Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2015
(Six Months Ended September 30, 2014) (Based on J-GAAP)
November 5, 2014
Company name:
Stock Code:
Representative:
Contact:

Marvelous Inc.
Listing: First Section of Tokyo Stock Exchange
7844
URL:
http://www.marv.jp/
Haruki Nakayama, Chairman, CEO
Seiichiro Kato, Director, Executive Officer, CFO, Chief Senior Director of Administration
Tel: +81-3-5769-7447
Scheduled date of filing Quarterly Securities Report:
November 7, 2014
Scheduled commencement date of dividend payout:—Explanatory documents supplemental to the abridged Quarterly Financial Statement: Yes
Quarterly results briefing: Yes (For Institutional Investors and Analysts)(All amounts are rounded down to the nearest million yen)

1. Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2015
(April 1, 2014 – September 30, 2014)(Percentages represent year-over-year changes)(1) Consolidated Results of Operations (six months)
Net sales
Operating income
Ordinary income
Net income
Million yen% Million yen% Million yen% Million yen%1H FY 2015
11,387
18.8
1,449
6.2
1,5149.3934
8.6
1H FY 2014
9,585
21.3
1,365
23.5
1,385
35.6860
33.4
Note: Comprehensive income (million yen):
1H FY 2015: 942 (8.4%)
1H FY 2014: 869 (34.7%)

1H FY 2015
1H FY 2014

Net income per share
Yen
17.48
16.10

Diluted net income per share
Yen
17.48
—On October 1, 2013, the Company executed a stock split of its common shares at the ratio of 100 shares to 1. In conjunction with this action, the Company
has calculated net income per share for the quarter and diluted net income per share for the quarter as if the stock split had taken place at the start of theprevious fiscal year.

(2) Consolidated financial position
Total assets
Million yen
1H FY 2015
18,231
FY 2014
16,816
Reference: Shareholders' equity (million yen):Net assets
Equity ratio
Million yen
12,18011,921
1H FY 2015: 12,180

Net assets per share%Yen
66.8
227.8070.9
223.02
FY 2014: 11,921

2. Dividends
1Q-endInterimYen——Dividends per share
3Q-end
Yen
Yen
0.00
—0.00

FY 2014
FY 2015
FY 2015(forecasts)
Note: Revisions to the dividend forecast in the current quarter: None—Year-end

AnnualYen
13.00

Yen
13.00

15.00

15.00

3. Consolidated Forecasts for the Fiscal Year Ending March 31, 2015 (April 1, 2014 – March 31, 2015)(Percentages represent year-over-year changes)
Net income per
Net sales
Operating income
Ordinary income
Net income
shareMillion yen% Million yen% Million yen%
Million yen%Yen
Full year
25,000 23.0
3,800
26.4
3,790 24.6
2,274 20.8
42.53
Note: Revisions to the financial forecast in the current quarter: None

*Notes(1) Changes in significant subsidiaries during the consolidated period (six months) under review(changes in subsidiaries accompanying change in the scope of consolidation): None
New:None (Company name:)
Excluded: None (Company name:)(2) Application of accounting procedures specific to creation of quarterly financial statement: Yes(3) Changes in accounting principles, estimates and restatement
1) Changes in accounting principles caused by revision of accounting standards: None
2) Changes in accounting principles other than those mentioned above: None
3) Changes in accounting estimates: None
4) Restatement: None
(4) Number of shares issued and outstanding (shares of common stock)1) Number of shares outstanding (includingtreasury stock) at end of period
2) Number of treasury stock at end of period
3) Average number of shares outstanding
during the period (six months)

1H FY 2015

53,593,100 shares

FY 201453,593,100 shares

1H FY 2015

122,400 shares

FY 2014138,000 shares

1H FY 2015

53,464,818 shares

1H FY 2014

53,455,100 shares

On October 1, 2013, the Company executed a stock split of its common shares at the ratio of 100 shares to 1. In conjunction with this action, theCompany has calculated the number of shares issued and outstanding (shares of common stock) as if the stock split had taken place at the start of theprevious fiscal year.

* Information regarding the implementation of quarterly review proceduresThis summary of quarterly financial statements is not subject to quarterly review procedures pursuant to the FinancialInstruments and Exchange Act (FIEA), and at the time of disclosure of this summary of consolidated quarterly financial
statements, the quarterly review procedures of consolidated financial statements pursuant to the FIEA were notcompleted.

* Cautionary statement with respect to forward-looking statements
This document contains forward-looking statements including forecasts of the Company's business performance, which
are based on information currently available to the Company as well as on certain assumptions that the Company deems
reasonable. Therefore, results including actual business performance could differ materially from those described in theseforward-looking statements as a result of numerous factors.

