business segment Operating Income 10.7 4.5 2.3 1.1 (8.1) 10.5 Operating Margin 11.3% 9.6% 22.4% 29.4% - 6.8% are as follows; 2. Results for the Fiscal Year ended March 31, 2013 (Billions of Yen) Digital Eliminations Amusement Publication Merchandising Total Entertainment or unallocated The Digital Entertainment of ¥94,571 million and ¥10,709 Net Sales 89.5 44.3 11.1 3.3 (0.1) 148.0 Operating Income 0 (0.4) 2.5 0.7 (8.9) (6.1) Operating Margin 0.0% (0.8%) 22.4% 20.4% - (4.1%) million, the Amusement of ¥46,952 million and ¥4,517 million, 3. Changes (1-2) (Billions of Yen) Digital Eliminations Amusement Publication Merchandising Total the Publication of ¥10,228 million and ¥2,293 million, and the Entertainment or unallocated Net Sales 5.1 2.7 (0.9) 0.5 (0.4) 7.0 Operating Income 10.7 4.9 (0.2) 0.4 0.8 16.6 Merchandising of ¥3,786 million and ¥1,115 million, 5 respectively. Excluding the Elimination or Unallocated Adjustments, consolidated net sales were ¥155,023 million and operating income was ¥10,543 million. The Digital Entertainment segment is comprised of three major areas: HD games, MMOs, and games for smart devices and PC browser. The global launch of the MMO "FINAL FANTASY XIV" in August, 2013 has been a great success. The game has been highly-esteemed, and the game operation and addition of the PS4 version this April have been favorable. As for games for smart devices and PC browser, following the release in South Korea, "Kaku-San-Sei Million Arthur" was also released in mainland China and Taiwan, and became successful during the first half of the FY2014/3. 2/15 The plans, forecasts, strategies and ideas described in this material are descriptions of forecasts of future results. These descriptions rely on information available as of the date of production of this material and are based on assumptions and judgment made by the Company’s management. Readers are advised not to rely solely on these forecasts. Readers should also not assume that these forecasts are accurate or valid information, even after the date of public release. There are many factors that may cause actual results to vary considerably from the forecasts, and in some cases actual results may be inferior to forecasts. The information on the future forecasts described in this material is current as of May 12, 2014. The company is not obliged to update or correct forecasts concerning the Company’s future results, including forecasts or outlook, if new information becomes available and/or events occur after May 12, 2014. Outline of Results Briefing by SQUARE ENIX HOLDINGS held on May 12, 2014 "DRAGON QUEST MONSTERS SUPER LIGHT" became an instant hit during the second half of the FY2014/3 and some other games launched during this period such as "DEADMAN'S CROSS" also had a steady success. In light of the rising popularity of the native application market, the Company has been focusing more on games for smart devices, to achieve a steady and constant level of success since the latter half of the FY2014/3. Finally, for HD games in Europe and North America, in the first quarter of FY2014/13 adjustments were made to the carrying values of the content production account relating to the prior fiscal year FY2013/2 resulting in an extraordinary loss for the Loss Evaluation of Content which was booked in the first quarter of FY2014/3. These studios have adjusted their development strategy to a new business model advocating a concept of “PC First”, which they are fully committed to and currently in mid development. We aggressively pursued a review on assets at the studios in Europe and North America during FY2014/3. Meanwhile, shipments of the blockbuster title "THIEF," which went on sale in February, 2014, were higher than expected, mainly for the PS4 and Xbox One. Sales of "FINAL FANTASY X/X-2 HD Remaster" were favorable and significantly contributed to our profit recovery. As a result, the Digital Entertainment segment recorded sales of ¥94.5 billion and an operating income of ¥10.7 billion. The Amusement segment remained strong overall. Existing store sales compared to last year remained steady at amusement facilities and although the recent rise in the consumption tax had somewhat of an effect on consumer trends, downtown area stores were especially well off and we shall maintain the momentum in this fiscal year ending March 31, 2015 (“FY2015/3”) FY2015/3 as well.