Supplementary Financial Document for the 3rd Quarter of the Year Ending March 2008

Transcription

1 Supplementary Financial Document for the 3rd Quarter of the Year Ending March 2008 February 8, 2008 Fields Corporation FIELDS CORPORATION THE GREATEST LEISURE FOR ALL PEOPLE JASDAQ: FIELDS CORPORATION All rights reserved. 1

2 Index 1. Highlights for the 3rd Quarter of the Year Ending March Appendix I 24 for the 3rd Quarter of the Year Ending March Corporate Profile 25 for the 3rd Quarter of the Year Ending March 2008 (NonConsolidated) 6 Our Tracks 26 Segment Information for the 3rd Quarter of the Year Ending March Group Structure Introduction to Fields Group Companies Forecast for the Year Ending March 2008 FullYear Forecast for the Year Ending March 2008 FullYear Forecast for the Year Ending March 2008 (NonConsolidated) Introduction to Fields Group Companies (Continued) Financial Highlights PS Field: Transition in the Number of machines Sold Supplementary Data for the 3rd Quarter of the Year Ending March Appendix II 32 Main Titles of Pachinko/Pachislot Machines Sold for the 3rd Quarter of the Year Ending March 2008 Number of Pachinko Machines Sold According to Manufacturer Number of Pachislot Machines Sold According to Manufacturer Change in the Number of Machines Sold by Brand Change in the Number of Pachinko/Pachislot Machines Sold Main Titles of Pachinko Machines Sold for the of the Year Ending March 2008 Main Titles of Pachinko Machines Sold for the 2nd Half of the Year Ending March 2008 Main Titles of Pachislot Machines Sold for the of the Year Ending March Japanese Leisure Market Income Structure of Pachinko Industry (FY2006) Players in the Pachinko/Pachislot Industry Number of Pachinko Halls and Installed Machines Per Hall Unit Sales and Sales Amount of Pachinko/Pachislot Machines Number of Installed Pachinko/Pachislot Machines and Annual Turnover Rate Market Share by Manufacturers Disclaimer Main Titles of Pachislot Machines Sold for the 2nd Half of the Year Ending March Reference: for the 3rd Quarter of the Year Ending March 2008 by D3 Inc. 21 Game Software Sales Performance by D3 Inc. for the 3rd Quarter of the Year Ending March Titles of Game Software Sold by D3 Inc. (Example) 23 FIELDS CORPORATION All rights reserved. 2

3 (Blank) FIELDS CORPORATION All rights reserved. 3

4 Highlights for the 3rd Quarter of the Year Ending March 2008 FIELDS CORPORATION All rights reserved. 4

5 for the 3rd Quarter of the Year Ending March 2008 (Unit: million) Year Ended March 2007 Year Ending March Q3Q FullYear YOY (1) (%) 1Q3Q YOY (%) FullYear (1) YOY (%) Net sales 47,122 64,144 85,321 64, % 77, % 100, % Gross profit 14,050 19,332 29,248 17, % 21, % 32, % SG&A expenses 9,329 14,635 20,303 9, % 15, % 22, % Operating income Operating income margin 4, % 4, % 8, % 7, % % 5, % 127.5% 10, % (Under preparation) 10.0% Ordinary income 4,980 5,041 9,202 7, % 5, % 10, % Ordinary income margin 10.6% 7.9% 10.8% 11.5 % 7.1% 10.0% Net income 2,225 2,295 3,710 3, % 2, % 4, % Net income margin 4.7% 3.6% 4.3% 4.8 % 2.9% 4.2% (1) Preparation of forecasts for the Fiscal Year Ending March 31, 2008, is under way as of February 5, We will announce our projections as soon as the specific estimated amounts have been determined. FIELDS CORPORATION All rights reserved. 5

6 for the 3rd Quarter of the Year Ending March 2008 (NonConsolidated) (Unit: million) Net sales Year Ended March ,141 1Q3Q 53,173 FullYear 71,314 58,735 YOY (%) (1) % Year Ending March Q3Q 65,335 YOY (%) 122.9% FullYear (1) 80,000 YOY (%) 112.2% Gross profit 12,351 16,307 25,150 15, % 17, % 28, % SG&A expenses 7,373 11,261 16,150 7, % 11, % 16, % Operating income 4,977 5,046 8,999 8, % 6, % 11, % Operating income margin 12.1% 9.5% 12.6% 14.6 % 10.4% 14.4% Ordinary income 5,284 5,411 9,393 8, % 6, % 11, % Ordinary income margin 12.8% 10.2% 13.2% 14.7 % 10.5% 14.5% Net income 2,810 3,050 4,773 2, % 1, % 3, % Net income margin 6.8% 5.7% 6.7% 4.2 % 2.0% 4.6% (1)Fullyear forecast was revised upward on February 5, FIELDS CORPORATION All rights reserved. 6

7 Segment Information for the 3rd Quarter of the Year Ending March 2008 (Unit: million) Net sales Year Ended March Q3Q FullYear Composition (%) Year Ending March Q3Q YOY (%) Composition (%) YOY (%) PS field Game field Other field Subtotal Elimination or incorporation Total 41,144 3,879 2,398 47,422 (300) 47,122 Quarterly segment information is to be disclosed from the year ending March 31, 2008, and therefore is not indicated for prior fiscal years. 71,306 9,946 5,521 86,774 (1,453) 85,321 58,715 4,140 2,144 65,000 (352) 64, % 6.4% 3.3% 100.0% 142.7% 106.7% 89.4% 137.1% 137.2% 65,343 8,851 3,875 78,070 (585) 77, % 11.3 % 5.0 % % Operating income PS field Game field Other field Subtotal Elimination or incorporation Total 5,026 (81) (286) 4, ,720 9, (513) 8, ,944 8,623 (359) (439) 7,824 (1,803) 7, % 4.6% 5.6% 100.0% 171.6% 168.0% 165.7% 6,873 (414) (454) 6,004 (15) 5, % 6.9 % 7.6 % % FIELDS CORPORATION All rights reserved. 7