Marvelous Inc. (7844) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2015(Based on J-GAAP)

1. Qualitative Information Concerning Quarterly Results(1) Explanation of consolidated business results
The entertainment industry in the period under review saw the smartphone game market expand on the back of rapid
smartphone proliferation to what has been said twice the size or more of the market for home-use games. This market
has thus left the growth phase and entered the maturation phase. Moreover, the Japanese market, the world's largest,
has been attracting much interest from foreign companies and prompted a string of market entries of foreign-madecontent, associated with intensifying competition. On the other hand, with growth of the domestic market slowing,
Japanese companies on their part have been making conspicuous efforts developing foreign markets. In the market for
home-use games, the domestic software market remains under intense pressure. However, along with the emergence ofhigh-performance hardware like PlayStation 4 and Xbox One, the possibilities of new game categories involving theuse of wearable devices and virtual reality have moved into focus. Incidentally, the Tokyo Game Show 2014 marked
the highest ever number of exhibitors and the second-highest number of visitors on record. In the market for arcade
games, amid the emergence of a range of games for young children and a growing number of consoles featuring
game/anime crossovers, there is an oligopoly situation due to the strength of some highly attractive contents offerings.
In the audio & visual sectors, although pressure on the software market continues, the live entertainment business has
been seeing steadily growing demand, raising expectations for overseas customer acquisitions and advances into
foreign markets.
Under these circumstances, the Group has been operating as a comprehensive entertainment provider deploying a"multi-content, multi-use, and multi-device" strategy to deliver diverse entertainment content in all business segments
and on a variety of devices. In order to establish robust IPs, the Group has been driving its strategy in the three key
areas of branding, alliances, and global business, and is working to offer content that generates "buzz" among today's
users while endeavoring to enhance its services.
As a result, the Group's net sales in the first half (April 1, 2014 to September 30, 2014) marked 11,387 million yen (up18.8% compared with the same period of the previous year), with operating income of 1,449 million yen (up 6.2%compared with the same period of the previous year), ordinary income of 1,514 million yen (up 9.3% compared withthe same period of the previous year), and net income of 934 million yen (up 8.6% compared with the same period of
the previous year).
Results by business segment are described below.
(Online Game Business)
The online game business saw "Browser Sangokushi" continue to show strong performance, now five years after the initiationof service. In mobile browser games, "Ikki-Tousen Burst Fight" remains popular two years after the service start, while "HighSchool DxD," now one year in service, has been showing steady growth. As to other existing titles, with the market shifting tosmartphone applications, online and mobile browser games of Marvelous have been showing favorable performances. In nativeapps, sales of "Logres of Swords and Sorcery: Goddess of Ancient" released in December 2013 have been solid, generating
significant contributions to earnings for the period. TV commercials for this title launched in September paid off withcumulative downloads surpassing 4 million instances and accelerating sales growth. In new titles, service was initiated inAugust for "HIGH SCHOOL D×D NEWFIGHT" as Marvelous' first free-to-play game for PS Vita, attended by preparations forthe release of several native apps in the second half of the fiscal year. However, after a comprehensive assessment of gamecharacteristics and future earnings potential, the development of "Browser Evangelion" was terminated despite extensive
development work for the title's release. The step follows the development termination of three other titles in the first quarter,also due to uncertain future earnings potential. The costs of the altogether four terminated developments in progress werewritten off in a single amount. Marvelous will continue to foster and strengthen titles with successful performance records andin the development of new titles, concentrate resources on selections that meet rigorous standards.
As a result, segment net sales totaled 6,117 million yen (up 54.5% compared with the same period of the previous year), withsegment operating income of 1,117 million yen (up 411.5% compared with the same period of the previous year).

(Consumer Game Business)
At the Company's sales sector of the Consumer Game Business segment, three new titles were launched ("SENRAN KAGURA
2 (Nintendo 3DS)" on August 7, "Bakumatsu Rock: Ultra Soul (PS Vita/PSP)" on September 25, and "KINKI NO MAGNA(Nintendo 3DS)" on October 2) with sales for the period recognized on a delivery basis. All three titles missed sales projections.
The Company's sales sector of the Consumer Game Business segment launched only one new title in the same period of theprevious year.
The amusement division initiated service for "PUZZLE & DRAGONS Z Tamer Battle" on June 26 as a new kids' amusement
console, to only moderate success. Although the existing "Pokémon TRETTA" performed well, results fell short of plan, partly
due to the severely competitive environment.
As a result, segment net sales totaled 3,430 million yen (down 8.9% compared with the same period of the previous year), withsegment operating income of 411 million yen (down 67.7% compared with the same period of the previous year).

