Thank you for continuing to support Sammy NetWorks Co., Ltd.
  Based on our corporate slogan of “Delivering ‘Wow!!’ to the world via networks,” we have been offering an array of services which give users joy, amusement, and sensation.
  With the operating environment showing signs of an economic recovery, we sought to bolster our earnings base in the fiscal year ended March 2010, by launching new services. We also addressed the following three priority issues.

  The first issue was the full commercialization of yosoo.net mobile services offered by our subsidiary REALUS INC. in the Point Media Division. Beginning as yosoo.net mobile service, an official i-mode site, in July 2008 and au one okozukai, a collaborative site with KDDI, in October 2008, membership has been steadily increasing, rising to 1,630,000 members in total for both carriers at the end of the fiscal year under review. However, for reasons that included a delay in the full launch of a pay-for-use system that we had expected to contribute to the commercialization, which was attributable to a change in the system development and operation company during the period, yosoo.net mobile services were unable to achieve the results anticipated.

  Second, we took steps to solidify further growth in core amusement businesses.   Particularly in Sammy 777 Town, our official mobile phone site, we were able to reverse the downturn associated with the falling number of service members in recent years and achieve growth, as we focused on events while adding items and avatars that users can use inside games. With this service, we also launched a pay-for-use system in August to adopt a new business model.

  The third issue was to acquire a firm footing for the commercialization of new services in the next fiscal year. Although we enjoyed a steady increase in the membership of uchico, a specialist free community site targeting primarily junior and senior high school students, and Girls DECO, a free mobile phone service in the mobile content decoration market for distinctive females in their late teens and twenties, we have to reach the stage where we really ready to commercialize the services in the next fiscal year.

  As a result of these initiatives, Sammy Networks reported consolidated net sales of 10,767 million yen (down 2.8% year on year), consolidated operating income of 2,601 million yen (up 15.7% year on year), and consolidated ordinary income of 2,626 million yen (up 15.5% year on year) for the fiscal year ended March 2010. Consolidated operating income and consolidated ordinary income reached new highs.
  In the years ahead, we will aim to achieve further growth in our core amusement businesses. From a strategic standpoint, we will expand the pay-for-use system, strengthen our ability to attract customers, and enhance and activate services other than pachinko and pachislot.
  We will also develop new services extensively, including yosoo.net mobile services in the Point Media Division, to acquire a firm footing for commercialization.
  For the fiscal year ending March 2011, we forecast net sales of 13 billion yen, operating income of 3.1 billion yen, ordinary income of 3.1 billion yen, and net income of 1.76 billion yen on a consolidated basis.
  With respect to the distribution of profits to our shareholders, we will aim for a consolidated payout ratio of 20% over the medium and long term, taking our business outlook into account, and with a basic policy of paying dividends appropriate to profits. We aim to maintain this dividend level and to boost profit distribution to shareholders in step with future improvements in our results.
  Sammy NetWorks is determined to achieve long-term growth for the benefit of its shareholders. As we pursue this commitment, we ask for your continued support.

President and CEO