8 Forecast for the Year Ending March 2008 FIELDS CORPORATION All rights reserved. 8

9 Year Ended March nd Half FullYear Forecast for the Year Ending March 2008 FullYear YOY (%) Revised Forecast for the 2nd Half Year Ending March 2008 (1) YOY (%) Revision to the forecasts made as of Nov 6, 2007 YOY (%) (1) Revised Full Year Forecast Ratio relative to the forecasts made as of Nov 6, 2007 (Unit: million) YOY (%) Net sales 47,122 38,198 85,321 64, % 100, % Gross profit 14,050 15,198 29,248 17, % 32, % SG&A expenses 9,329 10,973 20,303 9, % 22, % Operating income Operating income margin 4, % 4, % 8, % 7, % 165.7% (Under preparation) 10, % 111.8% (Under preparation) Ordinary income 4,980 4,221 9,202 7, % 10, % Ordinary income margin 10.6% 11.1% 10.8% 11.5% 10.0% Net income 2,225 1,484 3,710 3, % 4, % Net income margin 4.7% 3.9% 4.3% 4.8% 4.2% (1) Preparation of forecasts for the Fiscal Year Ending March 31, 2008, is under way as of February 5, We will announce our projections as soon as the specific estimated amounts have been determined. FIELDS CORPORATION All rights reserved. 9

10 Year Ended March 2007 FullYear Forecast for the Year Ending March 2008 (NonConsolidated) 2nd Half FullYear YOY (%) Revised Forecast for the 2nd Half Year Ending March 2008 Revision to the forecasts made as of Nov 6, 2007 (1) (1) YOY (%) YOY (%) Revised Full Year Forecast Ratio relative to the forecasts made as of Nov 6, 2007 (Unit: million) YOY (%) Net sales 41,141 30,173 71,314 58, % 21, % 80, % 80, % 112.2% Gross profit 12,351 12,799 25,150 15, % 12, % 25, % 28, % 111.3% SG&A expenses 7,373 8,776 16,150 7, % 9, % 16, % 16, % 102.2% Operating income 4,977 4,022 8,999 8, % 2, % 9, % 11, % 127.8% Operating income margin 12.1% 13.3% 12.6% 14.6% 13.8% 11.8% 14.4% Ordinary income 5,284 4,109 9,393 8, % 2, % 9, % 11, % 123.5% Ordinary income margin 12.8% 13.6% 13.2% 14.7% 13.8% 11.9% 14.5% Net income 2,810 1,962 4,773 2, % 1, % 2, % 3, % 77.5% Net income margin 6.8% 6.5% 6.7% 4.2% 5.8% 3.5% 4.6% (1) Fullyear forecast was revised upward on February 5, 2008 FIELDS CORPORATION All rights reserved. 10

11 Supplementary Data for 3rd Quarter of the Year Ending March 2008 FIELDS CORPORATION All rights reserved. 11

12 PS Field Release Manufacturer Main Titles of Pachinko/Pachislot Machines Sold for the 3rd Quarter of the Year Ending March 2008 Title Pachinko machines 1Q Bisty CR LOONEY TUNES BIA 2Q Sammy CR Sakura Taisen 3Q Bisty CR The Mask of Zorro Bisty CRA Felix the Cat Bisty CR Tomb Raider Others Total number of Pachinko machines sold for the nine months ended December 31, 2007 Machines Sold (3) 30,503 81,266 (Unit: Machines) Cumulative Machines Sold (1) (1) (2) 41,488 Pachislot machines 1Q Bisty Morning Musume Rodeo Devil May Cry 3 2Q Bisty Neon Genesis Evangelion Magokoro wo Kimini Olympia Kaiketsu Harimau Rodeo Cream Stew Rodeo The Mask of Zorro 3Q Bisty Beach Club Rodeo Virtua Fighter Others Total number of Pachislot machines sold for the nine months ended December 31, ,125 95,893 14, ,982 48,723 99,066 10,039 Total number of Pachinko/Pachislot machines sold for the nine months ended December 31, ,248 (1) Regarding the titles of Pachinko/Pachislot machines for which the number of machines sold was less than 10,000, the number of machines sold was not released. (2) The figures for Cumulative machines Sold were as of January 31, (3) CR Sakura Taisen was released in September 2007, therefore most of its sales will be recorded in the 3rd quarter. FIELDS CORPORATION All rights reserved. 12

13 PS Field Number of Pachinko Machines Sold According to Manufacturer (Unit: Machines) Year Ended March 2007 Year Ending March Q 1Q3Q FullYear 3Q YOY(%) 1Q3Q YOY(%) Sammy 4,664 26,249 30,913 36,893 5,640 35, % 41, % Bisty 111,253 12, , ,905 23,480 4, % 27, % Olympia 1,540 1,255 1,255 Others 7,354 3,631 10,985 14,485 8,210 2, % 10, % Total 123,271 42, , ,823 38,585 42, % 81, % FIELDS CORPORATION All rights reserved. 13

14 PS Field Number of Pachislot Machines Sold According to Manufacturer (Unit: Machines) Year Ended March 2007 Year Ending March Q 1Q3Q FullYear 3Q YOY(%) 1Q3Q YOY(%) Rodeo ブランBisty 24,485 41,495 5,110 23,508 29,595 65,003 42,818 73,714 59, ,274 8,757 7, % 30.3% ド58.8% 68, , % 172.9% Olympia 36, ,021 43,389 6, % 6, % Others 3, ,641 5,503 2,622 1, % 4, % Total 106,536 29, , , ,503 17, , % FIELDS CORPORATION All rights reserved. 14

