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Investor Presentaiton

Costs and Expenses, etc. SEGASammy Entertainment Contents (Billion yen) FY2021/3 FY2022/3 FY2023/3 FY2024/3 Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Results Full Year Forecast R&D / Content production expenses 9.2 9.8 11.8 14.7 9.9 13.5 12.7 18.3 11.9 14.8 16.4 22.9 66.0 68.9 Advertising expenses 1.7 2.8 3.3 3.7 2.2 3.9 3.7 4.4 2.7 5.0 6.3 6.7 20.7 23.6 Depreciation 2.2 2.3 0.7 1.5 0.8 0.9 0.9 1.1 0.9 1.0 0.9 1.0 3.8 3.6 Cap-ex 2.2 2.8 3.5 1.9 1.5 1.4 1.6 2.8 1.1 1.1 1.7 2.0 5.9 6.1 Pachislot & Pachinko (Billion yen) FY2021/3 FY2022/3 FY2023/3 FY2024/3 Full Year Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Results Full Year Forecast R&D / Content production expenses 5.4 3.9 3.3 3.7 3.4 3.2 3.4 4.4 3.0 3.5 3.7 4.2 14.4 15.5 Advertising expenses 0.1 0.6 0.3 0.2 0.2 0.6 0.5 0.3 0.3 0.3 0.3 0.8 1.7 4.0 Depreciation 0.8 0.9 0.9 0.8 0.5 0.7 0.7 0.8 0.6 0.7 0.7 0.7 2.7 3.0 Cap-ex 1.1 0.7 0.7 0.8 1.2 1.1 0.8 1.0 1.0 1.0 1.0 1.2 4.2 5.4 *Recognition of R&D Expenses and Content Production Expenses by business segments • • • Entertainment Contents business (Full Game (CS)): Expenses are capitalized as inventory assets or intangible assets during development and booked as expenses after launch. 25% will be amortized in first month and the rest will be amortized over a period of 23 months using the straight-line method (Total amortization period is 24 months) Entertainment Contents business (F2P (F2P)): Expenses are amortized over a period 24 or 36 months using the straight-line method Entertainment Contents business (AM): Expenses are capitalized as inventory assets during development and booked as expenses after launch. They will be amortized 15% per first 2 months and the rest will be amortized 7% per 10 months using the straight-line method (Total amortization period is 12 months) Pachislot and Pachinko business: Expenses aren't capitalized but are recognized as they arise (process outsourcing expenses recognized when work is inspected) *Full Game (CS) are anticipated to be sold for a longer period due to recent longer product lifecycle compared with conventional length, so the amortization rule has been revised as above from new titles to be launched in FY2024/3. Titles released by FY2023/3 will be amortized 40%, 15%, 5% per first 3 months and the rest will be amortized 2% per 21 months using the straight-line method. Content development amortization expense of Entertainment Contents business as a whole is expected to be reduced for approx. 4.6 billion yen in FY2024/3. -5-
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