Square Enix Holdings Nine Month Period Reference Materials: Fiscal Year Ending March 31, 2011

Square Enix Holdings experienced a significant contraction in financial performance during the nine-month period ending December 31, 2010. The primary purpose of this disclosure is to provide stakeholders with a transparent view of the company’s consolidated results and updated fiscal projections, reflecting a challenging period characterized by declining revenues and profitability compared to the previous year.

Financial data for the nine-month period indicates that net sales fell to 98.18 billion yen, a substantial decrease from the 135.43 billion yen reported during the same timeframe in 2009. Operating income dropped from 21.41 billion yen to 9.00 billion yen, while net income plummeted from 7.79 billion yen to 1.82 billion yen. These results underscore a period of volatility, with operating margins compressing from 16 percent to 9 percent. Consequently, the company revised its full-year forecasts for the fiscal year ending March 31, 2011, projecting net sales of 130 billion yen and a net income of only 1 billion yen, representing a sharp decline from the previous fiscal year’s performance.

The company attributes these results to the highly competitive nature of the global gaming market, where success is contingent upon navigating rapid technological shifts and evolving consumer preferences. Management emphasizes that future performance remains subject to external risks, including currency exchange fluctuations and the ability to maintain international market penetration. To address these challenges, the company outlined a strategic release schedule for the final quarter of the fiscal year, focusing on key titles across multiple platforms, including the Nintendo DS, PlayStation 3, Xbox 360, and the launch of the Nintendo 3DS. These efforts represent a concerted attempt to stabilize operations and regain momentum in a demanding industry landscape.