The 12th Term Fourth Quarter Financial Results Presentation. CROOZ, Inc. JASDAQ Standard; Code 2138

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1 The 12th Term Fourth Quarter Financial Results Presentation CROOZ, Inc. JASDAQ Standard; Code 2138

2 The 12th Term Fourth Quarter Financial Results Presentation Agenda Starting off This quarter's good news Business What does CROOZ, Inc. do? What sort of games do we provide? What are our major titles? How popular are we? Strategy What devices will we focus on? What regions will we focus on? What technologies are we improving? What systems are CROOZ proud of? What are the strengths of CROOZ? Results What are the trends for quarterly results? What are the primary quarterly cost trends? What is the trend in regards to the number of employees? What are the 12th Term results? What percentage of full year performance estimate was achieved? Shareholder return policy What is the policy on return to shareholders? What are the trends in regard to dividends and payout ratios? Lastly What steps will we take to grow in the near future? Policies for the near future Measures for the near future (offense) Measures for the near future (defense) A special notice FAQ Reference: What are social games?

3 This quarter's good news An important message We have a very special announcement on the last page. Please look forward to it.

4 New records achieved for sales and operating income in the 12th Term Fourth Quarter Sales were billion yen, 1.2 times that of the third quarter Operating income was 680 million yen, 1.6 times that of the third quarter

5 RAGNABREAK, HUNTER x HUNTER, and Avalon are doing great! Avalon in particular is a huge hit as expected, providing a significant boost of confidence for future success and a basis for increased operating income in the 13th Term, from April onward!!

6 The 12th Term Fourth Quarter Financial Results Presentation This quarter s good news Since "The Knights of Avalon" TV commercial in February, we have surpassed one million registered users, exceeding our expectations for an increase in sales. Thanks to our "RAGNABREAK" TV commercial in the third quarter, we received our highest monthly operating income yet in January of the fourth quarter. We predicted a significant increase in operating income for the fourth quarter if no significant promotional activities were made, but we decided to work toward better results for April onward during the 13th Term. As a result, sales increased dramatically, and we were able to secure a significant increase in operating income for the 13th Term, so expectations should be high!

7 Before getting into details regarding these results, allow me to introduce CROOZ.

8 What does CROOZ, Inc. do?

9 CROOZ provides Internet-based services worldwide. Singapore CROOZ Asia Pte.Ltd. Established July 26, 2012 Vietnam CROOZ Vietnam Acquired entire equity interest February 2013 Tokyo CROOZ,Inc. Established May 24, 2001 ForGroove, Inc. Established January 23, 2012 Seoul CROOZ Korea Corporation Established December 6, 2012 San Francisco CROOZ America, Inc. Established August 1, 2012 Current services are centered on social games.

10 What sort of games do we provide? Users (10,000s) /20 3/4 4/18 8/1 5/2 Released by our affiliate ForGroove 7/13 Global version of Mobage title 3/13 10/10 6/13 9/6 7/25 3/16 12/23 Released by our affiliate ForGroove 9/13 3/30 Title for Yahoo! Mobage

11 The 12th Term Fourth Quarter Financial Results Presentation What sort of games do we provide? Year 1-10th term As our first title, we released Nekketsu Kouha Kunio Battle for Mobage. It became a hit, and next we released another licensed title, Shounan Bakusou-Zoku, which also sold well, making us one of Mobage's top social application providers. Year 2-11th term We continued to release character-based hits one after another, such as Sengoku Battle! Kunio-Kun (Mobage award winner) and Team and Resistance! Gang King. In addition, we released an original title, RAGNABREAK, our biggest hit to date. Year 3-12th term (current) Our No. 1 title, RAGNABREAK continues to grow. We also released our first overseas title Deity Wars, and are beginning to develop globally. The Knights of Avalon and HUNTER HUNTER BATTLE COLLECTION continue to maintain hit status as well, contributing to our rapid growth. * Users for cancelled services or services planned for cancellation have been excluded.

