Q1 FY2012 Operating Results

DeNA Co., Ltd.

Q1 FY2012 Highlights

 Revenue*:

47.6 billion yen (+37% YoY) Operating Profit: 18.4 billion yen (+22% YoY) the guidelines established by the Social Game Platform Liaison Council, including countermeasures against real-money trading (RMT), monthly spending limits for young users and terminating usage of the complete gacha game mechanic.

 Took measures to improve Mobage Japan user environment based on

 Moba-coin consumption grew while implementing above measures.  As of August 9, Rage of Bahamut, developed by Cygames, Inc., and
provided on Mobage West, has been in the number one spot on U.S. Google Play’s top grossing chart for 17 consecutive weeks; the title also reached number one position on the U.S. Apple App Store’s top grossing chart and maintained a high ranking.
*DeNA adopted International Financial Reporting Standards (IFRS) as of Q1 FY2012. The year-on-year changes are based on the FY2011 figures restated in accordance with IFRS. 1

Overview of Consolidated Financial Results
IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS.
(Unit: Billion yen)

Item

Q1 FY2012

Q1 FY2011

YoY change

Q4 FY2011

QoQ change

Revenue

47.6 18.4 18.1 10.0

34.6 15.0 15.7 8.3

+37% +22% +15% +20%

42.8 17.6 17.9 9.4

+11% +5% +1% +6%

Operating profit

Profit before tax
Profit for the period attributable to owners of the parent

Major factors affecting FY2011 operating profit figure due to change in financial accounting standards Positive: Termination of goodwill amortization (2.6 billion yen) Negative: Part of acquisition costs of overseas subsidiaries originally booked as goodwill under Japanese GAAP was recorded as expense under IFRS (3.6 billion yen) Negative: Consolidation timing difference (2.1 billion yen) The total impact for FY2011: -3.1 billion yen, Q1 FY2011: -800 million yen, Q4 FY2011: -1 billion yen

2

Revenue, Operating Profit and Margin by Segment

Revenue
(Billion yen)

Operating Profit and Operating Profit Margin
47.6
42.8 200 20
(Operating Profit: Billion yen)
Operating profit Operating profit margin

(Operating Profit Margin : %)

500 50

17.6

18.4
60 50

400 40

34.6

34.7

34.3

150 15

15.0
43.4

14.7
42.5

12.9
37.7

41.0

300 30 100 10 20 200 5 50 100 10 00 0 0

38.6

40 30 20 10 0

Q1

Q2

Q3

Q4

Q1 FY2012

Q1

Q2

Q3 FY2011

Q4

Q1 FY2012

FY2011

*IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS.

3

Cash Flows

(Unit: Billion yen) Item Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Cash and cash equivalents at the end of quarter Q1 FY2012 Q1 FY2011 YoY change

6.0 -3.7 1.8 58.4

-4.1 -2.1 -5.4 49.3

+10.0 -1.6 +7.2 +9.1

*IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS.

4

Social Media Business
(Billion yen)

Revenue
41.5 38.5
2.8 2.2 Others Advertising Banner ads, tie-up ads, ads matched to content/search, affiliate advertising (other companies' media), etc. Avatar-related Everystar, etc.

31.0
3.7

30.9
3.3

30.5
3.1

39.3 35.7 27.3 27.6 27.4

Game-related

Item billing, in-game ads, developer advertising, mixi mobile applications (ad/payment programs), overseas business, etc.

*Revised as of Aug 10, 2012 Items Social Media Business Revenue Total Q1 FY2011 Game-related Revenue Social Media Business Revenue Total Q4 FY2011 Game-related Revenue

(Billion yen) Before Revised 32.0 31.0 28.3 27.3 38.6 38.5 35.8 35.7

Q1 *

Q2 Q3 FY2011

Q4 *

Q1 FY2012

Note 1: IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS. 2: The above figures are prior to consolidation eliminations.

