Square Enix 2005 Annual Report Download - page 20

Download and view the complete annual report

Please find page 20 of the 2005 Square Enix annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 64

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64

18 SQUARE ENIX CO., LTD.
(Asia and Others)
Years ended March 31 Millions of yen
2004 2005 Change
¥972 ¥1,179 ¥207
In Asia and other regions, we established 100% subsidiary
SQUARE ENIX (China) CO., LTD., as our base of operations
in China and Asia, and are working to strengthen our oper-
ating capability. Accordingly, we will plan to dissolve our
current subsidiary in China, SQUARE ENIX WEBSTAR NET-
WORK TECHNOLOGY (BEIJING) CO., LTD., as of December
2005. Until the dissolution of this subsidiary, we will transfer
our online games, such as Crossgate, to the new firm and
continue operations.
Sales in Asia and Others increased ¥207 million, to
¥1,179 million.
4. Strategic Outlook, Issues Facing
Management and Future Direction
It is management’s main task to grow the Company in the
medium and long term, maintaining profitability with the
creation of advanced, high-quality content.
As the development and popularization of information
technology (IT) and network environments are rapidly
advancing, new digital entertainment will transform the
industry structure in the near future; customer needs for
network-compliant entertainment will increase; and multi-
functional terminals will enable users easy access to various
types of content. It is the Group’s medium- and long-term
strategy to respond to such changes and to open a new era
of digital entertainment.
In such a period of transformation, the Group will con-
tinue to deal with such strategic tasks as an appropriate
management of network communities, the deployment
of “Polymorphic Content” based on diversified methods
of expression and the formation of new platforms for
various content.
The Company has announced its fiscal 2006 targets
as below.
Years ended March 31 Millions of yen
2004 2005 2006
Results Results Targets
Net sales ¥63,202 ¥73,864 ¥90,000
Operating income 19,398 26,438 27,000
Ordinary income 18,248 25,901 27,000
Net income 10,993 14,932 15,500
The Company perceives that the realization of growth while
maintaining profitability is a fundamental management task.
We set the target operation profit ratio at a range between
25% and 30% (JPNGAAP) as we sustain the investments
necessary for growth. While maintaining our profit target
level on an overall basis, we have planned up-front invest-
ment for the expansion of our network-related businesses
overseas, and the releasing of new titles.
5. Dividend Policy
It is one of the Company’s most important management
policies to return profit to our shareholders. We will reserve
retained earnings as we take priority over investments for
effective purposes for future growth of corporate value,
such as the enhancement and expansion of existing busi-
ness operations, capital investments for new business
development and merger and acquisition (M&A) activities.
Regarding returning profit to shareholders as important,
retained earnings are also to be expended for dividends, and
we will maintain continuous and stable dividend payouts.