12 What are our major titles? Card battle games with high-quality illustrations as a major selling point

13 The 12th Term Fourth Quarter Financial Results Presentation What are our major titles? RAGNABREAK is our first main title. Known for its high-quality card illustrations outmatching other card battle games, it exceeded one million users in its first 6 months, and has currently exceeded 1.8 million users. It has also ranked in the Mobage Top 20 for 10 months in a row, was ranked number 1 overall by mixi game ranking, and was selected as "2012 Mixi Game of the Year" Grand Prix. The ios version was ranked number 1 free game by the App Store the day after it was released. Because of this, its fan base continues to grow for various devices and platforms.

14 What are our major titles? A real-time guild battle game, taking place in a parallel world to RAGNABREAK.

15 The 12th Term Fourth Quarter Financial Results Presentation What are our major titles? The Knights of Avalon is our second main title. This is a real-time guild battle game, taking place in a parallel world RAGNABREAK. It exceeded 500 thousand users in approximately 50 days from release, and has over 1 million users today. It has also ranked in the Mobage Top 20 for 6 months in a row, and currently ranks among the Top 10.

16 What are our major titles? Released by our affiliate ForGroove A card battle game under copyright of the popular anime.

17 The 12th Term Fourth Quarter Financial Results Presentation What are our major titles? HUNTER x HUNTER BATTLE COLLECTION is our third main title. This is based on a copyrighted top-class anime, rising above dozens of competitors. It exceeded 500 thousand users in approximately 20 days from release. It also ranks in Mobage's Top 15 smartphone and feature phone games. Additional Information ForGroove, Inc., a fifty-fifty joint venture affiliated with Nippon Television, is now acting as distributor for HUNTER x HUNTER, and is in charge of recording sales. CROOZ is in charge of project management, and recording of sales distribution. So the sales of HUNTER x HUNTER do not fully contribute to CROOZ's sales, but contribute to its gross profits. (Sales x % of operating costs -> our sales. Because of this, TV commercials and platform distribution fees etc. will be covered by ForGroove, and CROOZ bears no responsibility.)

18 How popular are we? Mobage ranking for games released in 2012 or later: 2nd 3rd 4th CROOZ games make up 3 of the top 5 Mobage titles.

19 The 12th Term Fourth Quarter Financial Results Presentation How popular are we? As of April 30, 2013, CROOZ games "The Knights of Avalon," "HUNTER x HUNTER BATTLE COLLECTION," and "RAGNABREAK" ranked 9th, 13th, and 14th respectively in Mobage's Top 20 smartphone game ranking. Excluding titles released in-house by, or in collaboration with, DeNA Co., Ltd, CROOZ titles ranked 2nd, 3rd, and 4th on Mobage s Top 5 released in 2012 or later, establishing our name as a hit-producing company for Mobage. This ranked at April 30, 2013

20 What devices will we focus on? No. of monthly unique visitors (smartphone) Percentage of smartphones users 10th Term 11th term 12th Term (This term) We will focus energy on smartphones to increase the number of users.

21 The 12th Term Fourth Quarter Financial Results Presentation What devices will we focus on? We are focusing on providing social games for smartphones. As a result, the percentage of smartphone users visiting our titles has increased steadily each quarter, and today 60.8% of all visitors use smartphones. We are confident that this remarkable trend will continue into the near future, and will continue focusing on development for smartphones. In addition, due to the fact that 1 in 3 people in the US are said to own a tablet device, we estimate that this number will continue to expand, so we will focus our efforts on these devices along with smartphones. * The number of monthly unique visitors and percentage of smartphone users were determined for our main social games only. * The feature phone image used in this presentation was extracted from NTT DOCOMO's website. The smartphone image was extracted from Apple Japan's website.

22 What regions will we focus on? East Asia (Japan, South Korea, China) North America (USA, Canada) Population: 1.53 billion people GDP: trillion USD Population: 350 million people GDP: 17.5 trillion USD We will focus on the large markets of East Asia and North America.

23 The 12th Term Fourth Quarter Financial Results Presentation What regions will we focus on? We will focus distributing games to the large markets of East Asia (Japan, South Korea, China) and North America (USA, Canada). So far we have established marketing bases in three countries within those regions: Singapore, USA, and South Korea. We plan to actively establish new bases in regions with large markets, or those in which expansion is expected, in order to strengthen the development of new games for worldwide users. The success of these new games will ensure a portion of profit from overseas to increase, starting in the 13th term for CROOZ. Extracted from the "Sekai Keizai no Neta-cho" website covering worldwide economic and statistical information.