15 PS Field Change in the Number of Machines Sold by Brand (Unit: Machines) 600,000 Sammy Group SANKYO Group Olympia Other manufacturers (1) (1) 500, ,044 25,407 3, ,321 40,381 6, ,247 19,988 44, , , , ,813 49, ,937 51,617 1,252 10, , , , ,248 15,051 7, , , , , , ,612 79, ,578 0 Year Ended March 2003 Year Ended March 2004 Year Ended March 2005 Year Ended March 2006 Year Ended March 2007 Year Ending March Q (1) Olympia Co., Ltd., was included in Other manufacturers in and before the year ended March 2006, therefore there is a difference between the figures announced in the past for said company and those presented here. FIELDS CORPORATION All rights reserved. 15

16 PS Field Change in the Number of Pachinko/Pachislot Machines Sold (Unit: Machines) 600, ,000 Pachislot machines Pachinko machines 474, , , , , , , , , , ,813 78, , ,248 81, , , , , , , ,982 0 Year Ended March 2003 Year Ended March 2004 Year Ended March 2005 Year Ended March 2006 Year Ended March 2007 Year Ending March Q FIELDS CORPORATION All rights reserved. 16

17 PS Field 1Q Titles Main Titles of Pachinko Machines Sold for the of the Year Ending March Q Titles (As of September 30, 2007) Released in May 2007 CR LOONEY TUNES BIA The new machine features characters from the movie LOONEY TUNES BACK IN ACTION. Displayed in nine partitions and eight lines. Dynamic inmachine moving devices enhance LCD movements. TM& Warner Bros.Entertainment Inc. (s07) Produced under license by Cross Media International,LLC Released in September 2007 CR Sakura Taisen This machine employs contents from the popular game software series, Sakura Taisen (Sakura Wars), from SEGA CORPORATION. Recreates the spectacular actions of a navy ensign and six young maidens. SEGA RED Sammy FIELDS CORPORATION All rights reserved. 17

18 PS Field 3Q Main Titles of Pachinko Machines Sold for the 2nd Half of the Year Ending March 2008 Titles 4Q Titles (As of February 5, 2008) Released in October 2007 Released in November 2007 CR The Mask of Zorro This machine s theme incorporates elements from the spectacular film, The Mask of Zorro. Recreates the exciting action of a hero fighting for the common people through stunning videos. CRA Felix the Cat 1998 TriStar Pictures,Inc, All Rights Reserved Zorro Productions,Inc. All Rights Reserved. Features Felix the Cat, a classic American cartoon character. Adopts a new system that combines the features of both Wingtype and 7type machines. TM& FELIX THE CAT PRODUCTIONS,INC. Released in January 2008 CR Neon Genesis EvangelionThe Angels Are Back Again The latest product of the Evangelion Series Employing a new body (the Eva frame ) modeled on the Evangelion EVA01 Test Type. A new body with an innovative form that recreates the world of Evangelion. GAINAX カラー /Project Eva. Bisty Released in December 2007 CR Tomb Raider Features content from the Tomb Raider, which was turned into the Tomb Raider action video game software and films. Recreates the tough struggle of the beautiful treasure hunter, Lara Croft, who is searching for a new hidden treasure Paramount Pictures Corp. All Rights Reserved. Lara Croft and Tomb Raider are trademarks of Eidos Interactive Limited. Eidos and the Eidos logo are trademarks of the Eidos Group of Companies. All rights reserved. FIELDS CORPORATION All rights reserved. 18

19 PS Field Main Titles of Pachislot Machines Sold for the of the Year Ending March 2008 Titles Titles (As of September 30, 2007) 1Q New regulation machine 2Q New regulation machine Released in June 2007 Released in June 2007 Morning Musume The characters featured in the new machine are former members of the Japanese pop group Morning Musume, who participate actively in diverse fields since having left the group. Their actions to protect the peace of the universe are depicted through the combination of the LCD and a gigantic shutter. Devil May Cry 3 UPFRONT AGENCY/FIELDS The new machine features content from the Devil May Cry 3 video game software for family developed by Capcom Co., Ltd. With Capcom s full cooperation, amazing quality and beautiful images were realized. CAPCOM CO.,LTD.2005 ALL RIGHTS RESERVED./ILLUSTRATIONS:Kazuma Kaneko/ATLUS Sammy RODEO Released in July 2007 Released in July 2007 Released in September 2007 Released in September 2007 Neon Genesis Evangelion Magokoro wo Kimini This new pachislot machine features content from the incredibly popular animated series, Neon Genesis Evangelion. Featuring a gigantic shutter, synchronized with images from the LCD screen, the machine conveys the magnificent world of the original animated series. Kaiketsu Harimau This new pachislot machine features content from the serial TV drama Kaiketsu Harimau. The activities of the hero Harimau and his friends are recreated in the new machine in a comical fashion, using the show s exaggerated cartoon characters. Cream Stew This machine s theme incorporates the popular comedy duo Cream Stew. This machine features various image patterns linked to its different buttons and the Emergency Mode to heighten your anticipation of hitting the jackpot. The Mask of Zorro This machine s theme incorporates elements from the spectacular film, The Mask of Zorro. The story shows how young Alejandro is transformed from an outlaw into the strong and compassionate fighter and receives the mantle from the first Zorro. GAINAX カラー /Project Eva. 宣弘企画 くりぃむしちゅー Sammy RODEO 1998 TriStar Pictures,Inc, All Rights Reserved Zorro Productions,Inc. All Rights Reserved. Sammy RODEO FIELDS CORPORATION All rights reserved. 19

