The Strategy of Overseas Business

- Acquiring Metaps Entertainment group

2021/3/8

Tokyo Stock Exchange First SectionCode 3676https://www.digitalhearts-hd.com/

Corporate Strategy behind the M&A

Completed building a foundation of developing Enterprise Business as our second earnings pillar.

Take next initiatives as our new growth strategy.

Entertainment Business

Established dominant market shares in domestic Debugging business with growth for years.

New initiatives of profit reforms in matured market.

Enterprise Business

As a 'Second Founding' period of the company, expanding the Enterprise Business such as System Testing by leveraging our core Debugging's base.

To be high-growth, high-profit with DX as a tailwind.

Overseas Business

New growth driver in the entertainment field.

To become the Comprehensive Localization Service provider by acquiring new capability through M&A.

New M&A

The Influence of Chinese-made Game

The Chinese game industry continues to grow rapidly and its influence on the global game market is expanding.

Size of game industry in China Number of game users in China

Approx. 6 Trn yen over 660 Mln people

Sales trend of Chinese-made games in overseas market

(Bln $) 18.00 16.00 14.00 12.00 10.00 8.00 6.00 4.00 2.00 0.00

2015

2016

2017

2018

2019

2020

*According to research by 4Gamer.net based on "the 2020 Chinese Game Industry Report" of GPC.

Metaps Entertainment Group :Businesses

DIGITAL HEARTS HOLDINGS will acquire Metaps Entertainment group who provides Chinese game companies with various marketing services for launching game titles in new overseas markets.

Main Business

1

Main Service

Online advertising (Internet advertising like SNS)Offline advertising (TV commercial and billboard)Influencer marketing

Main

Business IP Contents businesses 2

Provide Chinese game companies with supporting service entering to markets like Japan, Taiwan, Korea, Southeast Asia, etc.

Business matching related to IP (digital copyrights of games or characters) between Japanese licensors and overseas licensees.

Marketing support services

  • Strong relationship with some of major Chinese game companies.

  • Rich experience of TVCM and promotion for various well-known game titles.

    Supports a wide range of online and offline media such as SNS, TV, billboards.

    The group has approx. 10,000 influencer resources and covers over 1 billion followers.

  • Cross-border team familiar with the cultures and business practices in China and other Asian markets.

  • Rich experiences especially in Asian markets like Japan, Taiwan and others.

  • Flexibly to a wide range of requirements with offices in Tokyo, Shanghai, Taiwan, Hong Kong, and Singapore.

  • Other Asian markets are covered by its staff with various nationalities such as Indonesia, Thailand, and South Korea.

New Growth of Overseas Business

Aiming to be the Comprehensive Localization Service provider to support Chinese companies' overseas expansion by leveraging strengths of DIGITAL HEARTS group and Metaps Entertainment group.

Target

Chinese game makers

Chinese digital content / service provider

Comprehensive localization services

Various professional services of group companies with specialists

01

02

03

Services

Strengths of our group after acquisition and name of service providers

Translation / LQA

Over 250 translators with rich experience of video game titles Group companies

  • - DIGITAL HEARTS Co., Ltd. (Japan)

  • - DIGITAL HEARTS (Shanghai) Co., Ltd.

  • - Digital Hearts Linguitronics Taiwan Co., Ltd.

  • - Orgosoft Co., Ltd. (South Korea)

2D/3D graphic development

Over 100 creators and engineers Group company

- FLAME Hearts Co., Ltd. (Japan)

Marketing strategy support

Cross-border team familiar with Asian markets

Group companies

- Metaps Entertainment Limited and its seven group companies in Asia.

Advertising / Sales promotion

Own media "4Gamer.net" and strong relations with various media in Asia Group companies

- Aetas, Inc. (Japan)

- Metaps Entertainment Limited and its seven group companies in Asia

Online game operation support

Know-how based on rich experience Group companies

  • - DIGITAL HEARTS Co., Ltd.(Japan)

  • - FLAME Hearts Co., Ltd. (Japan)

  • - Orgosoft Co., Ltd. (South Korea)

Abundant multi-national human resources

Multi-national human resources familiar with the culture and business customs of various Asian countries including Japan and China

Aiming to be the Comprehensive Localization Service provider.

Stronger support with deeper local knowledge

  • Accumulate experience and further investigate each market for deep understanding of local needs.

  • Contribute to clients' business in target markets with multiple service and rich experience for each.

    Further M&AExpansion to U.S. and Europe

  • Acquire new functions and services in Asia and cover wider digital entertainment areas.

  • Expand the business and increase market share.

Establish business in rapid growing Asian market.

Develop new businesses foundation and enter to the U.S. and European markets.

Aiming to achieve sales JPY 5.0 Bln of Overseas Business

(ref) Structure of the Acquisition

To purchase 100% share of Metaps Entertainment Limited and to acquire total eight companies as Metaps Entertainment group.

Owns 51 of

100% subsidiary

100% subsidiary

100% subsidiary

shares

100% subsidiary

100% subsidiary

100% subsidiary

Financial results of Metaps Entertainment group (FY2020)

Net Sales

Approx. JPY 2.0 Bln

Acquire 100% share by stock purchasing

Metaps Entertainment Limited

(Holding company)

(ref) Schedule

Date of conclusion of the stock purchase agreement: March 8, 2021 Date of the stock acquisition: March 29, 2021 (Scheduled)

Operating income

Approx. JPY 0.2 Bln

Contact

Investor and Public Relations Division

Phone:+81‐3‐3373‐0081

Emailir_info@digitalhearts.com HPhttps://www.digitalhearts-hd.com

This presentation has been developed strictly for the purposes of investor relations activities and does not in any way attempt to influence or facilitate investment decisions or represent a solicitation for investment. While the information provided herein is based on that believed to be reliable at the time of submission, the Company does not guarantee its accuracy, be it partial or overall. Furthermore, because this presentation features the views and assessments of the Company at the time of its writing, it may therefore be subject to change without prior notice due to unforeseen developments in the Company's operating environment. The Company and its affiliated companies, as well as their executive officers, may hold positions in the securities and/or financial products featured in this presentation, and may stand to profit or incur losses from their positions. The relevant parties may also purchase or sell securities and/or financial products, either in person or by proxy. This presentation is protected under exclusive copyright of the Company. To quote, reproduce or transfer any section, either partially or in its entirety, is prohibited by law. Those who wish to quote from, reproduce or transfer the information contained herein must therefore acquire in advance the written consent of the copyright holder.

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Hearts United Group Co. Ltd. published this content on 08 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 March 2021 07:02:01 UTC.