24 What technologies are we improving? Creative technology Development power Systemized through our Venus accelerated development framework G4 Four technologies Universal network technology Delivery technology Infrastructure power Systemized through our Zeus common infrastructure base Communicative technology Marketing power Systemized through our Compass marketing database Visual technology Design power Outlined in the four articles of our Blue Fire design guidelines

25 The 12th Term Fourth Quarter Financial Results Presentation What technologies are we improving? We are mainly focused on improving four technologies. We believe these four technologies, called G4, are vital to long-term survival in any sort of network-based business. As we plan to focus more on native apps in the near future, we will devote additional energy to these 4 technologies to increase the level of freedom for graphics, motion, and sound, to continuously provide new experiences for our users. Development power Infrastructure power Marketing power Design power Creative technology Delivery technology Communicative technology Visual technology *For details regarding the four articles of our Blue Fire design guidelines, please refer to our website.

26 What are the strengths of CROOZ? Compass Marketing database Analysis of areas to be tuned up S4 Four Systems Innovative technological infrastructure Venus Accelerated development framework Agile tuning operations through piecemeal development Zeus Common infrastructure base A network capable of handling heavy loads on demand Chronometer Accelerated business system Optimizing daily routine work

27 The 12th Term Fourth Quarter Financial Results Presentation What are the strengths of CROOZ? CROOZ continually strives to be a technologically powerful company. In particular, we value systems that ensure high-quality, do not require special skills, and allow for effective and highly productive work. This philosophy helped to create one of our company s strengths, a technological infrastructure system made up of four major technologies. We call this system S4 and work each day to enhance it. Compass Venus Zeus Chronometer Marketing database Accelerated development framework Common infrastructure base Accelerated business system For further information regarding each system, please refer to our website.

28 What are the strengths of CROOZ? Positive A remarkable ability to attract users Excellent products RAGNABREAK, Avalon, HUNTER x HUNTER Positive Marketing power Compass Industry experience Affluent executives Positive Promotional power Capital, expertise in TV commercials and web promotions Neutral Speed in adaptation Although not to an overwhelming degree We will improve even more Positive The ability to locate talented human resources We were selected as No. 1 in "corporate style" in a survey conducted by a leading personnel-recruiting company. We will hone these 5 elements in order to advance to the top of the industry.

29 The 12th Term Fourth Quarter Financial Results Presentation What are the strengths of CROOZ? Excellent products, able to draw in many users We will release many popular titles such as RAGNABREAK, The Knights of Avalon, and HUNTER x HUNTER BATTLE COLLECTION to increase the number of users. Marketing power Our executives have over 10 years of experience in internet advertising, fee-based contents, etc., and will continue to improve with our unique "Compass" database. Ability to promote With capital strength and accumulated expertise, we will continue to utilize an efficient promotional toolsmeasures to maximize our profit. Speed in adaptation We will regain an overwhelming speed we once used to have when we were listed in order to meet fast- changing market place. The ability to recruit talented human resources We were selected as No. 1 in terms of corporate environment where people want to work in the survey of a leading personnel-recruiting company.

30 What kind of results can we show?

31 What are the trends for quarterly results? (Millions of yen) Sales Operating profits Operating profit ratio 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 11th term (previous term) 12th term (this term) Record breaking sales and operating profits

32 What are the trends for quarterly results? (Millions of yen) Sales Operating profits 12th term, 4Q (this term) 11th term, 4Q (same term last year) Compared to Last Year About 2 times About 2.3 times 12th term, 3Q (previous quarter) Compared to Previous quarter About 1.2 times About 1.6 times Operating profit ratio Term net profit About 2.5 times About 1.6 times

33 The 12th Term Fourth Quarter Financial Results Presentation What are the trends for quarterly results? 12th term 4Q sales were 4.78 billion yen, about 1.2 times higher than 3Q, while operating income was 680 million yen, about 1.6 times higher than 3Q results, for new record highs in both sales and operating income. As mentioned before, a continuous increase in users for RAGNABREAK and The Knights of Avalon, along with the sudden rise of HUNTER x HUNTER BATTLE COLLECTION released at the end of the third quarter, are significant contributors to the increase in sales and operating income.

