Square Enix 2011 Annual Report Download - page 6

To Our Shareholders
the aforementioned difference. These losses were recorded as
we decided to refocus our attention on fewer, stronger titles.
While the balance of the content production account
increased from ¥16.0 billion to ¥19.9 billion, the composition is
changing dramatically as we pursue global development. At
present, already more than 40% is recorded at development
studios outside Japan (Figure1).
Including taxes of ¥2.0 billion yields a total of about 90% of
the difference explained above.
While I regret concerns that may have been caused by our
swing to a loss during the fiscal year ended March 31, 2011,
the real nature of the loss is as described above. Finally, the vast
majority of the decline in total assets was due to goodwill and
the planned payback of capital for corporate bond redemptions,
while extraordinary loss items were related to valuations and did
not materially impact capital flows. As a result, our cash
balances have not fallen (Figure 2).
Financial treatment is important, however, in the end this is
accounting for the past. It goes without saying that our business
and how we energize our vital human resources are more
important. In addition to reorganization and a review of the
chain of command, we also improved our internal communication
methods from those based on a hierarchical organization to a
system in which management can communicate directly with
all employees as a tool for conveying Group vision as well as
business directives. Moreover, in order to promote the active
and honest exchange of views among employees, we have
begun holding workshops on various topics and information
exchange events. I believe that the transformation of our
Group’s culture is our most critical issue and the fastest road
to success.
New Signs
While fundamentally changing Group culture is not an easy task,
we have already started to see some teams leading the way
with good results. At the E3 game show held in June 2011, the
quality of our various titles earned extremely high praise (Figure 3).
With enhancing brand value a top priority for the Group, these
are certainly very encouraging examples.
In addition, we are starting to see the fruits of our labor in
the creation of new genres. Our browser game launched in
August 2010 called “SENGOKU IXA” has already grown to
become a significant earnings generator. In addition, several of
our social game releases have also achieved success in the
market. Using the feedback we are receiving in these new
genres, we are further strengthening our development
capabilities.
Content Production Account by Region
(Billions of yen)
Japan Europe/North America
20.0
15.0
10.0
5.0
0
2004 2005 2006 2007 2008 2009 2010 2011
10.1
15.5
7.3
11.9
14.8
18.4
16.0
19.9
5.9
10.1
9.2
10.7
Years ended March 31
Figure 1 Comparison of Total Assets Figure 2 E3 Expo, U.S. (June 2011)
Future Titles Earn Wide Acclaim
Figure 3
Total assets
¥270.5 billion
Total assets
¥206.3 billion
As of March 31, 2010 As of March 31, 2011
Cash and
deposits
(111.2)
Current portion of
corporate bonds
(37.0)
Corporate bonds
(35.0)
Corporate bonds
(35.0)
Other liabilities
(44.2)
Other liabilities
(36.2)
Total net
assets
(154.3)
Total net
assets
(135.1)
Accounts receivable
(30.7)
Other assets
(83.4)
Other assets
(79.7)
Investment securities
(35.0)
Goodwill
(10.2)
Accounts
receivable
(15.5)
Cash and
deposits
(111.1)
(Announced June 30, 2011)
(Due: December 2011 Japan; January 2012 N. America; Early 2012 Europe)
“FINAL FANTASY XIIIɅ2”
1 Award, 12 Nominations
“TOMB RAIDER”
21 Awards, 68 Nominations
Best Action Game (IGN), etc.
(Due: Autumn 2012)
“HITMAN ABSOLUTION”
19 Awards, 50 Nominations
Best of Show (GameSpot), etc.
(Due: 2012)
(Due: August 2011 N. America/Europe; September 2011 Japan)
“DEUS EX: HUMAN REVOLUTION”
4 Awards, 19 Nominations
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