Sega Sammy : INTEGRATED REPORT 2021 (2/3)

Entertainment Contents

Entertainment Contents Business

In addition to drawing on our abundant IP assets to roll out content globally, the Group will work to expand business value by taking advantage of our broad business portfolio.

External Environment

The global game content market continues to grow against the backdrop of rising download sales and the proliferation of game distribution platforms. Amusement Machine Sales and Amusement Center Operations market have been in a recovery trend due to steady performance of prizes and other factors, but these sectors were subsequently hard hit by the outbreak of COVID-19.

Business Overview

Ensuring steady earnings through expansion across a range of areas

SEGA SAMMY's Entertainment Contents Business has expanded into various entertainment domains, each of which presents different market growth potential and levels of competition. Leveraging its well-balanced portfolio, the Group is generating stable income without relying excessively on any specific IP, title, or business activity.

Game Content Market Size

(Trillions of yen)

													1		1
10							1						3
										2
		1					2					3		4
		2					3
		3					4					5		5
		3
		1					2					2		2
	'15						'16			'17			'18
Japan			Asia		N. America		Europe			Others

					24
					2
	2	2	2	2	4
	4	4
	4
1	3	6
3	5	5	5	5
4
	7	7	8	8	9
6
2	2	2	2	2	3
'19	'20	'21	'22	'23	'24	(FY)
		(Forecast)	(Forecast)	(Forecast)	(Forecast)

Consumer Area

We will expand the scale of profits by digging deeper into key existing IPs and developing them globally.

To capitalize effectively on our abundant IP assets, including dormant titles, we will further develop these IPs by means of remasters, remakes, and reboots, etc., as well as offers them to subscription-based services.

Virtua Fighter 5 Ultimate Showdown

©SEGA

Source: SEGA SAMMY estimates based on data from Newzoo Global Games Market Report (June 2021) (US$1=¥110)

Domestic Amusement Machine Sales and Revenues from	Number of Amusement Facilities and
Amusement Facilities Operations	Amusement Machine Units Installed
(Billions of yen)

								403,553	377,825	362,099	354,463	349,835	340,383	342,211
456.4	422.2	433.8	462.0	485.9	520.1	540.8		5,439	4,856	4,542	4,381
		4,193	4,022	3,931
175.0	161.1	156.9	157.4	152.9	161.7	164.7
2013	2014	2015	2016	2017	2018	2019	(FY)	2014	2015	2016	2017	2018	2019	2020	(CY)

	Amusement machine sales		Revenues from amusement facilities operations		Number of amusement facilities		Number of amusement machine units installed
Source: Japan Amusement Industry Association	Source: National Police Agency

Yakuza: Like a Dragon

©SEGA

Amusement Machine Sales Area

By streamlining the product lineup, we will optimize business scale and shift development resources to the Consumer area, a growth area, and aim to improve return on investment by focusing on strong-performing prize categories.

StarHorse4

Anticipated Opportunities and Risks

Responses

©SEGA

Opportunities

Ongoing growth in the game content market

The market for game content is expanding on the back of growth in Western and Asian markets. In addition, with the advent of various game distribution platforms and the increase in download sales, the potential for further growth is expanding.

Risks

Rising development costs

The development costs of game content are on the rise due to the response to the new technologies and the longer development periods required. There is a risk of not being able to realize expected returns on investment.

Expanding touch points with users

Strengthening global roll-out

Multiplatform support

Multilingual support

Prolonging product life cycles

Utilizing IP assets

Strengthening the digital sales

Multichannel monetization

Animation and Toys Area

In the Animation area, in addition to producing animations of our major IPs, such as Detective Conan, Anpanman, and LUPIN THE 3rd, the Group is focusing on the animation licensing and merchandising businesses.

The Toys area is expanding to encompass a broad target audience, including mainstay educational toys, character goods, and products for adults.

Strengthening user engagement

Community management

Strengthening the mix of media

Detective Conan the Movie The Scarlet Bullet

©2020 GOSHO AOYAMA/DETECTIVE CONAN COMMITTEE All Rights Reserved.

