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- A Message from the CEO [Intellectual Property Strategy]
Creating competitive intellectual properties continuously is important if we are to win out in the immediate competitive conditions and develop over the long term. In particular, we intend to step up our creation of competitive intellectual properties in the digital game content area, where intensified competition has been separating the wheat from the chaff in the past several years. Through these efforts, we aim to ensure that the Pachislot and Pachinko Machine Business segment remains among the winners. To this end, in fiscal 2014 we plan to increase spending on R&D and content production by 20% year on year. Furthermore, from a Groupwide perspective, we plan to strengthen development capabilities efficiently by deploying human resources to growth areas and highly profitable areas.
For intellectual properties, creation is only the first stage. They do not generate value unless used effectively and reared into major assets. In terms of ability to create unrivaled intellectual properties ahead of the times, SEGA is the industry's leader. Looking back, the company has created a long list of intellectual properties that have instigated new market trends, such as Sonic the Hedgehog and Phantasy Star.Continuously fostering intellectual properties is our task. However, as several examples of successes in the digital game content business show, we are overcoming this task steadily. SEGA has many world-class intellectual properties. We intend to make maximum use of them and heighten their value. Furthermore, we plan to call for vigorously promoting the use of intellectual properties laterally within the Group.
By enabling the continuous creation of competitive intellectual properties, the SEGA SAMMY Group's cash flow generation capabilities and stable financial foundations centered on the Pachislot and Pachinko Machine Business segment will continue to be major advantages. Developing rich content, for which demand is growing in the digital game content area, is causing development cost to trend upward. In addition, such content calls for graphics-related technology and experience and expertise in refining narratives. Thus, at this point, conditions are ideal for us to leverage the management resources we have accumulated. In addition, as the specifications for pachinko and pachislot machines advance year by year, corresponding amounts of capital are needed to develop machines that earn market endorsement. In a market where only strong companies survive, the SEGA SAMMY Group will move forward decisively to ensure it remains in the winners' circle.
It is people who create intellectual properties, and moreover, people who exploit them. Accordingly, we will work hard to establish an environment in which we can make maximum use of the capabilities of personnel, our most important management resource.