Square Enix 2005 Annual Report Download - page 9

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The application layer is where our core capability
resides. We have the property rights to a variety of
games,
anime
and
manga
enjoyed by fans all over
the world, backed by skilled personnel who continue
to produce high-caliber content.
In the user service layer, our experience in the operation
of online games is a source of competitiveness. The
knowledge and skills to operate online games can be
acquired only through actual operation, and as such it
is very difficult to catch up if you are behind.
We are aware that we also have a weakness, which
lies in our corporate culture and how we succeeded
in the past. We excelled selling top-quality packaged
software. Our emphasis on perfection, however, could
have appeared to some as arrogance, particularly when
dealing with the supporting role of customers’ activities.
In this new era, it is important to change our mindset so
that our relationship with customers is content, and the
quality of content is something we improve over time
working with customers.
Grasping the shift of value-added in the industry is
critical to be competitive. This is exactly why the most
recent merger and acquisition (M&A) and alliance activities
are based on economies of scope rather than scale.
M&A and alliance activities that have happened to
date have been relatively predictable, but we need
to pick up speed to respond to a rising trend toward
attempting to ride out structural changes by relying
on huge amounts of capital.
The new society will require new values and social
codes. We realize the important role lying squarely on
our shoulders and continue to uphold our obligations
to society.
Fiscal 2004 was a year of building stamina for
SQUARE ENIX. Fiscal 2005 and 2006 will see the
Company enhance its structure. The merger between
SQUARE and ENIX was a significant milestone in the
structural change within the game industry. Going
forward, I expect more alliances with companies
outside of the game industry will happen.
We appreciate your unwavering support.
July 2005
Yoichi Wada
President and Representative Director
7
Annual Report 2005