DIGITAL Hearts Co.,
Ltd.
President and CEO Eiichi MiyazawaJuly 9th, 2008
「Evolve from Made in Japan
to Checked by Japan」
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Index
1
Part-2 Financial Highlights(March, 2008)
Part-3 Future Growing Strategy
Part-1
Company Outline
Part-1
Company Outline
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 3
Company Name
DIGITAL Hearts Co., Ltd.
Representative
President and CEO Eiichi Miyazawa
Headquarters Address
3F Sasazuka South Bldg, 1-64-8 Sasazuka
Shibuya-ku, Tokyo, 151-0073 Japan
Business Field
Comprehensive QA Testing and Reporting of Package Software, Mobile Applications and Firmware.
Achievements
Annual Turnover:
2billion372million yen (FY 2007)
Ordinary Profit :
319million yen (FY 2007)
Capital
:
272million yen (as of May 20th
, 2008)
1 Company Outline/History
Year/Month History
2001 Apr. Corporation DIGITAL Hearts was founded in Suginami-ku, Tokyo and QA Testing Service started
Oct. Headquarter was moved to 2 Chome, Sasazuka, Shibuya-ku, Tokyo
2002 Sep. General Worker Dispatch Business Permission Granted
2003 Oct. Organization Changed to DIGITAL Hearts Co., Ltd.
2004 Aug. Number of Business Clients exceeded over 100 companies
200
5
Jan. Headquarter was moved to 1 Chome, Sasazuka, Shibuya-ku,Tokyo
Apr. Osaka Branch Office was opened in Osaka
Aug. Nagoya Branch Office was opened in Nagoya
Number of Business Clients exceeded over 200 companies
2006 Mar. Capital increased to 41million yen
Jun. Akihabara Branch Office was opened in Chiyoda-ku, Tokyo
Nov. Shibuya Branch Office was opened in Shibuya-ku, Tokyo
2007 Jul. Yokohama Branch Office was opened in Yokohama
Sep. 1st
Japanese Company to obtain Recommended Test Vendor authorization for Xbox
360Ⓡ
by Microsoft (AXTP)
Oct. Obtained Privacy Mark Permit Number: A822640(01)
2008 Feb. Registered in Mothers Tokyo Stock Exchange (Code:3620)
May Sapporo Branch Office was opened in Sapporo, Hokkaido
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 4
Client(Industry)
Various request ofSoftware QA
testing
Consumer Videogame
Mobile Contents
Pachinko,Pachi-Slot
Home Electronics
Others
Final QA Testing and Bug Reporting
Each Industry Know-How to be Utilized Widely
Proposal of QA Testing Pattern
2
Our Business Model
Inspection/Final QA Testing Know-How (DB)
Accumulated
Consumer Videogame Software
Cellular Phone ContentsPachinko/Pachinko-Slot
Skill Development
Training
Employment
Training/ Guideline
Our employees subject to Social Security and registeredstaff)
Execution of Active Final QA Testing by having self developed methodology through End Users Point of View
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 5
Major Software Company
Planning
Design Specification
Main Program
Merging Data
αver. / TestDIGITAL Hearts
βver. / Test
After βCorrectionComplete Master Ver.
Active(≠Passive)
QA Testing Service
End-Users
Target:
Videogame Software for the Consumer
Videogame Platform
Client:
Videogame Publisher, Game Software Developer
Others:
Business Application Software, EC Sight,
Consumer Digital Home Electronics Software
Target:
Application Software for Major Cellular Phone Carrier
Software built in the Cellular Phone
Client:
Contents Provider, Cellular Phone Developer
Target:
Pachinko, Pachi-Slot
Client:
Pachinko, Pachi-Slot Manufacturer
Developing Company
Individual TestingMatching Test
3
Our Business and the Field
QA Testing Service
Our Business Our Business Fields
Consumer Videogame Relations Business
Mobile Contents Relations Business
Amusement Equipment Relations Business
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 6
①
Accumulation of Experience & Knowledge
②
Ease of Access to Talented QA Testers
③
Maintain the Highest Security System Level
4
Our Characteristics and Strong Points
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 7
DATA Base
Stability of Customer Base with High Profile ClientIntensive QA TestingFull of Self Developed Training ProgramsVersatile knowledge transfer fromConsumer Videogame to other Industry
220K items (as of Mar.2008/122% vs 2007)of own Bug Information
DATA Base is accumulated at our “Debug Studio” and
increasing everyday.