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SEGA SAMMY HOLDINGS

INTEGRATED REPORT 2021

37

Achievements in FY2021/3

To Be a Global Leading Contents Provider

Consumer Area

New full game* titles were released, including Western versions of Persona 5 Strikers and YAKUZA: LIKE A DRAGON, as well as Football Manager 2021. Coupled with brisk sales of

Entertainment Contents Business Performance

Outlook Going Forward

repeat titles, this resulted in a total of 41,770 thousand units sold (compared with 28,570 thousand units sold year on year). Newly released F2P* titles, including Re:ZERO -StartingLife in Another World- Lost in Memories and HATSUNE MIKU: COLORFUL STAGE!, also performed well alongside existing titles.

*The Consumer area is divided into the following three business models.

Full games	Mainly disc-based and download sales of full games for home video game consoles and PCs.
(Sales of additional download content are not included.)
F2P	Mainly free-to-play based game content along with item-based sales, etc., mostly for smartphones
and PCs.
Other	Sales of additional download content, consignment sales of other companies' titles, contract
development, title transfer, bundled titles for platformers, sales of products other than game software.

FY2021/3 (Results)

Net sales: ¥135.7 billionOperating income: ¥31.4 billion

247.6
	217.8
	12.8
6.5
16.2	27.9
2020	2021	(FY)

Net sales (Billions of yen) 

Ordinary income (Billions of yen)

Ordinary income margin (%)

We are positioning the Consumer area as a growth business for the Group, with a strategic focus on the global development of key existing IPs. To this end, we are pursuing initiatives such as expanding touch points with users, prolonging product life cycles, and strengthening user engagement. We will also cultivate the F2P games for smartphones in domestic market, amusement machines, etc., into businesses that can secure stable earnings.

In the fiscal year ending March 2022, we expect to see a drop off in repeat sales in the Consumer area following an upswing in the previous fiscal year. In the Amusement Machine Sales area, we expect to improve profitability through fixed cost reductions.

PHANTASY STAR ONLINE 2 NEW GENESIS

©SEGA

FY2021/3 (Results)

Net sales:	¥217.8 billion
Operating income:	¥27.9 billion
Ordinary income:	¥27.9 billion

FY2022/3 (Forecast) Net sales:

¥213.0 billion

Operating income:

¥23.0 billion

Ordinary income:

¥25.0 billion

Consumer Area

For full games, we anticipate a drop off in repeat sales following an upswing in the previous fiscal year, as well as higher costs due to an increase of new titles. Meanwhile, in F2P, we have started the global roll-out of PHANTASY STAR ONLINE 2 NEW GENESIS.

FY2022/3 (Forecast) Net sales:

¥140.0 billion

Operating income:

¥21.0 billion

Persona 5 Strikers	HATSUNE MIKU: COLORFUL STAGE!
©ATLUS. ©SEGA. / ©KOEI TECMO GAMES. All rights reserved.	© SEGA/© CP/© CFM

Amusement Machine Sales Area, Amusement Center Operations Area

HUMANKINDTM	Total War: WARHAMMER III	Shin Megami Tensei V
©Amplitude Studios 2021.	©Games Workshop Limited 2021.	©ATLUS. ©SEGA. All rights reserved.
©SEGA.	Published by SEGA.

In the Amusement Machine Sales area, we chiefly sold mainstay products such as the UFO Catcher® crane game series and prizes for these games. In the Amusement Center Operations area, in line with the transfer of shares of a subsidiary engaged in amusement facilities operations at the end of December 2020, results from the subsidiary were excluded from consolidated reporting from the third quarter of fiscal year 2021.

FY2021/3 (Results)  * Amusement Machine Sales Area Performance

Net sales: ¥35.7 billion Operating loss: ¥1.6 billion

Animation and Toys Area

Performance in the Animation and Toys area remained solid. In Animation, although COVID-19 caused a delay in the release of the film Detective Conan the Movie The Scarlet Bullet, a special omnibus film taken from the Detective Conan TV animation series, Detective Conan: The Scarlet Alibi, was released. We also recorded revenues from other animation production and distribution. In Toys, alongside mainstay products, we sold new products such as Fun to change mouse covers! Sumikkogurashi Personal Computer Plus.

FY2021/3 (Results)

Net sales: ¥23.2 billionOperating income: ¥2.1 billion

Initial D THE ARCADE

© Shuichi Shigeno/KODANSHA All Rights Reserved © SEGA

All manufacturers, cars, names, brands and associated imagery featured in this game are trademarks and/or copyrighted materials of their respective owners. All rights reserved.

The trademarks Porsche, Porsche Crest, Porsche Logotype, Carrera and 911 are used under license of Porsche AG.