20 PS Field 3Q Released in November 2007 Beach Club Virtua Fighter Main Titles of Pachislot Machines Sold for the 2nd Half of the Year Ending March 2008 Titles New regulation machines Features content from the CR Fever Beach Club series of pachinko machines by Sankyo Co., Ltd. Delivers simple and easytounderstand game content using four functions to signify hitting the jackpot. Adopts the contents of the popular fighting video game, Virtua Fighter. Sega fully collaborated in providing the detailed and realistic graphic renderings to recreate the showdown. 4Q Released in February 2008 Titles Tenka Muteki! Salaryman Kintaro (As of February 5, 2008) New regulation machines Incorporates elements from comic book writer Hiroshi Motomiya s Salaryman Kintaro. Recreates the story of how the main character Kintaro aggressively overcomes many difficulties to protect his family and company. 本宮ひろ志 / 集英社 /FIELDS Sammy RODEO Released in December 2007 SEGA Sammy RODEO FIELDS CORPORATION All rights reserved. 20

21 Game Field Reference: for the 3rd Quarter of the Year Ending March 2008 by D3 Inc (Unit: million) Year Ended March 2007 Year Ending March Q3Q FullYear YOY (%) 1Q3Q YOY (%) FullYear Forecast YOY (%) Net sales 3,787 7,600 9,784 3, % 8, % 15, % Gross profit 1,215 2,318 3,151 1, % 2, % 5, % SG&A expenses 1,092 2,042 2,608 1, % 2, % 4, % Operating income (306) (329) 1, % Operating income margin 3.3% 3.6% 5.5% 7.7% 3.8% 8.0% Ordinary income (350) (464) 1, % Ordinary income margin 3.5% 4.4% 6.1% 8.8% 5.4% 6.8% Net income (84) (348) (706) % Net income margin 2.2% 0.3% 1.5% 8.8% 8.2% 3.8% FIELDS CORPORATION All rights reserved. 21

22 Game Field Game Software Sales Performance by D3 Inc. for the 3rd Quarter of the Year Ending March 2008 Year Ended March 2007 Full Year Lowprice Software (SIMPLE series) 3Q of the Year Ending March 2008 Highend software Total (Unit: Thousand) Year Ending March 2008 Full Year Forecast Progress(%) Japan 1, ,020 1, North America 2,002 1,780 1,780 2, Europe Total 4, ,613 3,288 5, (Unit: Thousand) BestSelling Titles Platform Sales area Sales Units NARUTO Series Wii DS GC GBA North America 847 Ben 10 Protector of Earth PUZZLE QUEST PS2 PSP DS Wii DS PSP North America/ Europe Japan / North America / Europe FIELDS CORPORATION All rights reserved. 22

23 Game Field Titles of Game Software Sold by D3 Inc. (Example) SIMPLE series SIMPLE series (mobile) Global contents(highend software) Ben 10 PUZZLE QUEST NARUTO Series Highend software Coming soon... JushinEnbu DS (Hero Tales) Winning Pachinko Pachislot series darksector * The imode and iappli logos are NTT DoCoMo s registered trademarks. * The Yahoo!, Yahoo! and Y! logos are registered brands or trademarks of U.S.based Yahoo! Inc. * EZweb is the trademark of KDDI Corporation. GAINAX カラー /Project Eva. Bisty D3 PUBLISHER HUANG JINZHOU GENCO FLAG 2007 獣神演武製作委員会 2007 FieldsPictures CARTOON NETWORK, BEN 10, the logos and all related characters and elements are trademarks of and Cartoon Network. (s07) Game and Software 2007 D3Publisher of America, Inc. Published exclusively by D3Publisher of America, Inc. worldwide. FIELDS CORPORATION All rights reserved. 23 NARUTO 2002 MASASHI KISHIMOTO. Game and Software 2007 TOMY. CLASH OF NINJA and 2002 TOMY. PATH OF NINJA and 2007 SHUEISHA. All rights reserved. and 2006 Infinite Interactive Pty. Ltd. Published exclusively by D3Publisher of America, Inc. worldwide. Puzzle Quest: Challenge of the Warlords and its associated characters and names are trademarks of Infinite Interactive Pty. Ltd. And used under license. Dark Sector 2007 Digital Extremes, London,Canada. Dark Sector and the Dark Sector logo are trademarks of Digital Extremes. Digital Extremes and the Digital Extremes logo are trademarks of Ontario Ltd. ALL RIGHTS RESERVED. Published by D3 lnc. under license from Digital Extremes. All other trademarks are properly of their respective owners.