QA Testing Experience in the industry where
the software development flexibility
is high such as Consumer Videogame
Analysis
①-1 Experience and Knowledge
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 8
310
398Approx.
1.2X
Increasing the Number of Customer Bases
398 Companies of Customer Bases as of end of March, 2008. (128% vs March, 2007 and 244 Companies
from the Consumer Videogame)
398 Companies of Customer Bases as of end of March, 2008. (128% vs March, 2007 and 244 Companies
from the Consumer Videogame)
07.03 08.03
①-2 Experience and Knowledge
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 9
Gain Customer
Confidence
Gain Customer
Confidence
Actual Bug DATA Base
leads us to efficiently detect the bug.
In House QA TestingBug Bug
Bug
Bug
Bug
Bug
Bug
Bug
Bug
Bug
BugBug
Bug
Become
Regular Customer
Become
Regular Customer
AdditionalKnowledge Base
Intensive and Thorough QA Testing Service
①-3 Experience and Knowledge
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 10
STEP1 STEP2 STEP3 STEP4
New Face TrainingNew Face Training
Operation SystemTerminology/Equipment KnowledgeNDABusiness Manners
Operation SystemTerminology/Equipment KnowledgeNDABusiness Manners
Basic TrainingBasic Training
QA Testing BasicHardware KnowledgeReportingSubcontracting/Dispatching Manner
QA Testing BasicHardware KnowledgeReportingSubcontracting/Dispatching Manner
Intermediate TrainingIntermediate Training Advanced TrainingAdvanced Training
Offer Step by Step Training Opportunity “from Business Manners to Advanced Level skills”
<<<<<
Developing the Professional Tester >>>>>
Pro
gra
m
・CERO
Text Glossary
・CERO
Manual HDD
Ver.
・CERO
Operation Guide
・QA Testing Glossary
・QA Testing Intermediate
・Objective Word Glossary
・DS Lot Check
・Wi-Fi
Communication
・WMTTest
Tool
・Communication Error
・Screen Splitter
・QA Test Follow up Sheet
・Wii
Information
・Wii
Operation Flow
・TRC
Inspection List
・Compliance Guide
・PSP/PS3
Information
・PS3
Operation Flow
・Pre Certification Check
・BREW
Basic Check List
・Application Test Basic Check list
・Sight QA Test Basic Check List
・”HOTSUUKYO” Related Manual
・Pachinko-Slot Knowledge Manual
・Pachinko-Slot Equipment Knowledge
Training Manual/Tool Example (partial)Training Manual/Tool Example (partial)
QA Test Spec. Bug Report AnalysisTotal Hardware KnowledgeSystem KnowledgeLeader Skill
QA Test Spec. Bug Report AnalysisTotal Hardware KnowledgeSystem KnowledgeLeader Skill
Title ImplementationConfiguration of programSpecial SpecificationSpec Knowledge by Carrier
Title ImplementationConfiguration of programSpecial SpecificationSpec Knowledge by Carrier
Management LeaderManagement Leader
Expert LeaderExpert Leader
②-1 Ease of Access to Talented Testers
Full of training programs we developed
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 11
The best “User of the Product” is the best “Hunter of the Product Bugs”
Offering the variety of the employment style to meet versatile sense of values
By offering the well planned “Training Curriculum” and execution can make program
steady to level up
Assurance to get the ready enoughfighting power Registered staff: 2,375 persons(as of Mar. 2008/239% of the Mar. 2007)
Assurance to get the ready enoughfighting power Registered staff: 2,375 persons(as of Mar. 2008/239% of the Mar. 2007)
Flexibility to assign by own system to meet clients work volumes, types and titles.
Flexibility to assign by own system to meet clients work volumes, types and titles.
“Fond of Videogame”
Youth
who are gadgeteers of the digital products
Our ConceptOur Concept
From “Fond of Videogame” to “Fond of QA Testing”From “Fond of Videogame” to “Fond of QA Testing”
②-2 Ease of Access to Talented People
Number of Registration
9931,151
1,375
1,797
2,375
800
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
2007/03 2007/05 2007/07 2007/09 2008/03
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 12
No unauthorized person is permitted to enter the facility and maintain high security level. In and out of QA Test Room is secured by implementing Fingerprint Authentication System.
