There are two major causes. First is a decline in earnings in the Home Hideo Games business resulting from the postponement of the launch of "Monster Hunter 4", which was originally scheduled for the fourth quarter. Second is a decline in profitability resulting from the revision of the "DmC Devil May Cry" sales plan to 1.2 million units.

We cannot provide you with a specific number at this time. However, we are determined to maximize sales volume based on market conditions, the quality of this title, the number of game consoles in use, and many other factors.

Sales of "Monster Hunter 3 (Tri) G HD Ver". are strong as planned. We have nothing to say regarding trends involving hardware.

We are working on our plan for the next fiscal year and cannot make any statement about the plan at this time.

This business was profitable and contributed to earnings.

In approximate figures, sales were 40% overseas and 60% Japan in this fiscal year and 60% overseas and 40% Japan in the previous fiscal year.

We believe that the social game market in Japan is stagnant right now. Although there are a few popular titles, it appears that card battle and other current games have little more room to grow. At Capcom as well, social game sales were down from the previous quarter, although Mobile Contents business earnings surpassed our plan. Overseas, all social game companies are apparently having difficulty capturing game users in segments other than entry users. The social game market requires quick actions due to the fast pace of change. Capcom will continue to closely monitor these changes and adapt in growth of the market.

Sales of the "Resident Evil 5" machine were about 35,000 units as of the end of December 2012. We are continuing sales activities for this machine but we cannot provide any specific numbers at this time. We began working on improving manufacturing for these machines in 2012 and have raised monthly output by about 70%.

We appreciate the strong response that "Resident Evil 5" generated among users. We believe that the success of this machine was due to the quality of this title and market conditions that were favorable for a number of reasons. But we will not let this accomplishment make us over-confident. In the next fiscal year, we will work in raising sales volume for each model and establishing a framework capable of introducing a number of new models.

We are currently analyzing the causes, which involve our internal development operations and sales operations. We have not yet reached a clear conclusion. We believe that global sales of 5 million units are proof that this is a popular title. However, we believe that the new challenges we tackled at the development stage were unable to sufficiently appeal to users. In addition, we believe there was inadequate organizational collaboration across our entire company with regard to marketing, promotions, the creation of plans and other activities. We will have to examine these results from several perspectives. We will reexamine our internal operating frameworks in order to identify areas that need to be improved concerning development as well as sales and administrative operations.

We foresee no such losses at this time.

Based on sales in this nine months relative to our fiscal year plan, we are aware that our fourth quarter sales plan is ambitious. However, we have no intention of revising our plan at this time. We will do everything possible to reach our target, including the introduction of new titles in Japan and overseas.

The reason is somewhat slower growth in sales of some titles that had been driving sales growth in this business.

The increase is primarily the result of measures to strengthen the lineup of titles under development in the Home Video Games business. We are unable to provide information about specific titles.

We released "Dragon's Dogma" and "Resident Evil 6" in the first half of this fiscal year, but work-in-progress continues to increase because we are using development resources for the expansion of our lineup of game titles in the next fiscal year and afterward.

"Resident Evil 6" continues to generate repeat sales in Japan and overseas. Furthermore, initial shipments set a new record for a Capcom title. So this game has been successful to some degree. We therefore believe it is too early to reach a conclusion about how users view this game. We always listen carefully to the feedback from users and use this information when developing games.

We are unable to make a statement at this time about the outlook for the next fiscal year. We believe that we can sustain the rate of growth in the current fiscal year in the Mobile Contents business while focusing on global social games using the Beeline and Capcom brands.

"Smurfs' Village" became popular among a large number of light smartphone users in part because the start of distribution coincided with the emergence of the social game market. We are currently seeing rapid growth in user segments for social games and the number of titles. We believe that we are now at the stage of continuing to take on various challenges for creating new hit games that can target the increasingly diverse preferences of social game users.

In the current fiscal year, we set up game development bases in Taiwan and South Korea and we established Beeline Interactive Thailand Co., Ltd.. In addition, we plan to start distribution of mobile content in Indonesia in this fiscal year. These development bases will start operations in the second half of the fiscal year and our goal is to have them begin contributing to earnings in the next fiscal year.

Our revision of the sales volume is based on a comprehensive decision that reflects a variety of factors and risks at this time. We believe that prospects are good for reaching our goal of 6 million units. We are confident because of the approaching overseas Christmas and New Year selling season, past sales of titles in this series, and for other reasons.

As of September 30, 2012, we had about 1,500 game developers. Regarding our priorities, we will continue to allocate people to content development in the Home Video Game sector while recruiting and training more people to create games in our Mobile Contents and PC Online Game sectors.
Our goal is to increase the number of developers by 1,000 over the next 10 years. We want to further improve the quality of our games by maintaining an internal game development team.

The purpose of increasing our game developer team is to create a larger percentage of our games internally. Therefore, we believe that there will be no significant change in total development expenditures mainly because we will be shifting outsourced operations to our own workforce.