24 Appendix I FIELDS CORPORATION All rights reserved. 24

25 Corporate Profile Corporate Data Company name Establishment Address of the head office Common stock Stock information Securities exchange Number of employees Main business activities Branch offices FIELDS CORPORATION June 1988 (Started business as TOYO Shoji Co., Ltd. in 1983) E Space Tower, 36, Maruyamacho, Shibuyaku, Tokyo , Japan 7, million Total number of shares issued and outstanding: 347,000 JASDAQ (nonconsolidated); 1,076 (consolidated) (As of September 30, 2007) Planning, development and sales of pachinko and pachislot machines Sapporo, Aomori, Sendai, Koriyama, Niigata, Takasaki, Tsukuba, Saitama, Chiba, Tokyo, Western Tokyo, Yokohama, Shizuoka, Nagoya, Aichi, Mie, Kanazawa, Kyoto, Osaka, Kobe, Hiroshima, Yamaguchi, Matsuyama, Fukuoka, Saga, Kagoshima, Kumamoto Principal Shareholders Hidetoshi Yamamoto Takeshi Yamamoto Sammy Corporation *1 Mint Co. RBC Dexia Investor Services Trust London Lending account client account State Street Bank and Trust Company Takashi Oya The Chase Manhattan Bank, N.A. London Secs Lending Omnibus Account Japan Trustee Services Bank, Ltd. (Trust account) Credit Swiss Zurich Number of shareholders by category Shareholders Number of shares held 105,200 (As of September 30, 2007) 40,000 27,500 16,000 11,028 5,056 5,000 4,191 3,614 2,721 Percentage of outstanding shares held 30.32% 11.53% 7.93% 4.61% 3.18% 1.45% 1.44% 1.21% 1.04% 0.78% Financial institutions 2.47% Securities companies 1.31% Other companies 14.62% Consolidated subsidiaries Equity method companies Japan Sports Marketing Inc. Fields Jr. Corporation Fields Pictures Corporation FutureScope Corporation D3 Inc. and eleven other companies Rodeo Co., Ltd. Kadokawa Haruki Corporation Individuals and others 68.39% Foreign companies and others 13.20% *1 On December 27, 2007, the shares held by Sammy Corporation were sold to Sankyo Co., Ltd. Resource: Fields FIELDS CORPORATION All rights reserved. 25

26 Our Tracks As a trailblazing creator pursuing more entertaining pachinko/pachislot machines Aiming to distribute pachinko/pachislot machines more widely Established Professional Management Co., Ltd., and Total Workout Corporation. January 2004 Invested in D3 Publisher Inc. March 2005 Consolidated D3 Publisher Inc. as a subsidiary of the Company. March 2005 Invested in Kadokawa Haruki Corporation. Nationwide expansion: to Tohoku, Chugoku, Shikoku, Kansai Established branch offices in Tokyo. Established in Nagoya to sell pachinko/pachislot machines. Obtained ISO9002: Renamed Fields Corporation Established a sales tieup with a pachinko/ pachislot machine manufacturer Sammy Corporation. Launched Pachinko Information Station, a CS service for the industry in collaboration with Mitsui & Co., Ltd. Established White Trash Charms Japan Co., Ltd. Consolidated Fields Jr. Corporation as a subsidiary. Obtained ISO9001: Started to sell Rodeo s pachinko/pachislot machines as a sales channel of Rodeo Co., Ltd. March 2003 Listed on JASDAQ. Evolution of LCD and chip technologies Invested in Rodeo Co., Ltd. July 2003 Released Sammy pachinko machines exclusively for Fields. Merged Leisure Nippon Newspaper Company and launched a new industrial vision. November 2003 Established business tieup with the Sankyo Group and Bisty Co., Ltd. Launched the Hall TV system to support pachinko hall management. November 2004 Released the first machine made via a fullscale collaboration with Bisty Co., Ltd. An increase in needs for enjoyment and recreation diversifying tastes and preferences Based on our firm recognition of potential needs for pachislot machines For higher recognition of and to revitalize the industry Independent distributor of all models by all manufacturers Toward a fabless manufacturer Toward a content provider 05 July 2005 Invested in and consolidated J. Sakazaki Marketing INC. as a subsidiary of the Company. October 2005 Integrated three subsidiaries and established Japan Sports Marketing Inc. April 2006 Consolidated thinkarts Co., Ltd., as a subsidiary of the Company. 06 April 2006 Consolidated Fields Pictures Corporation as a subsidiary of the Company. October 2006 Consolidated FutureScope Corporation. as a subsidiary of the Company. February 2007 Established Ildel Corporation 07 May 2006 Launched a fullscale collaboration with Olympia Co., Ltd., for a Gold Olympia brand. June 2005 Established G&E Corporation via joint investments of Sammy Corporation, Sankyo Corporation and Fields Corporation. NEXT FIELDS CORPORATION All rights reserved. 26

27 Group Structure Fields Corporation [2767] (As of December 31, 2007) PS Field Game Field Other Field Fields Jr. Corporation (100%) D3 Inc. [4311] (57.2%) Japan Sports Marketing Inc. (61.8%) Rodeo Co., Ltd. (35%) D3 Publisher Inc. White Trash Charms Japan Co., Ltd. (100%) Entertainment Software Publishing Inc. Fields Pictures Corporation (100%) Sammy Corporation D3Publisher of America, Inc. (United States) FutureScope Corporation (83.3%) Business partner Sankyo Corporation Vicious Cycle Software, Inc, (United States) G&E Corporation (33.3%) Olympia Co., Ltd. D3Publisher of Europe Ltd. (United Kingdom) Kadokawa Haruki Corporation (30%) D3DB S.r.l. (Italy) thinkarts Co., Ltd. (100%) LUCENT PICTURES ENTERTAINMENT INC. (100%) Note: This structure consists of our consolidated subsidiaries and affiliates. FIELDS CORPORATION All rights reserved. 27

