Square Enix 2006 Annual Report Download - page 23

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S e c u r in g H u m a n R e s o u r c e s t o E x e c u t e t h e
G r o u p ’s G r o w t h S t r a t e g ie s C o n c e n t r a t in g
o n C r e a t io n o f N e w C o n t e n t S e r v ic e s a n d
B u s in e s s D e v e lo p m e n t O v e r s e a s
The Group has been making rapid growth in expanding its business
operations globally. Delay in developing human resources may
adversely affect the Group’s business performance.
E x p a n s io n in t h e G r o u p ’s In t e r n a t io n a l
B u s in e s s O p e r a t io n s
In the Games (Offline), Games (Online) and Mobile Phone Content
business segments, the Group is pursuing expansion of its inter-
national business operations. A variety of factors present in the
countries and regions in which the Group operates overseas may
affect the Group’s business performance. Such factors include
market trends, political situations, economic climates, law and legal
factors, cultural factors, religious factors, customs and other factors.
F lu c t u a t io n o f E xc h a n g e R a t e s
The Group includes consolidated subsidiaries located in North
America, Europe and Asia. The risks of foreign exchange loss have
been reduced as foreign currency gained by subsidiaries is expended
for settlement or reinvestment in each country. However, sales,
expenses and assets of the overseas subsidiaries are converted into
Japanese yen amounts in the consolidated financial statements.
Consequently, the exchange rate may affect the Group’s financial
results as it fluctuates beyond our forecast.
E n t e r t a in m e n t In d u s t r y L a w s
The operation of game centers is subject to government control
under the Law for Proper Control of Entertainment and Amusement
Business and other related laws and regulations. These laws and
regulations include an approval and licensing system for the open-
ing and operation of amusement centers, regulations on business
hours (ordinances vary, but operation is generally prohibited from
midnight to 10 a.m.), age restrictions (ordinances vary, but the
admittance of persons under 16 years old after 6 p.m. and persons
under 18 years old after 10 p.m. is generally prohibited), area
restrictions on outlet opening, and regulations concerning facility
structure, interior, lighting and noise. While complying with the
laws, the Group has actively pursued the establishment of new
centers. However, if regulations were to change owing to the
establishment of new laws or other reasons, the Group’s business
performance may be affected.
M a n a g e m e n t o f P e r s o n a l In f o r m a t io n
In conjunction with the enactment of the Personal Information
Protection Law, the Group has bolstered employee training with
the aim of increasing awareness about the handling of personal
information. The Group has also improved the timeliness of its per-
sonal information management systems and identified all personal
information obtained by the Group. The Group has undertaken a
full range of measures to strengthen its internal control systems,
including ongoing improvements to technology controlling access
to its customer database and to its data security system, restrictions
on personnel permitted to access information and establishment of
a system to deal with customer inquiries regarding personal infor-
mation. To this point, no leakage of personal information has
occurred from the Group. The Group intends to maintain its strin-
gent management systems for personal information by reviewing
current systems and enhancing employee training. However, if a
leak of personal information were to occur from the Group, the
Group’s business performance may be affected.
A c c id e n t s a n d D is a s t e r s
The Group periodically carries out accident prevention checks,
facility checks and emergency drills to minimize accidents and the
impacts of disasters, including terrorist attacks, infectious diseases,
food poisoning, fires, electrical blackouts, computer system/server
malfunctions, earthquakes, and typhoon and flood damage. How-
ever, in the event of accidents or disasters it may not be possible
to avoid or alleviate all adverse impacts. If a major earthquake or
disaster occurs, which could impede the continuation of business,
the Group’s business performance may be affected.
L it ig a t io n
The Group is being managed strictly in compliance with laws and
regulations and with full respect for third parties’ rights while
carrying out its operations. However, in the course of its business
activities in Japan and abroad the risk of the Group becoming the
defendant of litigation cannot be discounted. If such litigation were
to occur, the Group’s business performance may be affected.