34 What are the primary quarterly cost trends? (Millions of yen) Advertising costs Personnel costs Subcontracting costs 11th term (previous term) Large-scale promotional 12th term (this term) activities were carried out for the 13th term

35 What are the primary quarterly cost trends? (Millions of yen) 12th term, 4Q (this term) 11th term, 4Q (same term last year) Compared to Last Year 12th term, 3Q (previous quarter) Compared to Previous quarter Advertising costs Personnel costs Subcontracting costs

36 The 12th Term Fourth Quarter Financial Results Presentation What are the primary quarterly cost trends? A fourth quarter increase in advertising and personnel costs stands out in particular when compared to third quarter costs. Advertising costs include large-scale promotional activities for Avalon in February, and personnel costs include an aggressive hiring campaign for talented engineers, but these investments were done in anticipation of higher revenue for the 13th term, so we can say that they panned out as expected.

37 What is the trend in regards to the number of employees? Social game related (engineers, designers, planners, etc.) "SHOPLIST.com" and "CROOZ blog" related (engineers, designers, planners, etc.) Other in-house infrastructure related (engineers, system support, etc.) Back office (marketing, management, personnel, etc.) 11th term (previous term) 12th term (this term) Personnel increase with a focus on social game related creators

38 The 12th Term Fourth Quarter Financial Results Presentation What is the trend in regards to the number of employees? We added 44 employees in the fourth quarter, for 367 employees in total. Compared to 11th term 4Q, we have about twice as many employees now, but the majority of them are. In general, in-house infrastructure and back office personnel planning is determined by the number of employees needed for social game development.

39 What are the 12th Term results? (Millions of yen) 11th term (previous term) 12th term (this term) Compared to Previous Term Sales About 1.5 times Operating profits Term net profit We're aiming for a large increase in revenue for the 13th term by reinvesting the sales proceeds into advertisement.

40 The 12th Term Fourth Quarter Financial Results Presentation What are the 12th Term results? Sales for the 12th term were billion yen, for an increase of 55% from the 11th term. Operating income saw a 32 million yen decrease ( 2%). Compared to 11th term numbers, sales increased significantly driven by our three strongest titles RAGNABREAK, The Knights of Avalon, and HUNTER x HUNTER BATTLE COLLECTION which were among the top titles in Mobage Ranking. However, when factoring in aggressive promotional activities, operating income was nearly the same as the last term.

41 What percentage of full year performance estimate was achieved? (Millions of yen) Full-year performance estimate Total results Achievement ratio Sales Operating profits Term net profit We've achieved our upward-revised sales estimate for the year.

42 The 12th Term Fourth Quarter Financial Results Presentation What percentage of full year performance estimate was achieved? We achieved 103% of the performance estimate for sales, and 96% for operating income. In February 2013,was an upward revision made to the full-year sales performance estimate, from 11 billion yen to 13.5 billion yen, and due to the excellent performance of our three strong titles, we were able to meet that estimate.

43 What is the policy on return to shareholders? As a general rule, aim to distribute dividends every term Aim to achieve a payout ratio of 30% or higher Recognition among all employees of the importance of dividends Recognition among all employees of the importance of operating income Aim to heighten mid-term stock prices by achieving our corporate vision Consider various methods to improve liquidity of shares Consider an investment unit price which will encourage more investors Consider a period where a priority is made on reinvestment in business by increasing internal reserves than paying out dividends.

44 The 12th Term Fourth Quarter Financial Results Presentation What is the policy on return to shareholders? Once per quarter, CROOZ officers and executives take a retreat together and review the return policy to shareholders based on stock prices and financial conditions. (1) As a general rule, we seek to ensure income that will allow us to pay dividends to shareholders each term. CROOZ has paid dividends since the term following listing. (2) We aim to achieve a payout ratio of 30% so we can make returns to investors as many as possible. (3) We are creating an environment where all employees, not just officers and managers, recognize the importance of dividends. As a concrete example of our policy, employee bonuses are calculated based on the source of dividends to shareholders. (4) We are creating an environment where all employees, not just officers and managers, recognize the importance of operating income. As a concrete example of our policy, officer remuneration and manager salaries are calculated based on the operating income of the previous term. (5) We do not aim for short-term increases in stock prices, but increases in the mid-term based on achieving our corporate vision. (6) We are considering various methods to improve the liquidity of our shares. Our aim is to secure at least 2,200 shareholders in the mid-term. (As of late March 2013, we have 5,078 shareholders.) (7) We are considering an investment unit price which will encourage a large number of investors. (8) We will consider a period where a priority is made on reinvestment in business by increasing internal reserves than paying out dividends.