28 Introduction to Fields Group Companies PS Field Fields Jr. Corporation Manages approximately 1,200 college students across Japan who are involved in the delivery and installation of pachinko and pachislot machines. It also conducts nationwide marketing research for about 14,700 pachinko halls and collects information on the types of machines installed in halls and their use. The information is fed back and used in the planning and development of new machines. Game Field D3 Inc. In March 2005, Fields turned the game publisher, D3 Publisher Inc., into its consolidated subsidiary, with the aim of contents deployment via media in the global market. A close business alliance with D3 Inc. reinforces Field s content provider business by vitalizing the efforts to obtain copyrights in Europe and the United States, as well as enabling faster product planning, development and sales of game software. Note: In April 2006, D3 Group shifted to a holding company system consisting of D3, Inc., a holding company, and the following operating companies: D3 Publisher Inc. in Japan, D3Publisher of America Inc. and D3Publisher of Europe Ltd. Rodeo Co., Ltd. Fields is an investor in and a comprehensive sales agent for Rodeo Co., Ltd., a group company of the top selling pachislot machine manufacturer Sammy Corporation. We are promoting collaboration by merging the outstanding development capability of the Sammy Group with the major merchandising rights and the planning and development abilities of Fields. The D3 Group Securities code 4311:JASDAQ D3 Inc. D3 Publisher Inc. Entertainment Software Publishing Inc. D3 Publisher of America, Inc. (United States) Vicious Cycle Software, Inc. (United States) D3 Publisher of Europe Ltd. (United Kingdom) D3DB S.r.l. (Italy) thinkarts Co., Ltd. Fields turned thinkarts Co., Ltd., which is engaged in the development of image and game software for pachinko/pachislot machines, into a new consolidated subsidiary. In collaboration with Fields Group companies, it aims to establish a firm system to produce highvalueadded digital content. FIELDS CORPORATION All rights reserved. 28

29 Introduction to Fields Group Companies (Continued) Other Field Japan Sports Marketing Inc. Established in October 2005 through the merger of J.Sakazaki Marketing Ltd.., which became a consolidated subsidiary of Fields in July 2005, Professional Management Co., Ltd., and Total Workout Corporation. It is involved in a wide range of sports entertainment businesses such as the planning and organizing of sporting events, marketing and distribution of broadcasting rights and the operation of gyms. Fields Pictures Corporation Established to create major content for movies and animation. Through the multiple use of digital content for pachinko, pachislot and games, the Group aims to create its own original primary content LUCENT PICTURES ENTERTAINMENT, INC. Commenced operations in October 2007, with the aim of planning and production of animation. It aims to secure content at its source, and enter the animation field as a part of the activities to create synergies within the Group through the cross utilization of the Group's content assets. FutureScope Corporation G&E Corporation Pursuing further possibilities of mobile entertainment, this company was established in October 2006 to propose a more convenient and more enjoyable lifestyle to the world. Using Fields wide range of entertainment content, it strives to provide a range of entertainment services and to realize new communitytype membership service by applying highlevel Internet technology. Japan s first school to train human resources for comprehensive entertainment companies, G&E Corporation was established by the joint investment of Sankyo Corporation, Sammy Corporation and Fields Corporation. At this school, students not only learn the basics of the industry but also improve their business skills, and systematically learn and acquire cuttingedge skills and knowledge. Many career opportunities in the investor companies and other entertainment companies await the graduates. Kadokawa Haruki Corporation Kadokawa Haruki Corporation has established a distinctive position in the publication industry through exploring untapped genres in every field. Haruki Kadokawa, its special advisor, is known as a forerunner of a media mixing strategy that promotes multifaceted content development for publication, movies, music, etc. In collaboration with this company, Fields Corporation conducts joint business regarding the multiple use of content held by Kadokawa Haruki Corporation. Moreover, using this company's content development abilities, Fields Corporation aims to transform itself qualitatively from the current businesses based mainly on the secondary use of existing content into a content provider that creates primary content and characters. FIELDS CORPORATION All rights reserved. 29

30 Financial Highlights Key financial data ( million) Net sales Operating Income Ordinary income Net income Common stock Net assets Total assets Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities Cash and cash equivalents at the end of year (Nonconsolidated) 11, , (Nonconsolidated) 10, , (Nonconsolidated) 11,496 1,700 1, ,069 6,211 1, (920) 1, (Nonconsolidated) 34,560 5,730 5,664 3, ,883 18,631 4,525 (724) 2,004 6, ,888 6,781 7,022 3,524 1,295 8,752 17,090 3,316 (2,253) (2,454) 5, ,211 11,866 12,209 6,620 1,295 14,507 37, (3,190) 2,029 5, ,658 12,097 12,480 6,926 7,948 33,426 72,584 2,965 (5,257) 10,177 13, ,814 12,348 13,127 7,085 7,948 39,411 87,556 6,164 (2,224) (1,540) 15, ,321 8,944 9,202 3,710 7,948 42,836 66,081 5,293 (4,772) 1,488 17, ,648 7,822 7,464 3,077 7,948 44,798 75,255 7,328 (3,824) , Q 77,485 5,988 5,500 2,261 7,948 43,520 61,920 3,053 (5,919) (114) 14,849 Indicators per share (Yen) Net assets per share (Nonconsolidated) 119, (Nonconsolidated) 1,430, (Nonconsolidated) 461, (Nonconsolidated) 1,325, , , , , , , Q 120,383 Annual dividend per share (Nonconsolidated) Net income per share 174,211 1,310,844 15,000 2,075,024 Old shares 100,000 New shares 27,398 10,000 2nd new shares 548 1,275, ,233 24,000 Commemorative dividend 10,000 Interim dividend 10,000 Yearend dividend 4,000 40,465 4,000 Interim dividend 2,000 Yearend dividend 2,000 19,888 4,000 Interim dividend 2,000 Yearend dividend 2,000 20,118 4,000 Interim dividend 2,000 Yearend dividend 2,000 10,692 4,000 Interim dividend 2,000 8,868 6,517 Management indicators (%) Shareholders' equity ratio Return on equity (ROE) Return on assets (ROA) Payout ratio (Nonconsolidated) (Nonconsolidated) (Nonconsolidated) (Nonconsolidated) (1) Q (1) Payout ratio for the year ended March 2004 was computed including a commemorative dividend. (2) Consolidated payout ratio. (2) 67.5 Other Total number of shares issued and outstanding (shares) (3) Number of employees (people) (3) (Nonconsolidated) (Nonconsolidated) (Nonconsolidated) 2, (Nonconsolidated) 2, , , , , ,000 1, ,000 1, Q 347,000 (3) October :10 stock split November :5 stock split September :2 stock split FIELDS CORPORATION All rights reserved. 30