Detective Conan: The Scarlet Alibi

© Gosho Aoyama / Shogakukan/YTV/TMS 1996

Amusement Machine Sales Area

We plan to improve profitability due to the effect of fixed cost reduction through structural reform. We also plan to release mainstay products such as the UFO Catcher® crane game series and prizes for these games as well as new products.

UFO CATCHER 9 third

©SEGA

FY2022/3 (Forecast)

Net sales: ¥43.0 billion 

Operating income: ¥1.7 billion

Animation and Toys Area

In Animation, Detective Conan the Movie The Scarlet Bullet has been a hit and we expect to record revenue from other animation production and distribution as

well. In Toys, we will continue to sell new and mainstay products.

	Detective Conan the Movie
Demon Slayer POD	The Scarlet Bullet
©KoyoharuGotoge/	©2020 GOSHO AOYAMA/
SHUEISHA, Aniplex, ufotable	DETECTIVE CONAN COMMITTEE All Rights Reserved.

FY2022/3 (Forecast)

Net sales: ¥26.5 billion

Operating income: ¥1.8 billion

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SEGA SAMMY HOLDINGS

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39

Pachislot and Pachinko Machines

Pachislot and Pachinko Machines Business

As an "innovator in the industry," SEGA SAMMY will launch new initiatives and strive to generate stable profits by enhancing profitability.

External Environment

Business Overview

The Pachislot and Pachinko Machines Business draws on a powerful IP lineup and industry-leading development capabilities to supply products that meet the demands of a diverse fan base. We are working to develop and market machines with innovative gameplay that will help bring vitality to the market for both pachislot and pachinko machines. We are also seeking to lower costs and environmental impact through measures centered on component reuse.

Along with the slow decline of the player population since 1995, there has been a long-term downtrend in the overall number of pachinko halls, as well as in the number of machines installed and in annual machine turnover. On the other hand, the opening of large halls and an increase in locations of major hall operators has caused a rise in the number of machines installed per store.

	Numbers of Pachinko Halls and Installed Pachislot and
Market Size and Number of Pachislot and Pachinko Players	Pachinko Machines per Pachinko Hall
17.40		443.3
	14,674	336.5
52.2		9,035
	7.10
40.6
32.3

A powerful IP lineup and

strong development capabilities

SAMMY has an IP lineup that boasts strong brand aware- ness, led by titles in the popular Hokuto No Ken series.

Sammy's Strengths

Multiple well-performing series

P Shin Hokuto Muso Chapter 3

©Buronson & Tetsuo Hara／NSP 1983

Approved No.KOJ-111

©2010-2013 Koei Tecmo Games Co., Ltd.

©Sammy

Pachislot ANEMONE Psalms of Planets Eureka Seven HI-EVOLUTION

©2018 BONES/Project EUREKA MOVIE ©BANDAI NAMCO Sevens Inc. ©Sammy

14.6

'03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18 '19 '20 (CY)

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

'18

'19

'20

(FY)

	Pachislot and pachinko market (trillions of yen)		Other leisure markets (trillions of yen)		Number of pachinko halls (halls)
		Pachislot and pachinko players (millions of people)				Number of installed pachislot and pachinko machines per pachinko hall (units)
Source: White Paper on Leisure Industry 2021, Japan Productivity Center	Source: National Police Agency

	Number of	Cumulative unit
Series	titles in series	sales
Hokuto no Ken	35	Approx. 2,990,000 units

	Number of	Cumulative unit
Series	titles in series	sales
Hokuto Muso	7	Approx. 210,000 units

Pachislot and Pachinko Machines: Number of Installed Machines, Unit Sales, and Annual Turnover

1.19

5,833

4,896

4,004

0.33

1,341

Pachislot and Pachinko Machine Approval Process

When marketing a new pachislot or pachinko machine, manufacturers are required to go through multiple step licensing processes in accordance with the Entertainment Establishments Control Law.

1.

Application for

Security Communications

Machine

prototype testing

Association

2.

Prototype testing

manufacturer

results issued

3.

Application for

Public Safety Commission

installation approval

in each prefecture

4.