No unauthorized person is permitted to enter the facility and maintain high security level. In and out of QA Test Room is secured by implementing Fingerprint Authentication System.
Prevention of security information leakage/fire by CCTV Camera system and Security Service rendered for 24hrs. Immediate action taken from the beginning of the problem for surveillance and warning.
Prevention of security information leakage/fire by CCTV Camera system and Security Service rendered for 24hrs. Immediate action taken from the beginning of the problem for surveillance and warning.
Every Title work we receive is under development and all the information is subject to Security. Security information and Media are abolished by Security specialized Company.
Every Title work we receive is under development and all the information is subject to Security. Security information and Media are abolished by Security specialized Company.
All the media we receive from clients is stored in the safe. Only responsible person is authorized to manage the safe. Also, destructive action is monitored by the online network.
All the media we receive from clients is stored in the safe. Only responsible person is authorized to manage the safe. Also, destructive action is monitored by the online network.
① In & Out Control by Fingerprint Authentication System
① In & Out Control by Fingerprint Authentication System
②監視カメラによる防犯監視②監視カメラによる防犯監視
③ Demolishing SecurityDocuments by SecuritySpecialized Company
③ Demolishing SecurityDocuments by SecuritySpecialized Company
④ Installation of Safe inthe Secured Room
④ Installation of Safe inthe Secured Room
写真1 写真2 写真3 写真4
High Security System to Satisfy the Severe Client Requests of the Security Level
③
Maintain the Highest Security Level
② Crime Prevention byCCTV Camera System
② Crime Prevention byCCTV Camera System
Part-2 Statement of Accounts (Fiscal Year Ended March, 2008)
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Statement of Accounts (March, 2008)
14
Net Sales, Operating Income, Ordinary Income and Net Income are above forecast unit:¥
millions
2007/3 2008/3Plan 2008/3 vs ’08/3 (+/-) vs ’08/3 (%)
Net Sales 1,499 2,228 2,372 873 158.2
Operating Income 229 296 336 107 146.1
Ordinary Income 229 278 319 90 139.1
Net Income 136 166 169 33 124.2
06.03 07.03 08.03
921
921
1499
2372
0
500
1,000
1,500
2,000
2,500
06.3 07.3 08.3
Net Sales Transition
Net Sales
(¥
millions)
108
229
319
77
136169
0
50
100
150
200
250
300
350
06.3 07.3 08.3
Ordinary Income,Net Income Transition
Ordinary IncomeNet Income
(¥
million)
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 15
Achievement Transition
319 320542
768
1529
10 76
205
425
414
73132
174
305
427
0
500
1,000
1,500
2,000
2,500
04.3 05.3 06.3 07.3 08.3
Net Income Transition
Amusement Equipment
Mobile Contents
Consumer Videogame
16
36
108
229
319
13 19
77
136
169
4.1
6.8
11.8
15.3
13.4
0
5
10
15
20
25
30
0
50
100
150
200
250
300
350
04.3 05.3 06.3 07.3 08.3
Ordinary Income,Net Incomeand Ordinary Income/ Net Sales Ratio Transition
Ordinary Income
Net Income
Ordinary Income/Net Sales Ratio
(¥
million)(¥
million)(%)
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Quarterly Achievement Transition (March, 2008)
16
1Q 2Q 3Q 4Q
Net Sales 416 558 733 663
Ordinary Income 29 70 154 65
unit:¥
millions
(¥
million)
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Penetrating the Outsourcing for Consumer Videogame QA Testing
2007/3 2008/3 vs prior year(+/-) vs prior year(%)
No. of Titles Sold 1,316 1,316※ ー ー
No. of Titles Ordered at DH
172 321 149 186.6
Order Receiving Ratio
13.0 24.3 11.3 186.6
17
vs prior year 186.6%
24.3%13.0%
07.03 08.03
172
321
050
100150200250300350
07.3 08.3
No. of Titles Order Received
No. of Titles Order Received 100
50
0
24.3
(%)
13.0
(¥
million)
Order Received Ratio
※Number of Titles Sold as of 2008/3 is under research. Applied the same number as the previous year for estimation.