45 What are the trends in regard to dividends and payout ratios? 8th term 9th term 10th term 11th term 12th term Dividend per share (yen) Total dividends (millions of yen) Dividend payout ratio (%) CROOZ has been paying dividends each term since the term after listing.

46 The 12th Term Fourth Quarter Financial Results Presentation What are the trends in regard to dividends and payout ratios? CROOZ has succeeded in paying dividends each term since the term after listing. As mentioned previously, we spent a great deal of effort in the 12th term actively providing high-quality original games, and meeting business challenges for overseas development, etc. Because of this, our annual dividends per share amount will be the same as last term. However, we will work to increase dividends and dividend ratios with our performance and business situation in mind. * Stock splits were performed on October 1, 2010 and March 1, Figures calculated prior to these have been adjusted to reflect the splits. * The 7th term dividend includes a portion commemorating the first anniversary of the company's listing, worth 225 yen. * The dividend payout ratio for the 9th term is a theoretical figure that assumes deductions of irregular factors such as extraordinary losses.

47 ? What steps will we take to grow in the near future (Policies and measures for the near future)

48 Policies for the near future Stay focused on browser games from Mobage, etc. Expand our market share and aim for the top (Three titles are planned for release in the first half of the year) & Actively and independently release native apps in Japan and overseas through AppStore, GooglePlay, etc. (Three titles are planned for release in the first half of the year)

49 The 12th Term Fourth Quarter Financial Results Presentation Policies for the near future Undetermined period (first half of the year): Two other native apps for release in Japanese and worldwide markets Browser game for Japanese market x 1 Browser game for Japanese market x 1 June July August September Native app for Japanese and worldwide markets x 1 Browser game for Japanese market x 1 Planned for second half of year For browser games in the Japanese market, we will continue to increase the number of users for our 3 main titles, but also expand our share of the market by releasing new original game titles as an extension of our main ones. As a new challenge, we will focus our efforts on native apps to p oneer new markets in Japan and overseas. At each of our bases around the world, we will carry out marketing efforts to provide services that take local needs into account, and are acceptable to the local population. We will also strengthen our partnership with businesses in each region that possess important information and assets.

50 Measures for the near future Offense Recruit native app developers aggressively!

51 The 12th Term Fourth Quarter Financial Results Presentation Measures for the near future Offense We will assemble a team of talented new recruits for native app development, making it unnecessary to move any creators who are currently working on browser games (Mobage). In other words, we will add new personnel without any drop in sales. And with our acquisition of BANEXJAPAN Inc. announced in April, we acquired an entire group of talented web developers. All that's left is to start aggressively hiring native app developers. And we have a secret plan for that.

52 Measures for the near future Defense We have to be just as aggressive on defense.

53 The 12th Term Fourth Quarter Financial Results Presentation Measures for the near future Defense Since we are functioning under the "Product First" philosophy, we've already implemented a system for creating top-quality products. We have no plans of increasing personnel at a reckless pace. Even overseas, we've only recruited a select few of exceptionally talented individuals, and we have ample communication taking place between our Japan and overseas offices. As a prerequisite for release, most of our projects must be possible within the capacity of our in-house development teams in Japan and overseas. So we are not excessively dependent on subcontracts.

54 That is all for the fourth quarter earnings announcement, However...

55 To end our meeting today, we have a special announcement.

56 But before that... Instead of a full-year performance estimate, we will be announcing a quarterly performance estimate for each following quarter.

57 The 12th Term Fourth Quarter Financial Results Presentation What does performance look like for the near future? Up to now, CROOZ has been providing performance estimates on a full-year scale, but the quickly changing market makes it difficult to provide accurate long-term performance estimates. So in order to prevent confusion among our investors due to obscure long-term numbers, we will instead be announcing a quarterly performance estimate for each following quarter.

58 What is our 13th term 1Q performance estimate? 5.3 billion about 2.4 times yen in sales, that of 12th term 1Q 1.4 billion about 4 times yen in operating income, that of 12th term 1Q.