Installation

approval issued

8. Start of

5. Contract and

ALADDIN	14	Approx. 560,000 units
Beast King	15	Approx. 510,000 units
SOUTEN-NO-KEN	13	Approx. 480,000 units
Note: As of March 31, 2021

	Eureka Seven	6	Approx. 160,000 units
〈Monogatari〉Series	11	Approx. 140,000 units
	Code Geass	3	Approx. 60,000 units

'03

'04

'05

'06

'07

'08

'09

'10

'11

'12

'13

'14

'15

'16

'17

'18

'19

'20

(FY)

Number of installed pachislot and pachinko machines (thousands of machines)

Pachislot and pachinko machine unit sales (thousands of machines)

Annual turnover (times)

Source: National Police Agency and Yano Research Institute Ltd. "Pachinko Manufacturer Trends 2021"

product delivery		Pachislot or Pachinko halls			operations
6. Application for approval		7. Final authorization

District police station

For more information on market data, see pages 77-78.

Lowering costs and raising profitability

Pachislot and pachinko businesses are characterized by a reliance on electronic components that carry a high cost ratio. The Group is working to raise development efficiency and lower costs, such as through the reuse of materials.

Value Chain of the Pachislot and Pachinko Machines Business

Anticipated Opportunities and Risks

Responses

Opportunities

Possibility of expanding user base

As the scope of development has expanded due to changes in regula- tions, machines conforming to the new regulation may expand the user base.

Growing demand for new regulation machines

If new regulation machines win the support of users, we can expect greater demand and an increase in the player population.

Risks

Decline in the player population

The decline in the player population may undermine the purchasing power of hall operators and affect unit sales volume.

Loss of users due to new regulation machines

New regulation machines may fail to win broad acceptance among users, accelerating the decline in the player population.

Risk of approval status

The approval rate*, which has

remained at a low level due to the recent revision of regulations, may have a significant impact on sales.

• The rate of obtaining successful prototype testing results in the pachislot or pachinko machines licensing process.

Component risk

There is a risk of losing sales opportunities due to the inability to procure components.

Create hit machines

Revise the product lineup Increase hit potential Enhance media functions

Improve business efficiency

Raise development efficiency Lower costs

Promote online commerce

1 Average development lead time:	1	2	3		4
1 year-2.5 years
3 Average sales lead time:	Development	Manufacturing		Sales		Operations
1 month-
In-house  Outsourcing
		Component reuse		Collection of trade-ins
									Lower component costs
				Sourcing materials
						Lower environmental impact
				through disassembly, etc.

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SEGA SAMMY HOLDINGS

INTEGRATED REPORT 2021

41

Achievements in FY2021/3

Build a Stable Earnings Structure

New machines launched during the year included Pachislot Hokuto no Ken Shukumei and P Shin Hokuto Muso Chapter 3. Performance was impacted by factors including the shuttering of pachinko halls amid the COVID-19 pandemic,

Pachislot and Pachinko Machines Business Performance

108.5

Outlook Going Forward

however, with full-fledged sales activities only resuming in the second half and the deadline for removing previous regulation machines getting pushed back, weakening demand for new regulation machines. As a result, we sold 35,000 pachislot units (down from 123,000 units a year earlier) and 69,000 pachinko units (down from 104,000 units). As a result of booking a valuation loss, largely on components, the Pachislot and Pachinko Machines Business recorded an operating loss for the first time.

Pachislot Hokuto No Ken Shukumei

©Buronson & Tetsuo Hara/COAMIX 1983, ©COAMIX 2007 Approved No.YRG-121 ©Sammy

53.1

22.7

20.9-11.3

	-
2020	2021	(FY)

Net sales (billions of yen)

Ordinary income (billions of yen)

Ordinary income margin (%)

We have started to roll out pachislot and pachinko machines that comply with new regulations. We are revising the product lineup and creating machines from a thoroughly user-centric perspective, centering on series machines that offer greater hit potential. We are also working to improve business efficiency, including raising development efficiency and lowering costs.

The deadline for removing previous regulation machines falls in the fiscal year ending March 2022. We will work to meet replacement demand by launching new titles, including mainstay titles, and recover profitability. Although we project lower fixed costs in line with recent structural reforms, we also anticipate higher advertising expenses and other operating costs due to factors including an influx of newly launched titles and the lifting of restrictions on TV advertising.

