Earnings Presentation for the Third Quarter of the Fiscal Year Ending March 31, 2014: Question & Answer Session (Summary)

Fields Corporation held a financial presentation on the third quarter of the fiscal year ending March 31, 2014 in OTEMACHI 1st SQUARE CONFERENCE (Chiyoda-ku, Tokyo) on February 5, 2014 (Wednesday) at 11:30 am.
This page provides an overview of the main Question & Answer Session (Summary) at the financial presentation.

Question & Answer Session (Summary)

(February 5, 2014)

Q1. Fields plans to sell 1 title from the Mizuho Corp. brand in the fourth quarter of this fiscal year, and I understand that this is a machine from Universal Entertainment Corporation’s mainstay series.
Does Fields plan to market more of such pachinko/pachislot machines in the future, in addition to releasing products with new added value, which was the initial objective of this business tie-up?

A1. “ANOTHER GOD HADES” was not part of the initial plan for the business tie-up, but the proposal was made during our negotiations with Mizuho Corp. and after serious consideration within the Company, we made the decision to market this product.
We aim to create pachinko/pachislot machines with new added value with Mizuho Corp. from a foundation of innovative technology and high-quality intellectual property (IP). We have not decided to handle any other their series titles at this point. Going forward, we will continue to form business tie-ups across a wide range as we strengthen relationships with Mizuho Corp. to invigorate the industry.

Q2. How many machines of “Evangelion—Ketsui no Toki” have been sold?

A2. The “Evangelion—Ketsui no Toki” is a “Normal type”, and given that “AT type” and “ART type” machines currently account for an ever-increasing share of the pachislot market, this is not a pachislot machine that would be introduced in large volume early on.
This title has excellent game functions and entertainment value, and we can envision additional orders depending on its use after it is installed, so at this point we have no comment on the number of machines sold.

Q3. What is your forecast for Tsuburaya Productions’ contribution to income going forward?

A3. Tsuburaya Productions Co., Ltd. became a consolidated subsidiary of the Group in April 2010 and resolved its excess debt in the third quarter of this fiscal year so that it is able to make a new start now.
From here on, Tsuburaya Productions will carry out various measures with partner companies, such as rebuilding its foundation so that it can expand overseas, while also enhancing its brand value further with a new TV series.

Q4. You predict that pachinko sales will decline and pachislot sales will be flat in this fiscal year.
What are your predictions for the next fiscal year?

A4. In the pachinko sales market, we note a tendency for customers to curb initial introduction of new titles, while instead placing additional orders for mainstay products. If this stance continues in the next fiscal year, a significant increase in the number of machines sold would be unlikely.
At the same time, given the current high interest in buying and the significant room for novelty in the pachislot sales market, we expect the number of pachislot machines sold to be about the same in the next fiscal year as in this fiscal year.

Q5. Pachislot sales tend to be concentrated in the fourth quarter, but is there competition between the affiliated brands? In addition, will the product lineup be leveled out across the quarters?

A5. Pachislot sales have been concentrated in the fourth quarter over the past 2 fiscal years, and we would like to level out the product lineup in the future.
Each of our affiliated brands has different concepts and game functions, and even if the products sold are concentrated in a particular period, we provide detailed proposals for each title to pachinko halls. We are also attempting to augment sales offices and sales staff to reinforce our sales operating system.

Q6. Are you seeing any effect from the increase in sales staff?

A6. We hired about 100 sales staff members in this fiscal year, but currently the new staff members who are fresh out of college are focusing on building a foundation to facilitate high-density sales operations by building relationships with customers while also enhancing their knowledge of pachinko halls. After a year of this, in April 2014, they will be assigned to specific pachinko halls and begin their sales activities. We expect they will need a little more time until they can balance sales of pachinko/pachislot machine sales with customer support, but we are confident that this will surely lead to a stronger sales operating system.