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A Message from the CEO

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By picking up the pace of reform and pursuing ambitious initiatives,we will shape the future of the SEGA SAMMY Group and entertainment.HAJIME SATOMI Chairman of the Board and Chief Executive Officer SEGA SAMMY HOLDINGS INC.

Medium-Term Growth Scenario

Paving the Way toward Operating Income of ¥100 Billion

Looking ahead to the period after we are back on a growth track, our targets are the same as before. We aim to raise operating income above the ¥100 billion mark, the level it was at immediately after management integration. Moreover, our roadmap for reaching this target is unchanged. In other words, we envision the Pachislot and Pachinko Machine Business segment stably generating earnings of around ¥70 billion, while SEGA earns about ¥20 billion by strengthening the profitability of existing businesses and growing earnings in the digital game content business, and other subsidiaries contribute earnings of approximately ¥10 billion.

Rather than solely pursuing short-term results, we will always keep our medium-term growth scenario in mind and take appropriate steps accordingly.

Focused on adding the No. 1 share of the pachinko machine market to its No.1 share of the pachislot machine market, the Pachislot and Pachinko Machine Business segment will continue strengthening its development system and further refining marketing. However, our goal is not simply to increase earnings in the pachinko machine market, which offers considerable scope for market share expansion. We also aim to build a business structure that can generate earnings stably even amid cyclical peaks and troughs in pachinko and pachislot machine sales, which stem from player preferences and pachinko halls' financial positions. The balanced portfolio that our initiatives have established has been steadily realizing its true value in recent years.

In Japan, amusement centers continue to face tough market conditions because consumer spending is slumping. Stimulating the market is SEGA's responsibility as a market leader as well as a task the company must tackle to grow earnings continuously. Accordingly, we are proposing business models that mitigate amusement center operators' initial investment burden and widen our player base. In fiscal 2014, we are considering introducing the industry's first free-to-play business model. Also, with a view to broadening its player base, the Amusement Center Operations segment plans to open next-generation amusement centers and amusement centers based on new business formats over the medium term. For example, in partnership with BBC Worldwide Limited, SEGA unveiled the world's first nature-themed museum, Orbi Yokohama, in August 2013. By providing entertainment that grandparents, parents, and children can enjoy, we will capture familyrelated demand. Looking further ahead, we plan to package the museum as a successful model and license it out worldwide. Providing entertainment that three generations can enjoy is a goal not only of the Amusement Center Operations segment but one that SEGA as a whole is pursuing. In light of declining birth rates, we will provide entertainment that, in addition to young adults, appeals to grandparents and their grandchildren. Through this approach, we aim to unearth new customer groups and grow.

Medium-Term Growth Scenario

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THE MANAGEMENT TEAM

  • A Message from the CEO SEGA SAMMY HOLDINGS INC.HAJIME SATOMI
    • Fiscal 2013 Business Results Report
    • General Evaluation
    • Strengthening the Foundations of the Digital Game Business
    • Fiscal 2014 Plan
    • Medium-Term Growth Scenario
    • SEGA SAMMY Group Going Forward
    • Intellectual Property Strategy
    • Capital Policy
    • Conclusion
  • Interview with the COO SEGA CORPORATION NAOYA TSURUMI
  • Interview with the COO Sammy Corporation SHIGERU AOKI

PAST, PRESENT, AND THE FUTURE

PRESENT

  • Wellspring of Ideas: Personnel
  • Turning Ideas into Entertainment Value
  • Opinion from an Outside Director

FUTURE

  • Special Feature 1 Casinos and the SEGA SAMMY Group
  • Special Feature 2 Delivering Quality Games to Even More Customers