FY2021/3 (Results)

Net sales:	¥53.1 billion
Ordinary loss:	¥11.3 billion

FY2022/3 (Forecast)

Net sales:

¥89.0 billion

Ordinary income:

¥9.0 billion

Pachislot CODE GEASS Lelouch of the Rebellion 3

©SUNRISE／PROJECT GEASS Character Design ©2006 CLAMP・ST ©SUNRISE／PROJECT GEASS Character Design ©2006-2008 CLAMP・ST ©SUNRISE／PROJECT G-AKITO Character Design ©2006-2011 CLAMP・ST

©BANDAI NAMCO Sevens Inc. ©Sammy

Market Environment under Revised Regulations

Pachislot and Pachinko Machine Unit Sales	Market Share of Pachislot and Pachinko Machines
301		24.3
207	21.7	21.9
202

The need to replace pachislot and pachinko machines under revised regulations will cause a temporary downswing in the number of installed machines and in turnover. In such cases, however, the launch of hit machines typically tends to drive recovery. When pachislot regulations were last revised, the subsequent appearance of hit machines boosted the purchasing motivation of hall operators and fueled improvement in turnover.

142	215	15.3	16.8	14.8
		14.7
				14.1

		241					12.0			11.6
		85	67	123	9.8	10.5		9.9	10.9
216		9.0
200	199
			8.7				8.0
				159
		138	140							7.4

Pachislot  Market environment and changes in regulations

Previous regulations (1)

(No. 4 models) to 2004 (three-year transition period)

Previous regulations (2)

(No. 5 models) 2004-Feb. 2018 (four-year transition period)

New regulations

Turnover, increase (No. 6 models) Feb. 2018-present

in installed machines

PachinkoMarket environment and changes in regulations

to 2004 (three-year transition period)

2004-Feb. 2018 (four-year transition period)

Turnover

Feb. 2018-present

104

35

69

'13

'14

'15

'16

'17

'18

'19

'20

'21

(FY)

'12

'13

'14

'15

'16

'17

'18

'19

'20

(FY*)

Pachislot machine unit sales (thousands of units)

Pachislot machines (%)

Pachinko machines (%)

Pachinko machine unit sales (thousands of units)

* Settlement dates from July to June

Source: Yano Research Institute Ltd. "Pachinko Manufacturer Trends 2021"

Pachislot The Seven deadly Sins

©Nakaba Suzuki,Kodansha/The Seven Deadly Sins Project,MBS

©Nakaba Suzuki,Kodansha/The Seven Deadly Sins TVSP Project, MBS

Major Titles Sold in FY2021/3

©Nakaba Suzuki,Kodansha

©Sammy

		Month Delivered	Unit sales
Pachislot	Pachislot Hokuto No Ken Shukumei	March 2021	17,456
	Pachislot The Seven deadly Sins	November 2021	6,207
	Pachislot Initial D	January 2021	5,369
Pachinko	P Shin Hokuto Muso Chapter 3	December 2020	43,901
	P Psalms of Planets Eureka Seven
	HI-EVOLUTION ZERO	August 2020	10,223
	P〈Monogatari〉Series
	Secondseason	February 2021	6,560

P Psalms of Planets Eureka Seven HI-EVOLUTION ZERO

©2017 BONES/Project EUREKA MOVIE ©BANDAI NAMCO Entertainment Inc. ©Sammy

2004 revision of

2004 revision of

regulations (tightening)

2008 relaxation

regulations (relaxation)

of regulations

'00

'02

'04

'06

'08

'10

'12

'14

'16

'18

'20

'00

'02

'04

'06

'08

'10

'12

'14

'16

'18

'20

	Number of installed pachislot machines		Number of installed pachinko machines
		Pachislot machine annual turnover			Pachinko machine annual turnover
Source: National Police Agency and Yano Research Institute Ltd. "Pachinko Manufacturer Trends 2021"	Source: National Police Agency and Yano Research Institute Ltd. "Pachinko Manufacturer Trends 2021"

Major Titles Sold to Date in FY2022/3

		Month Delivered
Pachislot	Pachislot Angel Beats!	April 2021
	Pachislot GAMERA	June 2021
Pachinko	P Kabaneri of the Iron Fortress	April 2021
	P Hokuto No Ken 8 Kyuseishu	May 2021
	P Cho Hane Beast King	June 2021
	P SOUTEN-NO-KEN Tengoku	July 2021	Pachislot GAMERA	P Hokuto No Ken 8 Kyuseishu
			©KADOKAWA ©Sammy	©Buronson & Tetsuo Hara/COAMIX 1983,
				©COAMIX 2007 Approved No.YTA-212
				©Sammy

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SEGA SAMMY HOLDINGS

INTEGRATED REPORT 2021

43

Resort Business

To make the Resort Business a pillar of the Group over the medium to long term, we are building up our know-how in the integrated resort business in parallel with strengthening the profitability of existing resort facilities.

