Grow th Strategy046

Create a Steady Streamof High-Quality Hit Games
Koki Ukita

Yusuke Hidaka

Managing Executive Officer

Director, Executive Vice President

Since its 2009 entry into the market, CyberAgent's Game Businesshas grown in parallel with the growth of the smartphone game market.
We spoke with Yusuke Hidaka, Director, Executive Vice President,
and Koki Ukita, Managing Executive Officer,
about the events of the past few years
that have brought about major changes in the environment,such as the impact of COVID and the full reopening,as well as CyberAgent's current competitive advantages
in the gaming business and future prospects.

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We believe it is critical to strengthen
our company's collective capabilities inorder to consistently create hit titles. (Hidaka)
Leveraging Our Collective Capabilities
to Compete in a Highly
Competitive Environment― What is happening in the smartphone game market inPursuing a "AAA Strategy" withJapan's Largest Development System― What is your long-term business strategy?

Japan now?

Hidaka: In our game business, our strategy leverages theHidaka: The domestic smartphone game market has changedin ongoing game development.

dramatically in recent years, as the gaming population has
grown in response to demand from the home-nesting that tookroot during the COVID pandemic. The market's current size isaround 1,212.9 billion yen*, placing Japan third in the world after
China and the United States.
"Umamusume: Pretty Derby"*2, released in February 2021,
became a massive hit for our company, indicating a significant
transition period.
The smartphone gaming market has been growing steadily.
However, growth is slowing, partly due to the impact of thereopening of COVID.
We expect competition to intensify further as the market maturesand more foreign companies enter. As consumers demand higher
quality, we believe it is critical to strengthen our company's
collective capabilities to consistently create hit games.

strengths of each of our 10 game-centric subsidiaries to engage
Cygames, which specializes in original IP, has already produced
several hit games. Even after the 9th anniversary, "Granblue
Fantasy"*3, one of its flagship titles, remains a mainstay title forthe company, with console games scheduled for release inDecember 2023 and February 2024.
For "Umamusume: Pretty Derby"*2, we are currently striving tocreate a title that users will love for years through a multimedia
franchise that will expand the title beyond the scope of asmartphone game to include the production of TV anime andcomic series.
Ukita: At another one of our game subsidiaries, SGE(Smartphone Game Entertainment Division), we haveestablished a "AAA (Triple-A) Strategy," with the goal of
producing global hits with powerful IPs.
A good example of this is "FINAL FANTASY VII EVER CRISIS"*4CyberAgent, Inc.
Yusuke Hidaka Mar. 1998 Establishedand was appointed as Managing Director.

Director,Executive Vice President

Oct. 2010 Director and Vice President of CyberAgent (current position)
May. 2011 Director, Cygames, Inc. (current position)
Oct. 2020 Executive Officer, CyberAgent, Inc. (current position)*1 Kadokawa Ascii Research Institute, "Famitsu Mobile Game White Paper 2023" (March 2023)

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To develop hits in the face of fierce competition, we must havea solid development system, technological capabilities,
a commitment to pursuing quality, and operational capabilities. (Ukita)
which was released in September 2023. Without altering thebeloved world and lore of the highly popular FINAL FANTASY
VII*5 series, we hope to not only satisfy existing fans but also
expand our new fan base through smartphone games.
― What are your competitive edges?
Ukita: I believe we have the largest smartphone gamedevelopment organization and operational capabilities in Japan.
To develop hit games in the face of fierce competition, we musthave a solid development system, technological capabilities, acommitment to pursuing quality, and operational capabilities.
Although the development time for each title is longer than in
the past, each member has worked with great enthusiasm,
which has helped to further increase confidence in the quality ofCyberAgent, and we have recently received more and more
inquiries from prominent IP content holders.
Another advantage is the flexible collaboration between
subsidiaries, each with its own strengths, and the flexible
movement of personnel.

Koki Ukita
Managing Executive
OfficerThroughout the game industry, information is actively exchanged
2011 Joined CyberAgent, Inc.
2014 President, Applibot, Inc. (current position)

between offices from the development stage, in addition to2018 Director, Colorful Palette Inc. (current position)

pre-launch tests performed by top management team.

2020 Managing Executive Officer, CyberAgent, Inc. (current position)

By maximizing group synergies without organizational boundaries

between subsidiaries, we are now able to produce high-quality
titles regardless of which company is working on them.

Production Team s Passion is Essential forGames to Become Timeless Classics― Game business consists of several subsidiaries, but dothey all follow the same HR strategy?
Hidaka: The major titles we are currently working on take atleast three years to develop and require around-the-clock work
even after release. Titles that are destined to become timelessclassics are born not only from a high level of technical skill but
also from the passion of developers, who must thoroughly
consider the user's perspective and whether they will truly findthe game entertaining.
Ukita: In this regard, I feel that every member of the production
team has a deep passion for their project.
It has been six years since we launched the "AAA Strategy," andthe titles that core members have experience working on are
now in their third round, which creates a virtuous cycle. I feelthat the organization has become stronger by having more049

experienced staff, and we anticipate that their knowledge-sharing
and training will accelerate in the future.
Hidaka: The CyberAgent Group, which launched its gamebusiness in 2009, is now one of the largest companies in thesmartphone game market in Japan. We also have the mostmodern development facilities, and I believe we have anenvironment that allows our talent to maximize their abilities.
By implementing a variety of approaches that leverage thestrengths of each subsidiary, we will continue to develop titles ofthe highest quality that are universally popular around the world.

*2 Umamusume: Pretty Derby, © Cygames, Inc.
*3 Granblue Fantasy, © Cygames, Inc.
*4 FINAL FANTASY VII EVER CRISIS, © SQUARE ENIX
Powered by Applibot, Inc. CHARACTER DESIGN: TETSUYA NOMURA /CHARACTER ILLUSTRATION: LISA FUJISE*5 FINAL FANTASY VII, © SQUARE ENIX

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© SQUARE ENIX Powered by Applibot, Inc. CHARACTER DESIGN: TETSUYA NOMURA / CHARACTER ILLUSTRATION: LISA FUJISE051© SQUARE ENIX Powered by Applibot, Inc. CHARACTER DESIGN: TETSUYA NOMURA / CHARACTER ILLUSTRATION: LISA FUJISE