31 PS Field PS Field: Transition in the Number of machines Sold (Unit: Machines) Year ended March 2003 Year ended March 2004 Year ended March 2005 Year ended March 2006 Year ended March 2007 Year ending March nd Half Total 2nd Half Total 2nd Half Total 2nd Half Total 2nd Half Total 1Q 2Q 3Q 1Q3Q Number of machines sold 113, , , , , , , , , , , , , , ,247 85, , ,088 60, ,248 Sales ratio Pachinko 34, % 43, % 78, % 42, % 102, % 145, % 91, % 190, % 282, % 74, % 255, % 329, % 123, % 222, % 345, % 27, % 10, % 38, % 42, % 81, % 98,625 82, , ,679 68, ,906 77, , ,944 85, , , ,53 58, ,424 57, , ,503 17, ,982 Pachislot 73.9% 65.3% 69.7% 72.2% 40.0% 55.2% 46.0% 37.5% 40.5% 53.4% 33.7% 39.4% 46.4% 20.9% 32.4% 67.4% 91.5% 81.8% 29.1% 70.2% Agency/distribution sales ratio Agency sales 36, % 46, % 83, % 45, % 105, % 151, % 92, % 194, % 286, % 82, % 273, % 356, % 127, % 223, % 350, % 27, % 12, % 40, % 44, % 84, % Distribution sales 96, % 79, % 176, % 107, % 64, % 172, % 76, % 111, % 187, % 77, % 110, % 188, % 102, % 58, % 161, % 57, % 114, % 171, % 15, % 187, % Direct/Indirect sales ratio Direct sale 79,859 82, ,848 98, , , , , , , , , , , ,291 68,170 96, ,786 47, , % 65.7% 62.8% 64.2% 75.2% 70.0% 73.1% 78.4% 76.5% 70.8% 75.9% 74.4% 73.0% 77.6% 75.6% 80.1% 76.1% 77.7% 79.5% 78.1% Indirect sales 53,589 43,376 96,965 54,949 42,392 97,341 45,369 66, ,396 46,470 92, ,422 62,019 62, ,956 16,979 30,323 47,302 12,316 59, % 34.3% 37.3% 35.9% 24.8% 30.1% 26.9% 21.6% 23.5% 29.2% 24.2% 25.6% 27.0% 22.4% 24.4% 19.9% 23.9% 22.3% 20.5% 21.9% FIELDS CORPORATION All rights reserved. 31

32 Appendix II FIELDS CORPORATION All rights reserved. 32

33 Japanese Leisure Market Market Scale of Pachinko / Pachislot Industry Changes in Pachinko Market (Unit: trillion) 2006 Japanese Leisure market total size of JPY78.9 trillion Total leisure market Sightseeing / excursion JPY10.7 trillion (13.5%) Hobby / creation JPY11.0 trillion (13.9%) Sports JPY4.3 trillion (5.5%) Pachinko / Pachislot JPY27.5 trillion (34.8%) Game / gambling / food & drink JPY25.5 trillion (32.3%) Pachinko / pachislot is one of the leading forms of entertainment in Japan, being played by 13.0% of the population in one of 14,700 venues Pachinko Market Changes in Number of Pachinko Players (10,000 people) 3,877 4,423 Entertainment business Institute 2,865 2,998 2,819 2,766 2,100 2,170 2,900 2,760 1,900 1,790 1,710 1,660 2,310 1,980 2,020 1,860 1,930 1,823 1,740 1,509 1,606 1,345 White Paper on Leisure Source: White Paper on Leisure 2007 by Central Research Service, Inc., Pachinko Participation FactFinding Survey 2007 by Entertainment business Institute FIELDS CORPORATION All rights reserved. 33

34 Income Structure of Pachinko Industry (FY2006) The gross profit ratio of a pachinko hall is around 10%, of which approximately 90% is returned to the players as free gifts. Example: Sports promotion lottery (toto) Rate of return: approximately 47% Pachinko and pachislot market size: 27.5 trillion (total lease amount of pachinko balls) Premiums: 24.8 trillion (returned to players) Gross profit: 2.7 trillion Gross profit: 2.7 trillion Investment for customer expansion New machine installment costs (purchase cost of new machines) Pachinko machine: billion Pachislot machine: billion Costs for constructing new halls and refurbishing existing halls Advertising, marketing and service expenses Other expenses related to equipment Other expenses Net income Pachinko and pachislot machine market: approximately 1,360.4 billion Hallrelated businesses Net income Source: White Paper on Leisure 2007 by Central Research Service, Inc., and Trend and Market Share of Pachinko Related Manufacturers 2007 by the Yano Research Institute and Estimation by Fields. FIELDS CORPORATION All rights reserved. 34

35 Players in the Pachinko/Pachislot Industry Players Machine manufacturers 31 pachinko machine manufacturers Over 60 pachislot machine manufacturers Regulated Direct sales 40% for pachinko and 20% for Pachislot Pachinko Hall Operators Around 14,674 in Japan(2006) Neighbourhood based Large number of small owner operators but some significant chains Constant need to attract and retain players Distributors Usually paid via a commission from manufacturers but may also have a resale model for pachislot Network of salesmen Not directly regulated Indirect sales 60% for pachinko and 80% for Pachislot Fickle client base High machine turnover (every 12 months) On average, each machine pays for itself in c. 36 weeks Regulated Source: Yano Research Institute Ltd. FIELDS CORPORATION All rights reserved. 35