External Environment

Concrete moves toward the opening of an integrated resort in Japan.

The Integrated Resort Development Bill, which includes casinos, was enacted in July 2018, and moves toward the establishment of an integrated resort, which the government regards as essential for Japan to become "a tourism-oriented country," are gaining momentum.

Candidate locations and operators will be selected in the future.

Anticipated Opportunities and Risks	Responses

Business Overview

Through the operation of resort facilities, the Group is working to acquire development and operational expertise to enter the integrated resort field in Japan.

Phoenix Seagaia Resort

Japan's leading resort complex

Phoenix Seagaia Resort offers Japan's finest resort stays, taking

advantage of an ideal environment-such as three accommodation

facilities including the Sheraton Grande Ocean Resort, a world-class

convention center that can hold up to 5,000 people, as well as Phoe-

nix Country Club, one of Japan's preeminent golf courses, and a

Opportunities

Commercialization of a domestic IR business

If integrated resorts are realized in Japan in the future and our group's entry into the market is realized, there is a strong possibility that this business will become a major revenue source.

Risks

Risks of entering into domestic IR business

Delays in legislation related to integrated resorts will have a major impact on our group's long-term scenario. There is also a risk that investment may not be recovered unless the Company is selected as a business entity.

Risks associated with response to addiction issues

Neglecting to respond adequately to addiction issues and other social issues could expose the Group to social criticism or render sustained development of the industry impossible.

Acquisition of know-how for the success of IR business

Deployment of personnel to PARADISE CITY

Development and operation of resort facilities

Addiction countermeasures

For details see page 49.

Acquired gaming machine manufacturer and distribution licenses in Nevada.

tennis club-all surrounded by a vast, nearly 700-hectare grove of
Japanese black pines spreading roughly 11 kilometers north-south
along the coast of the Pacific Ocean in Miyazaki Prefecture. By
continuously improving the value of the facilities, the Group is work-
ing to strengthen its ability to attract customers while accumulating
know-how in the operation of resort facilities.	©Phoenix Resort
	The North Country Golf Club
	(Chitose, Hokkaido)
	As part of its activities to promote sports and contribute to the com-
	munity of Chitose City, the Company runs Sega Sammy Cup Golf
	Tournament and operates it as a facility for snow activities, North
	Snowland in Chitose, in winter.

Achievements for FY2021/3

The number of facility users at Phoenix Seagaia Resort continued to fall sharply due to the impact of COVID-19, declining 34.3% year on year. However, there were signs of recovery in individual demand, such as an increase in facility users of 10% year on year in October and November 2020, buoyed by the Go to Travel campaign. In addition, the business incurred expenses related to its move into the domestic Integrated Resort (IR) market. Overseas, PARADISE CITY, operated by PARADISE SEGASAMMY Co., Ltd. (affiliate accounted for using the equity method) saw substantial declines in the drop amount (amount of chips purchased by customers at the table) and

the number of guests in January to December 2020, with year-on- year declines of 66.2% and 54.5%, respectively, due to the impact of COVID-19 and other factors.

• Results for PARADISE SEGASAMMY Co., Ltd. are posted with a three-month delay due to a December fiscal year-end

FY2021/3 (Achievements)

Net Sales: ¥6.3 billion Ordinary loss: ¥8.9 billion

PARADISE CITY

South Korea's first IR facility

PARADISE CITY, operated by PARADISE SEGASAMMY Co., Ltd., a joint venture with the PARADISE GROUP of South Korea, is the first

Outlook Going Forward

IR facility in South Korea with hotels, casinos, commercial facilities, convention halls, and clubs. We aim to be the top IR facility in North-

We forecast a moderate recovery at the Phoenix Seagaia Resort on the back of stepped-up measures aimed at individuals, while losses at PARADISE CITY are likely to narrow as travel restrictions ease.

Future IR Business Strategy

The Company needs to review its IR business strategy following the City of Yokohama's decision to call off its selection process for IR operators. However, we are confident that the Company is now one of Japan's top companies in the IR field after accumulating various expertise and know-how through sustained investment in the IR business over many years. We plan to continue seeking opportunities to participate in IR projects in order to capitalize on this expertise.

east Asia by providing high-quality space and services, and are accumulating development and management know-how with a view to entering the IR business in Japan.

©PARADISE SEGASAMMY Co., Ltd. All rights reserved.

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