59 What is our 13th term 1Q performance estimate? (Millions of yen) Sales Operating profits Term net profit 13th term, 1Q (this term) 12th term, 1Q (same period last year) Compared to Last Year About 2.4 times About 4 times About 4 times 12th term, 4Q (previous quarter) Compared to Previous Quarter About 2 times About 2 times Both sales and operating income are projected to increase by a wide margin.

60 The 12th Term Fourth Quarter Financial Results Presentation What is our 13th term 1Q performance estimate? 13th term first quarter sales are projected at 5.3 billion yen, with operating income projected at 1.4 billion yen, about 2.4 times that of sales and 4 times that of operating income from the 12th term's first quarter. However, these projections do not include sales numbers from new titles planned for release in the 13th term's first quarter, nor do they include advertising costs related to those titles. If these new titles are projected to produce numbers which exceed expectations, similar to one of our main titles "The Knights of Avalon," we may carry out promotional investments in the 13th term's second quarter, but nothing like the large-scale investment of the previous quarter.

61 And one more thing...

62 New records were achieved in April for monthly sales and operating income. Based on our high level of expertise and confidence, we are currently developing native apps for distribution to new market such as AppStore and GooglePlay.

63 The 12th Term Fourth Quarter Financial Results Presentation A special notice Allow me to announce results for the month of April in our 13th term's first quarter. After April's result, the former single-month company records for both sales and operating income were dramatically renewed. These achievements provide us with significant momentum on our way to meeting the 13th term's first quarter performance estimate. As mentioned previously, we have already started developing native apps for distribution to new markets such as AppStore and GooglePlay, with launch dates slated from July. At this point, we are confident enough to release these in Japan as well as overseas. Expect them to do well.

64 That wraps up our earnings announcement. But from this point we'd like to list FAQ and reference materials, so please feel free to continue looking.

65 FAQ Plus Twitter-like comments from Obuchi

66 The 12th Term Fourth Quarter Financial Results Presentation FAQ We have gathered frequently asked questions for this FAQ compilation. Q: How many employees work at CROOZ? A: 367(As of late 12th term) Q: Why did the number of employees increase by more than 40 during the fourth quarter alone? A: Most were mid-career employment as developers for social games. As a result of the investment for the future term, we have enough development power. Q: What is the ratio of genders at CROOZ? A: About 80 percent male, 20 percent female. Q: What is the average age at CROOZ? A: 29(As of late 12th term) Q: What is the job distribution like at CROOZ? A: Ninety percent of our employees are developers and creators. The remaining 10% work in marketing or back office divisions. This ratio is unlikely to change. We are a technological company, and most of our employees are technical workers. Q: How many new employees will CROOZ hire over the next year? A: If we find capable human resources, there is no limit to how many people we will hire, and then challenge in a number of different ways. We will accept lower profits compared to last year and greater personnel expenses if it means gathering talented individuals. Investing in the future is extremely important. We strike while the iron is hot. What is the average length of service for employees at CROOZ? A: One year and eight months. (As of late 12th term) Two years ago it was 3.5 years, which is high considering industry standards, but since we've hired nearly 300 employees in the last two years, our average length of service has dropped. *Twitter images extracted from the Twitter website.

67 The 12th Term Fourth Quarter Financial Results Presentation FAQ Q: What is the turnover rate? A: 13.5 %(As of late 12th term) This is reasonable at an IT company. Our goal is closer to 10%. Q: What is the average salary at CROOZ? A: 5.15 million yen. (As of end of December, 2012) Q: Do you believe the growth of social games will continue? A: Yes. Q: What are the strengths of CROOZ social games? A: We've developed titles that draw in a large number of users, such as RAGNABREAK, The Knights of Avalon, and HUNTER x HUNTER BATTLE COLLECTION, our executives with long, diverse careers in marketing, combined with our independent "Compass" database, give us strong marketing capabilities, we utilize our promotional know-how to continuously invest as much capital as possible in large-scale promotional activities, and we were selected as No. 1 in "corporate style" in a survey conducted by a leading personnel-recruiting company, indicating our capability to recruit talented individuals. Q: Can you tell us the status of social games based on title? A: That information is not made public. Q: Can you tell us detailed KPI on social games? A: That information is not made public. Q: What are CROOZ's strengths as a company? A: Systemized core systems for our development framework, marketing database, network infrastructure, etc. independently.