・
Information Source for the Number of Game Titles:FAMITSU GAME HAKUSYO 2007・
Number of Titles Sold is calculated by subtracting the None Subjective (such as leader layer etc) from total sales.
unit:¥
millions
In house & others
DIGITAL Hearts
In house & others
DIGITAL Hearts
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Key Notes of the Statement of Accounts (FY 2008.3)
18
unit:¥
millions
2007/3 2008/3Plan 2008/3 vs prior year vs prior year (%)
Net Sales 1,499 2,228 2,372 873 158.2
Operating Income 229 296 336 107 146.1
Ordinary Income 229 278 319 90 139.1
Net Income 136 166 169 33 124.2
Penetration of the QA Test Outsourcing
Sales Expansion by the Healthy Consumer Videogame Market Place Growth
Increase Name Value & Gain Client Confidence by Mothers Tokyo Stock Exchange Registration
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
2006/3 2007/3 2008/3 vs 07/3 vs 07/3(%)
Consumer Videogame
542 768 1,529 761 199.1
Mobile Contents 205 425 414 (11) 97.3
Amusement Equipment
174 305 427 122 140.2
19
07.0308.03
unit:¥
millions
Consumer Videogame65%
Consumer Videogame51%
Mobile Contents29%
Mobile Contents17%
Amusement20%
Amusement18%20%
29%
51% 65
%
18
%
17
%
Sales Achievement by Business Category
Part-3 Future Growing Strategy
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 21
Aiming for FY2008
①. Strengthen the Main QA Testing Business
②. Expand Collateral QA Testing Services
③. Develop and Expand the Overseas Business
④. Strengthen and Expand the Business Field
⑤. Establish the Nation Wide Business Network
⑥. Increase Name Value and Client Confidence
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 22
Implement the Client Manager System
CurrentClient
NewClient
Sales
Deve
lop
Coord
inat
e
Client Manager(15staff)
Sales(12staff)
NewClient
CurrentClient
Deve
lop
Coord
inat
e
FY2007 April 1st
~
Sales to cover both Current and
New Clients
Sales to be dedicated to develop New Client and Client Manager can strengthen the
business relationship with Current Client!
Follow up
①
Strengthen Main QA Testing Business
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 23
②-1 Expand Collateral QA Testing Services
08.04
On Line Game Soak Testing Service
Started as Collateral Service
08.04
Compliance Check Service Started
for Xbox 360
Ⓡ Videogame Software
08.05
24 hours Websites Check Service
Started.
08.06
BREW®
PRE-CHECK Service Started.
08.06
Pachi-Slot’s Selector/Hopper Check Service started.
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 24
②-2 Expand Collateral QA Testing Services
08.07
Portal Website of Product Quality Information, “fuguai.com”, launched.
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 25
08.03
Japanese/English Translation Services
for Bug Report Started
08.04
Japanese/English Translation Services
Started for Videogame Related Documents.
08.04
Organized Overseas Business Department
08.04
English Website Opened
③ Develop and Expand Overseas Business
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 26
Apply Cumulated Technology
to the Electronics Field
Consumer Videogame QA Testing Technology
Pachinko/Pachi-Slot QA Testing Technology
Mobile Phone Contents QA Testing Technology
Apply
④ Strengthen and Expand Business Field
Enhancement Expansion
Electronics Field
Digital Home ElectronicsCar Navigation
etc.