5

E-commerce Business
(Billion yen)

Revenue

4.0 3.6
0.1

3.7
0.1

3.8
0.2

3.9
0.2 Others

0.2

1.2 1.2 1.2

1.1

1.1

MOBAOKU 1.2 bidders

Paying members : 1.09 million (as of Jun 30, 2012)

1.4 1.3 1.3

1.2

Transactions handled: 10.5 billion yen (+3.6% YoY) Shops: 4,056 (as of June 30, 2012)

1.0

1.1

1.2

1.3

1.4

PAYGENT

Payment processing volume continues to grow steadily

Q1

Q2 Q3 FY 2011

Q4

Q1 FY 2012

Note 1: IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS. 2: The above figures are prior to consolidation eliminations.

6

Mobage Japan: Moba-coin Consumption Trends
 Coin consumption increased quarter-on-quarter despite the termination of complete
gacha game mechanics, adoption of monthly spending limits for young users and implementation of other measures to improve the user environment.

 Monthly coin consumption remained consistent even after the implementation of abovementioned measures began in May.

 Moba-coin consumption on smartphones in July reached approximately 44% of total coin
consumption. Moba-coin Consumption* (Japan only)
(Billion Moba-coins)

Quarterly
First- and Second-party 内製・協業 Third-party オープン

Monthly
(Billion Moba-coins)

60 600 50 500 40 400 30 300 20 200

51.1

54.1

20 200 15 150

17.7

18.4

18.0

18.3

33.4

37.0

40.9

10 100

5 50

10 100 0
0

1Q

2Q

3Q

4Q

1Q

4月 Apr

5月 May

6月 Jun

7月 Jul

FY2011

FY2012

FY2012 7

* Includes consumption of Moba-coins, monthly membership service fees for social games and ticket sales

Mobage Japan: Q2 FY2012 Moba-coin Consumption Forecast

 Status of Guideline Adaption
Guidelines Termination of complete gacha Termination of complete gacha-like mechanics, etc. Clear in-game display 1st- and 2nd- party
Implemented by end of May Mostly implemented by June 22, completed implementation by end of June Implementation started at beginning of June and mostly completed as of today

3rd-party
Implemented by end of June Implemented by end of June To be implemented by end of August

 Moba-coin consumption in first- and second-party titles showed no drop after
implementing above guidelines; similar performance is expected for third-party titles.

 Coin consumption will be accelerated by integrating new game elements into
existing titles and releasing new titles

Q2 FY2012 Moba-coin consumption forecast:

55 billion Moba-coins (+ Appx. 1 billion QoQ)
8

User Environment Improvement
The preparation committee chaired by Masao Horibe, Professor Emeritus at Hitotsubashi University, has met to establish a tentatively-named Liaison Council on Improvement of Environment for Social Game Users. The initiative was led by the Social Game Platform Liaison Council, which has determined a set of social gaming guidelines.

 Initiatives by Preparation Committee
• Lead discussion among experts and industry members to establish an appropriate environment for social game users Aim to form a tentatively-named Liaison Council on Improvement of Social Game Users’ Environment in October 2012

By forming working groups, the preparation committee is developing detailed steps to build a framework in which social game companies effectively implement voluntary regulations

9

Mobage West: Creating Hit Titles
 Coin consumption on Mobage West in July approached $10 million mark  Building hit titles by utilizing efficient and scalable marketing on titles with
strong key performance indicators (KPIs) Third-party
• Rage of Bahamut maintaining high rankings on App Store and Google Play top-grossing charts in the U.S. and other Western territories Expand the user base and coin consumption through regionally-focused marketing in Europe and planned launch of the iPad version •

First- and Second-party
Blood Brothers and Ninja Royale recorded approximately one dollar ARPDAU* recently Building hit titles by growing the user base through intensive marketing

Rage of Bahamut (By Cygames, Inc.) *ARPDAU: Average revenue per daily active user

Blood Brothers (First-party)

Ninja Royale (First-party)

10

Mobage West: Expanding Game Lineup
Expanding first-, second- and third-party lineups

 Strategy for expanding lineups
• Create first-party titles with proven Japanese game development know-how • Release key titles with globally-recognized strong intellectual properties • Expand attractive game lineup by partnering with leading third-party developers worldwide

 Selected titles to be released in Q2 FY2012
First- and Second-party Third-party

Galaxy Assault

Monster Tracker

Fatal Frontier

Deity Wars CROOZ, Inc.