68 The 12th Term Fourth Quarter Financial Results Presentation FAQ Q: Will you tell us the mid-term business plan at CROOZ? A: We won't get into that at this time. Just as the fact that no one predicted that Mobage would become a huge media entity five years ago taught, the changes in this industry come hard and fast, which means that quick, flexible reactions to the environment are more important than solid planning. In the IT business, speed is king. Thinking five years ahead is good, but looking right ahead is better. Rather than thinking of profits planned for five years from now, creating a system and corporate culture that can handle change seems wiser. Q: What are CROOZ s major projects in the near future? A: For browser games in the Japanese market, we will continue to increase the number of users for our 3 main titles, but also expand our share of the market by releasing new original game titles as an extension of our main ones. As a new challenge, we will focus our efforts on native apps for light users to pioneer new markets in Japan and overseas. Q: What efforts is CROOZ making in the smartphone field? A: All new mobile services are being planned and developed with smartphones as a base, and released at a date no later than for feature phones. In addition to global operation, we are working to improve our smartphone services. Q: CROOZ donated 5 million yen in the wake of the earthquake and tsunami. How else does CROOZ plan to contribute to society? A: We try not to be a company that contributes only in the wake of an earthquake, but one that naturally contributes through everyday activity. CROOZ donates 100,000 yen to a guide dog fund with every new social game title released, taking profit generated by sighted users who enjoy our games, and trying to help those with visual impairments enjoy life more.

69 The 12th Term Fourth Quarter Financial Results Presentation FAQ Q: What is your current business scheme? A: There is still plenty of room for growth in social games, using original titles as an axis. We aim to multiply the scope of our sales. In the near future we will actively work to obtain global sales. We believe we can be the top SAP. Q: What is your current target demographic? A: Male users in their 30s or older. This group is our biggest payer of user fees. But soon we plan to expand to a wider demographic of users, including those overseas. Q: They say your officers are on average the second youngest of all listed companies. Tell us more about that. A: Every July, Toyo Keizai issues a report on officers for all listed companies and our company's officers ranked the second youngest out of 3,595. The total average for officers was 59.6 years old and our average was 36 years old. Q: Real-money trading (RMT) is a problem cropping up in recent social games. What do you think of this issue? A: We believe it is a hindrance toward the healthy enjoyment of games. We will monitor the problem carefully and work together with platforms to implement policies and methods to deal with it. Q: Did the cancellation of "complete gacha" services affect profits or KPI? A: There was almost no effect. Q: Why did you establish affiliate companies in South Korea, Singapore, San Francisco, etc? A: Our affiliate companies in South Korea, Singapore, and Vietnam will serve as marketing bases for Southeast Asia and Greater China. While offshore development is taking shape in Vietnam. Our affiliate company in San Francisco is to serve as a marketing base for North America, the market we will pursue most aggressively in the near future. We will actively work to obtain profits there.

70 Reference: What are social games? Packaged games Social games Desktop game consoles Mobile phones, PC

71 The 12th Term Fourth Quarter Financial Results Presentation What are social games? Packaged games Social games One-time sale model Basically played by 1 or 2 players with limited communication There is great risk in relation to the profitability of these games as they cannot be modified after they are put on the market. Continuous revenue generating model Basically played by multiple players; abundant communication and highly entertaining Stable revenue generation as user inputs can be reflected instantly and improvements can be made Game machine manufacturers: Nintendo, Sony, etc. Game site operators: DeNA, GREE, etc. Game software developers: Capcom, Sega, etc. Game application providers: CROOZ,Drecom, etc. Desktop game consoles Wii PS3 Xbox360 Mobile phones, PC (Cell phone and Smartphone, PC) Glossary Social games Games offered as social applications via SNS (social networking services). *Wii screens and game software pictures in this material have been extracted from the website of Nintendo. Playstation 3 screens have been extracted from the website of Sony Computer Entertainment Inc. Mobage screens have been extracted from the website of DeNA Co., Ltd. Facebook images have been extracted from the Facebook website. Images of notebook computers have been extracted from the Hewlett-Packard Japan website.