-1-Marvelous Inc. (7844) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2015
(Based on J-GAAP)(Audio & Visual Business)
The audio & visual production sector of the Audio & Visual business segment implemented the audio-visual productcommercialization of the TV animation production "HAPPINESSCHARGE PRETTY CURE!" of the "PRETTY CURE" series.
Additionally, broadcast of the TV animation products "BakumatsuRock" and "Tokyo Ghoul," both lead-managed by theCompany, started in July.
The stage production division marked a total 68 performances of "MUSICAL THE PRINCE OF TENNIS," accompanied by arelease of two related DVDs. "Musical HAKUOKI" achieved altogether 19 performances accompanied with a release of two
related DVDs. "Stage Yowamushi Pedal" marked a release of one related DVD. For all performances that were subject torevenue recognition for the period under review, in addition to tickets having been almost sold out, the solid sales of related new
and previous DVDs contributed to segment earnings.
As a result, segment net sales totaled 1,844 million yen (down 0.9% compared with the same period of the previous year), withsegment operating income of 425 million yen (up 21.7% compared with the same period of the previous year).

(2) Explanation of consolidated financial position(1) Financial position analysis
On the consolidated balance sheets at the end of the first half, the Group had total assets of 18,231 million yen(up 1,414 million yen from the end of the previous fiscal year), total liabilities of 6,051 million yen (up 1,155
million yen from the end of the previous fiscal year), and net assets of 12,180 million yen (up 259 million yen
from the end of the previous fiscal year).
(Current Assets)
Consolidated current assets at the end of the first half totaled 15,322 million yen, which was 738 million yen
more than at the end of the previous fiscal year, due to factors including an increase in notes and accounts
receivable-trade.
(Noncurrent Assets)
Consolidated noncurrent assets at the end of the first half totaled 2,909 million yen, which was 675 million
yen more than at the end of the previous fiscal year, due to factors including an increase in property, plant,and equipment.
(Current Liabilities)
Consolidated current liabilities at the end of the first half totaled 5,990 million yen, which was 1,149 million
yen more than at the end of the previous fiscal year, due to factors including a decrease in loans payable andan increase in accounts payable.
(Noncurrent liabilities)
Consolidated noncurrent liabilities at the end of the first half totaled 60 million yen, which was 5 million yen
more than at the end of the previous fiscal year, due to factors including a decrease in long-term loans payable
and an increase in asset retirement obligations.
(Net assets)
Consolidated net assets at the end of the first half totaled 12,180 million yen, which was 259 million yen
more than at the end of the previous fiscal year, mainly due to net income for the period in excess of a decline
in retained earnings from dividend payments at the end of the previous fiscal year.

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Marvelous Inc. (7844) / Consolidated Financial Results for the First Half of Fiscal Year Ending March 31, 2015
(Based on J-GAAP)(2) Cash flow analysis
Consolidated net cash and cash equivalents ("Cash") at the end of the first half totaled 7,127 million yen, which
was 993 million yen less than at the end of the previous fiscal year.
Main factors for the change in cash were 1,387 million yen provided by operating activities (552 million yen lessthan in the same period of the previous year), 1,579 million yen used in investing activities (941 million yen
more than in the same period of the previous year), and 870 million yen used in financing activities (78 million
yen more than in the same period of the previous year), for a total of 993 million yen net cash used (532 million
yen more than in the same period of the previous year).
(Cash flows from operating activities)
Net cash provided by operating activities was 1,387 million yen. Main factors included a 760 million yen
increase in accounts receivable-trade, 716 million yen in expenditures for income taxes, 1,504 million yen inincome for the period before income taxes and minority interests, 478 million yen in depreciation charges,
and a 1,015 million yen increase in accounts payable.
(Cash flows from investing activities)
Net cash used in investing activities totaled 1,579 million yen. Main factors included expenditures of 669
million yen for the acquisition of property, plant, and equipment, 610 million yen for the acquisition of
intangible non-current assets, and 1,000 million yen for time deposits together with income of 700 million
yen from return of time deposits.
(Cash flows from financing activities)
Net cash used in financing activities totaled 870 million yen. Main factors included a 187 million yen net
decrease in short-term and long-term borrowings and 694 million yen in expenditures for dividend payments.
(3) Explanation of business outlook including consolidated business forecast
The consolidated business forecast remains unchanged from the business forecast announced on May 9, 2014.

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