We believe that one reason is the difference between the user segments that we initially targeted with this game and the segments that are actually playing this game.

We are unable to disclose DLC sales figures. For "Dragon's Dogma" the number of paid downloads is a very high percentage of the number of units of this game that we sold. We record DLC development expenses when the distribution of this content starts.

Beeline Interactive Japan Co., Ltd. sells iOS content in Japan and we plan to start distributing more titles in Japan, including "Chibimaruko-chan to Okashi no Kuni". In Asia, we will strengthen our social game operations in Southeast Asia with the newly established "Beeline Interactive Thailand Co., Ltd." playing a central role.

We are not selling any PC online game titles in Korea right now, but we plan to start operations after determining a strategy for each title. Operations of the development section of our Korean subsidiary have started. The next step is developing titles and conducting operations that match the needs of consumers in Korea.

Unlike "Smurfs' Village", "Smurf Life" is a game that incorporates a story. Furthermore, players themselves can create Smurfs. Elements like these give the game a sense of adventure. We do not envision a particularly high ARPPU for "Smurfs' Village" and are placing priority on increasing the number of users. Our policy for "Smurf Life" is the same.

We have accumulated considerable expertise by creating and selling five machines of our own. We believe this know-how is responsible for the success of the "Resident Evil 5" machine. We plan to establish a framework capable of creating several new Capcom machines every year as we continue to focus on capturing orders from other companies.

Just as in the Home Video Games business, the P&S business has high marginal earnings once sales surpass the cost of development. As a result, earnings increase in proportion to growth in sales volume.

There is no change in our policy of opening arcades in large shopping centers.

To attract more customer segments, we are going beyond the traditional family user segment by making arcades more appealing to seniors. We hold lectures to explain how to play our arcade games, hold senior tours to give people hands-on experience and hold other events on a regular basis.

With regard to the use of our characters under our "Single Content Multiple Usage" strategy, we believe there is room for improvement in the Arcade Operations business in relation to the synergies in our other businesses.

Naturally, we want sales volume to be higher than for the previous title in this series. In addition, we want to enlarge the worldview of "Monster Hunter" by using initiatives other than games in order to build even stronger relationships with current user segments.

All business segments except Arcade Operations exceeded our plan for the first half. In the Digital Contents business as well, performance surpassed our plan in all categories: Home Video Games, Mobile Contents and PC Online Games.

We raised our fiscal year sales plan by 2 billion yen for two reasons. First is the growth in sales of "Minna to Monhan Card Master" and other social games in Japan. Second is the steady growth in sales of Beeline titles.

Overall, our results for this three months showed a favorable performance. While net sales of packaged software in our Digital Content business and our Arcade Operations business were slightly below our forecasts, net sales of online content (DLC, mobile content, PC, etc.) were higher than projected. Operating income was also higher than forecasted and is progressing on target.

"Dragon's Dogma" was a bigger-than-expected hit domestically, while overseas, it was slightly below our initial forecasts. However, in both domestic and international markets, unit sales increased with a steady expansion of repeat sales. Under current market conditions, we consider the sale of one million units for brand new titles to be a relative success. Given this, we are in a position to favorably consider subsequent titles.

We actively showcased "Resident Evil 6" at E3 and other game shows to overall positive reviews, and we believe we are in a position to positively achieve our 7 million target.

In Japan and Asia, we shipped 1.63 million units cumulatively.

We are currently planning for a "Spring 2013" release. Details will be announced at the appropriate timing.

"Smurfs' Village" continues to be solid worldwide. Downloads of "Shrek's Fairytale Kingdom", which began distribution in June, have increased steadily but its App Store ranking has fallen since its initial release. We consider this as a gap between user preferences and the game's characteristics, which we plan to remedy in future updates.  While sales and profit for the Beeline brand were about the same as the preceding fourth quarter, we anticipate growth in the second quarter and beyond with an increase in titles.

"Browser Sengoku BASARA" was just released in June and its contribution to first quarter financial results was very small, but we believe it is a title to watch.

Currently, none of Capcom's social games contains "complete gacha" and hence, we do not foresee any impact on our financial results or future business operations.

While we are unable to disclose specific titles in our future lineup at this time, with improved development efficiencies, we are working to provide a full lineup of home video games.

We consider that macroeconomic trends have only a negligible effect on consumer purchasing behavior. However, distribution problems in Europe may negatively affect unit sales of packaged software.

Utilizing our accumulated know-how and with ongoing quality improvements, our proprietary game machines business is growing steadily and we have high expectations for upcoming machines to be released this fiscal year. In addition, with strong repeat sales of "Monster Hunter" in our subcontracted business, we are performing well above forecasts. By continuing to develop both areas, we will focus on making P&S a pillar of the company's operations.

Social games primarily in the domestic market, most notably "Minna to Monhan Card Master", "Resident Evil: Outbreak Survive", and "Monhan Tankenki Maboroshi no Shima", contributed to a significant increase in profits.

With an enhanced title lineup from both Capcom and Beeline, we anticipate an increase in sales and profits.