72 ? What is our business model Approximately 123 million users in total Approximately 61.4 million users Approximately 37.8 million users Approximately 32.5 million users Game Platforms

73 The 12th Term Fourth Quarter Financial Results Presentation What is our business model? We provide Nekketsu Kouha Kunio Battle and other social games through the Mobage game platform from DeNA Co., Ltd. Anyone who owns a mobile phone through NTT docomo, au, and softbank are potential customers. We earn revenue from fees paid by users who access game platforms including Mobage, Yahoo!Mobage, mixi, Google Play, and App Store via mobile phone networks. *Number of users: Extracted from the website of the Telecommunications Carriers Association *Logos images have been extracted from the websites of NTT DOCOMO, Inc., KDDI CORPORATION, SOFTBANK MOBILE Corp., DeNA Co., Ltd., mixi, Inc., Google, and Apple Japan respectively.

74 How does CROOZ make profit? We sell incredibly powerful weapons for only 500 yen.

75 The 12th Term Fourth Quarter Financial Results Presentation How does CROOZ make profit? In the case of Nekketsu Kouha Kunio-Kun (RENEGADE): An action game in which the player trains and strengthens the character to fight against enemies cooperatively with friends I could have won if I had this weapon. I ll go to the item shop and buy this weapon. With this weapon, I have become more powerful. I can now play more effectively! I could have won with this weapon, but I am not sure I want to pay for it. Fee income Revenue from selling items By introducing this game to a friend and having them register, I was rewarded with the item! To start User loses against the opponent Increase in users Users solicit friends to join With this weapon, I have become more powerful. I can now play more effectively! Point! CROOZ earns revenue from selling weapons that strengthen the character, and the reduction in the required training time of character, as well as other features

76 How large is the game software market Online games billion yen Nintendo 3DS / DS billion yen Mobile games 69.6 billion yen Social games 465 billion yen as of 2012 Playstation billion yen Wii/WiiU 31.5 billion yen 40.7 billion yen PS VITA PSP

77 The 12th Term Fourth Quarter Financial Results Presentation How large is the game software market? The social game market has grown to account for 465 billion yen in This means the market has grown far beyond that of Wii and PlayStation3 software seen in TV commercials. *Market sizes for the game software of each console are assumptions based on company calculations as of late January 2013.

78 What is the future outlook on market size? (100s of million yen) Online games 1,376 Nintendo 3DS/DS 1,332 Mobile games 696 PlayStation3 632 PS VITA/PSP 519 Wii/WiiU (Year)

79 The 12th Term Fourth Quarter Financial Results Presentation What is the future outlook on market size? Social games play a leading role in the game software market. Social games pulled in 465 billion yen in 2012, making them the undeniable kings of the game software market. The social game market will continue to grow, expected to reach nearly 600 billion yen in * Market information is estimated via company calculations as of late January 2013, based on material provided by the Mobile Content Forum and Mitsubishi UFJ Morgan Stanley Securities.

80 Are social games really profitable 1st place 2nd place 3rd place Brand Ranking: Number of times aired on TV commercials Mobage GREE Ameba 1,396 times 2,316 times 1,829 times 4th place 5th place 6th place 7th place SoftBank Mobile Aeon NTT docomo Uniqlo 1,239 times 1,154 times 1,025 times 1,004 times 8th place DeNA 894 times (Mobage excluded) 9th place McDonald s 867 times 10th place Daihatsu 772 times (MOVE)

81 The 12th Term Fourth Quarter Financial Results Presentation Are social games really profitable? In terms of the number of times TV commercials aired, Mobage ranks first and GREE ranks second. This indicates that in today s Japan, companies focusing on social games as a source of revenue, such as GREE and Mobage, are extremely active in respect to their presence on TV commercials. Today, social game providers are comparable to firms such as NTT DOCOMO and McDonald s, providing common services everywhere, which society cannot do without. *Kanto area data extracted from Video Research Comhouse Ltd. website, December 2012.

82 The 12th Term Fourth Quarter Financial Results Presentation Points to note The material herein contains mid-to-long-term plans and forecasts made by CROOZ. The information contained in these pages is not intended to guarantee the future business results of the company and bears certain risks and uncertainties. As business forecasts are affected by various factors and prone to change, we ask the reader to refrain from relying solely on the information presented herein.