36 Number of Pachinko Halls and Installed Machines Per Hall # of installed machines per hall ,224 18, ,773 17,426 17,173 16,988 16,801 16,504 Pachinko/Pachislot parallel establishment (Store #) ,076 15,617 15,165 14, ,611 17,594 17,174 16,764 16,413 16,021 15,691 15,255 14,695 13,844 13, , Pachislot Specialty Stores (Store#) ,110 1,249 1,381 1,773 2,002 2, Source: Trend and market share of Pachinko related makers 2007 by Yano Research Institute FIELDS CORPORATION All rights reserved. 36

37 Unit Sales and Sales Amount of Pachinko/Pachislot Machines 12,000,000 8,672 8,750 7, ,000,000 Pachinko Machine Sales Amount (hundred million yen) 6, ,184 5,684 5,691 5,615 Pachislot Machine Sales Amount(hundred million yen) 8,000,000 3,623 5,255 5,248 5,430 4, ,000,000 2,000,000 Unit sales of Pachislot machines 6,000,000 4,359,056 Unit sales of Pachinko machines 4,067,195 3,966 3,513 3,146 5,851,719 5,687,950 2,693 5,529,069 5,469,064 2,353 1,828 4,675,973 4,503,180 4,521,208 3,373,704 3,133,340 3,935,063 3,716,599 2,847,838 2,358,321 4,060,759 4,012,901 4,047,427 3,686,677 3,831,211 3,174,079 3,368,839 3,230,489 3,128, , , , , ,705 1,134,341 1,290,719 1,501,894 1,842,392 1,675,049 1,804,292 1,637, Pachinko/Pachislot Machine Total Sales Amount (hundred million yen) 1995 NA 1996 NA 1997 NA , , , , , , , , ,604 Source: Trend and market share of Pachinko related makers 2007 by Yano Research Institute FIELDS CORPORATION All rights reserved. 37

38 Number of Installed Pachinko/Pachislot Machines and Annual Turnover Rate Annual turnover rate of Pachinko machine (times) 12,000,000 (1) ,000, Annual turnover rate of Pachislot machine (times) 8,000,000 (1) ,000, Number of installed Pachinko machines 4,000,000 4,753,358 4,868,050 4,763,433 4,710,646 4,709,796 4,755,302 4,786,255 4,864,062 4,891,944 4,969,156 4,899,198 4,937, ,827,577 3,906,767 3,853,529 3,686,066 3,558,036 3,422,650 3,321,391 3,252,241 3,227,239 3,077,537 2,960,939 2,932, Number of installed Pachislot machines 2,000, , , ,090 1,004,642 1,139,356 1,323,729 1,459,233 1,606,123 1,660,839 1,887,239 1,936,470 2,003, Annual turnover rate of total machines (times) Source: Trend and market share of Pachinko related makers 2007 by Yano Research Institute FIELDS CORPORATION All rights reserved. 38

39 Market Share by Manufacturers Unit Sales Share Pachinko Machine Ranking Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share 1 SANKYO 18.6% Sanyo 18.9% Sanyo 16.4% Sanyo 25.2% Sanyo 22.9% Sanyo 24.7% Sanyo 23.1% 2 Sanyo 15.1% SANKYO 17.3% SANKYO 14.8% SANKYO 16.4% SANKYO 21.1% SANKYO 18.2% Kyoraku 20.9% 3 Heiwa 11.7% Heiwa 10.8% Heiwa 10.0% Daiichi Shokai 9.5% * Heiwa 8.7% Kyoraku 9.6% SANKYO 16.6% 4 Daiichi Shokai 7.4% Daiichi Shokai 10.3% Kyoraku 8.1% Heiwa 7.1% Daiichi Shokai 7.6% Newgin 7.9% Newgin 6.6% 5 Sofia 5.9% Kyoraku 7.6% Daiichi Shokai 7.9% Sammy 6.7% Newgin 6.9% Sammy 7.1% Daiichi Shokai 5.1% *The number of sales of Heiwa in FY2004 is converted for 15 months for the accounting period change. *Sankyo sales includes Bisty Unit Sales Share Pachislot Machine Ranking Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share Manufacturer Market share 1 Aruze 36.2% Sammy 32.8% Sammy 31.1% Sammy 32.1% Sammy 40.4% Sammy 33.6% Sammy 31.9% 2 Yamasa 17.6% Yamasa 17.8% Yamasa 20.4% Olympia 18.5% Olympia 16.4% Daito Giken 13.0% Daito Giken 12.2% 3 Sammy 13.5% Aruze 16.1% Aruze 19.8% Aruze 13.6% Yamasa 8.9% Olympia 10.3% Yamasa 10.5% 4 Olympia 8.8% Olympia 8.5% Olympia 11.7% Yamasa 11.9% Daito Giken 7.8% Yamasa 8.3% Olympia 9.6% 5 Net 4.4% Pioneer 5.0% Pioneer 3.3% Daito Giken 4.8% Aruze 4.6% SANKYO 6.1% Kita Denshi 9.4% *Sammy sales includes Rodeo *Sankyo sales includes Bisty *Aruze sales includes Eleco,Mizuho and Macy *Olympia sales includes Heiwa Source: Trend and market share of Pachinko related makers 2007 by Yano Research Institute FIELDS CORPORATION All rights reserved. 39

40 Disclaimer The plans, strategies and estimates of the Company indicated in these documents, other than actual results and facts, include potential risks and uncertainties and cannot be guaranteed. Potential risks and uncertainties include, but are not limited to, the economic environment of the pachinko/pachislot market in which the Company operates, market competition and the products handled by the Company. FIELDS CORPORATION All rights reserved. 40