Redeploying Management Resources Groupwide without Exceptions

Our latest structural reform initiative will target the entire SEGA SAMMY Group without any exceptions. Accordingly, in May 2014 we established the Group Structure Reform Division. As my position gives me a view across the Group, I serve as the division's general manager, and I have communicated my commitment to structural reform to all Group companies. We will rapidly implement measures that we can take quickly, such as strengthening fi xed cost control. However, until the end of March 2015 we will carefully analyze measures for large-scale Groupwide structural reform and report on concrete measures in a timely manner. Here, I would like to explain the reform's thrust as I see it at this juncture.

As a comprehensive entertainment corporate group, the SEGA SAMMY Group has abundant management resources at its disposal. We have more than 3,000 developmental personnel. Also, intellectual properties are an important management resource. Not only SEGA and Sammy but also such Group companies as TMS ENTERTAINMENT, LTD., have intellectual properties with huge potential. In addition, as a group engaged in creating hit products, the cash generation capabilities of the Pachislot and Pachinko Machine Business segment and fi nancial stability are valuable assets. Particularly in the online game content market, these management resources are a competitive advantage because they enable us to implement strategies on a grander scale.

However, such management resources are not necessarily always arrayed appropriately to match market trends. To give an example, further management resource redeployment is needed in the digital game area. Therefore, I have set out analyzing the growth potential of each business area of the Group, optimizing the deployment of management resources, and thereby heightening asset efficiency as important structural reform tasks.