Fantasica
Silicon Studio Corporation

Rites of Delta Legend Cards KAYAC Inc. gloops International Inc.

Time Teens

Metal Shock

3D Card Battle Game

ETERNAL REQUIEM Kingdom Chronicle Monster Monster Pocket Planes KLab Global Pte.Ltd. AXEL MARK, INC. Sakurasoft Co., Ltd. NimbleBit LLC

…and more titles to be launched during FY2012 11

Bringing Major IPs to Mobile Social Games Worldwide

 Marvel
Marvel: War of Heroes Action-packed card battle game featuring the Avengers and other Marvel characters Planned launch: Fall 2012 About Marvel

• One of the world's most prominent
character-based entertainment companies

• The Avengers had a massive box
office performance exceeding 1.4 billion*.
TM & © 2012 Marvel & Subs. *As of August 5, 2012. Information courtesy of Box Office Mojo. Used with permission.

12

Bringing Major IPs to Mobile Social Games Worldwide

 Transformers
Card-battle game based on Hasbro’s Transformers Planned launch: 2012

About Transformers

• Worldwide popularity of animated TV
series, comic books and three liveaction movies

• Transformers series’ box office
revenue exceeded 2.6 billion*

*As of August 5, 2012. Information courtesy of Box Office Mojo. Used with permission.

TRANSFORMERS® AND ALL ASSOCIATED CHARACTERS ARE TRADEMARKS OF HASBRO AND ARE USED WITH PERMISSION ©2012 HASBRO

13

Mobage China and Mobage Korea
 Enhance game lineup to attract more users • Localize and release Rage of Bahamut
China
Alliance Partners in China

• Promote strategic partnerships with major players ‒ Number of registered users has grown to
5 million as of July 31

• Currently providing over 50 titles on Android and iOS • A few key titles released in 1Q showing strong KPIs
‒ Three Kingdoms Conquest by SEGA ‒
(Launched in May) Fantasica by Silicon Studio Corporation (Launched in June)

South Korea

• Expand user base via Daum’s user acquisition channels • Currently providing over 30 titles on Android and iOS • Expanding lineup with titles based on major IPs
‒ FINAL FANTASY AIRBORNE BRIGADE planned for launch in August
14

E-commerce Business: Launched Zerostore Service
(Available only in Japan)

 Enables building e-commerce websites with no initial fees or monthly charge
• While industry standard is to charge merchants monthly in
addition to initial fees, Zerostore offers highly functional ecommerce service at no cost

• Over 1,500 merchants signed up during first 10 days after launch

 Innovative site-building tools
• User interface with intuitive control, allowing merchants
to drag and drop items without any HTML knowledge

Site view (example)

 Premium optional services to boost sales
• Optional links with Bidders, Yahoo! Shopping and
Google Shopping • Options include payment settlement services by Paygent, a DeNA subsidiary

15

1H FY2012 Forecasts

(Billion yen) Item Revenue 1H FY2012 (Forecast) 1H FY 2011 (Actual) YoY change

97.1 37.9

69.3 29.8

+40% +27%

Operating profit Profit for the period attributable to owners of the parent

21.4

15.2

+40%

IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS.

16

Reference: Breakdown of Expenses
Item
Cost of sales Labor costs Depreciation and amortization Outsourcing expenses Commission fees Others Selling, general, and administrative expenses Personnel expenses Sales promotion & advertising expenses Outsourcing expenses Commission fees Others
Share-based compensation costs

(Unit: Million yen)
QoQ change Major factors of QoQ change

Q1 FY2012

Q1 FY2011

YoY change

Q4 FY2011

12,979
1,214 1,054 2,158 7,251 1,301

6,126
723 567 879 3,160 797

+112%
+68% +86% +145% +130% +63%

10,459
925 947 1,603 5,762 1,222

+24%
+31% +11% +35% +26% +6%
Increase in outsourced development costs and BAYSTARSrelated expenses Increase in revenue share of second party games Change in accounting treatment: a part of personnel expenses was reclassified from SG&A. Additional vacation accrual was provided.