“Current Sales under Consumer Videogame”
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 27
07.07
Yokohama Branch Office Opened
08.05
Sapporo Branch Office Opened
Current 5 Branch Offices
⑤-1 Establish the Nation Wide Business Network
08.05
Nagoya Branch Office will move to a new location and expand the floor space
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 28
Sapporo
Tohoku
Region
Sasazuka
Shibuya Akihabara
Yokohama
Yokohama-2
Kyusyu
Region
Nagoya Osaka
Okinawa
⑤-2 Establish the Nation Wide Business Network
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 29
Hiring Cost TransitionBefore/After of Tokyo Mothers Stock Exchange Listing
¥0
¥5,000
¥10,000
¥15,000
¥20,000
¥25,000
¥30,000
¥35,000
07/06 07/07 07/08 07/09 07/10 07/11 07/12 08/01 08/02 08/03 08/04
Before After
Head Office
+Yokohama
Sapporo Office
¥1,050
Ease of access to recruit talented people
⑤-3 Establish the Nation Wide Business Network
176 Applications Received during 6 Day Recruiting* Actual Result of Sapporo Office in April
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 30
Increase Name Value by Mothers Tokyo Stock Exchange Registration
Gain Client Confidence
ResultsResults
Name Value
Confidence
⑥ Increase Name Value & Client Confidence
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 31
Sales Electronics
Amusement Equipment Relation Business
Mobile Relation Business
Consumer Videogame Relation Business
Image of the Future Growth
Establish Natio
n Wide Netw
ork
海外への展開
Expansion of Service
Enhance & Expand Business Field
Gain Name Value & Confidence
Develop Overseas Business
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
FY2008 Business Forecast
2007/3 2008/3 2009/3Plan vs ’08/3 vs ’08/3(%)
Net Sales 1,499 2,372 3,100 728 130.7
Operating Income 229 336 471 135 140.4
Ordinary Income 229 319 473 154 148.2
Net Income 136 169 250 81 147.6
32
unit:¥
millions
528921
1499
2372
3100
0
500
1,000
1,500
2,000
2,500
3,000
3,500
05.3 06.3 07.3 08.3 09.3
Net Sales
Net Sales
Plan
1378
2009/half year Plan
(¥
million)
36
108
229
319
473
1977
136169
250
050
100150200250300350400450500
05.3 06.3 07.3 08.3 09.3
Ordinary Income,Net Income TransitionOrdinary Income
Net Income
Plan
128
67
2009/half year Plan
(¥
million)
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 33
FY2008 Ordinary Income Point
2007/3 2008/3 2009/3Plan
Net Sales 1,499 2,372 3,100
Ordinary Income 229 319 473
Ordinary Income/Net Sales Ratio
15.3 13.4 15.2
39%up 48%up
(百万円) (%)
229
319
473
39%up
48%up
0 5 10 15 20 25 30 35 40 45 50 55
0
50
100
150
200
250
300
350
400
450
500
07.3 08.3 09.3Plan
Ordinary Income Growth Ratio Transition
Ordinary Income
Ordinary Income Growth Ratio Transition
(¥
million) (%)
229319
473
15.3% 13.4% 15.2%
0
5
10
15
20
25
30
0
50
100
150
200
250
300
350
400
450
500
07.3 08.3 09.3Plan
Ordinary Income/ Net Sales Ratio TransitionOrdinary Income
Ordinary Income/Net Sales Ratio
(%)(¥
million)
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Sales Forecast by Business Category
34
unit:¥
millions
08.03
Consumer Videogame65%
Mobile Contents17%
Amusement18%
18%
17% 65%
09.03
Consumer Videogame63%
Mobile Contents18%
Amusement19%
63%18%
19%
2008/3 2009/3Plan vs ’08/3 vs ’08/3 (%)
Consumer Videogame
1,529 1,941 412 126.9
Mobile Contents 414 571 157 137.7
Amusement Equipment
427 587 160 137.2
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved. 35
Gain Confidence & Get Results by “Proactive Practice and Action”
Maximize one’s Ability
Seek for the Superior Level of Quality at all times
Continue challenging oneself to change for the better
Confront the obstacle in accordance with one’s beliefs
Without the vanity, give your best with passion
“Bringing up shining talented individuals” full of human nature
Endeavour to achieve 100% Market Share with “Never Lose Spirit”
Put the Merit System above all
Management PhilosophyManagement Philosophy
Management VisionManagement Vision
Management Philosophy and Vision
「Evolve from Made in Japan
to Checked by Japan」
Copyright (C) 2008 DIGITAL Hearts CO,LTD All Rights Reserved.
Thank you very much for your attention!
36
This document is presented for the purpose of the activity which
concerns the Investor Relations and is not intended
to induce investment activities. While our company takes great care over the information that it posts on this
document, it provides no warranty concerning the accuracy, reliability, or completeness of this information.
Projections posted on this document concerning future financial data or business activities are based on the
information available to our company at the present time. Since such projections do represent some risk and
uncertainty, please be aware that a variety of factors may operate to produce final results that vary greatly from
these projections.
Copyright works on this document are protected by the Copyright Law. The reproduction, modification, translation,
distribution, performance, or exhibition of such works without permission is prohibited.
IR
Contact:
Dept.:
Corporate Planning Department
Name:
Akiyoshi
Yamazaki
TEL:
+81-3-3379-2053(General)
TEL:
+81-3-3379-2219(Direct)
E-mail:
ir@digitalhearts.com