16,277
2,752 5,464

13,557
2,338 4,976

+20%
+18% +10%

14,761
2,907 4,456

+10%
-5% +23%
1,999 consolidated employees as of June 30. (1,810 as of Mar 31) Increase in the promotion expenses for both domestic and oversea markets

5,713 2,255 93

3,749 1,584 910

+52% +42% -90%

5,231 1,332 835

+9% +69% -89%
Increased approx.400 million yen due to additional rental fees and HQ relocation costs A part of acquisition cost of overseas subsidiaries originally booked as goodwill was expensed out in FY2011 under IFRS

Other income/expenses (net)

58

68

-15%

-49

-

(Reference) Includes non-operating/extraordinary profit and loss except for financial income/expenses under J-GAAP.

*IFRS was adopted beginning Q1 FY2012. FY2011 figures have been restated in accordance with IFRS.

17

Reference: Purpose of Adopting IFRS and its Major Changes
 Purpose of adoption
  In promoting the expansion of overseas businesses, DeNA aims to secure transparency of financial statements and comparability with other companies by promptly adopting internationally recognized financial standards, as well. With global capital market in mind, attempt to diversify fund procurement methods in the future

 Major changes
 Effect on revenue in FY2011 was +0.8 billion yen, effect on operating profit was -3.1 billion yen 1. Revenue  Revenue from item billing: Before IFRS: Record lump-sum revenue at the time of item purchase After IFRS: Record revenue in proportion, in accordance with the progress of transaction (Minor impact on the revenue) Revenue from e-commerce business: Changed the way of disclosing revenue from Mobaoku monthly subscription fee, etc. from net revenue to gross revenue (No impact on the profit) Goodwill amortization : Terminated (impact on FY2011: +2.6 billion yen) Accounting for business combinations: Record part the acquisition cost of subsidiaries as expenses, which used to be recorded as a goodwill under Japanese GAAP (impact on FY2011: -3.6 billion yen) Outstanding paid leave: Amount equivalent to the remaining paid leave as of the end of each quarter is recorded as accrued vacation expenses (minor impact on the operating profit)

2. Operating Profit   

3. Others  Consolidation timing difference: There used to be 3 months lag in the consolidated accounting period of some subsidiaries, and now the consolidated accounting period for all entities is matched.  Presentation of operating profit: Non-operating/extraordinary profit and loss (except for financial income/expenses) reclassified to the operating profit  Presentation of profit for the period: (Before IFRS) Excludes minority interests (After IFRS) Includes minority interests (disclose the breakdown)

18

Reference: Changes in P/L Presentation from IFRS to J-GAAP

Japan-GAAP
Net sales Cost of sales Gross profit SGA Operating income Non-operating income Finance income Other Non-operating expenses Finance expenses Other Ordinary income Extraordinary income Extraordinary loss Income before income taxes and minority interests Income taxes Minority interests in income Net income Net income per share Net income per share-basic Net income per share-diluted

IFRS
Revenue Cost of sales Gross profit SGA Other income Other expenses Operating profit Finance income/costs Finance income Includes items such as FX gain/loss Finance costs Share of profit of associates accounted for using the equity method Profit before tax Income tax expense Profit for the period Attributable to Owners of the parent Non-controlling interests

Earnings per share Basic earnings per share Diluted earnings per share

19

Reference: Mobage Japan
As of Jun 30, 2012

Registered Users

Breakdown by Registered User Age Group (%)
Above 30

Number of Mobage Social Games
First- and second-party Feature phone PC Smartphone (browser-based) Smartphone (app-based) Third-party

43.07 million
32 42 44

48 7 35 16

917 202 355 42

Registered Users by Gender

42 38 Women 40% Men 60% 38

20-29

10-19

26
As of 06/30/10

20
As of 06/30/11

18
As of 06/30/12

20

The forecast data contained within this presentation and these presentation materials have been determined based on information available to date, but may contain an element of uncertainty. Please be aware that the actual performance data and similar information are subject to influence from diverse factors, and may differ from the forecasts presented herein.

DeNA Co., Ltd.

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