copyrights© actozsoft all rights reserved actoz soft co., ltd. copyrights© actozsoft all rights...

Copyrights© ACTOZSOFT all rights reservedCopyrights© ACTOZSOFT all rights reserved

Actoz Soft Co., Ltd.


November, 2003 November, 2003

www.actoz.comwww.actoz.com


DisclaimerDisclaimer

This Presentation contains forward-looking statements.

These forward-looking statements are subject to risks, uncertainties and assumptions. Actual results may differ from those expressed or implied by those forward-looking statements. Because of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this presentation might not occur in the way we expect. You should not place undue reliance on any forward-looking statements.


Table of Contents

Corporate OverviewIndustry Overview

Core Competence

Key Strategy

Financial Highlights

Appendix


Corporate OverviewCorporate Overview

Since Commercial launch in 1996, Actoz Soft has been one of the fastest growing

on-line game companies and also a market leader in various overseas markets.

On-Line Games

Total Game Business

Game Technology

Name Content

A3Adult+3D Fantasy MMORPG

1000yearsAsian Martial ArtsMMORPG

Legend of Mir2,3

Fantasy Adventure MMORPG

Core Technology

Features

On-Line Game Platform

• Minimizing Development Period• Durability/Stability

Server Dispersion Technology

• Supports Massive Users• Enhanced Communication among Users

Business Content

Third party publishing

Game Publishing

& Distribution

Game related business

Character Business for main Game Franchise

Game Portal Game+ Portal

Global ‘Game Contents’ Provider


ChronologyChronology

~ 2000

2001

2002

2003

~2000

2001

2002

2003

FY00 FY01 FY02 FY03(E)

Sales 4.3 9.2 18.0 50.0

Net Profit 1.4 2.8 0.7 17.0

Net Asset 8.4 24.0 24.7 36.5

Actoz Soft Co.,Ltd. was established in 1996

‘Last Kingdom’, ‘1000years’ went into service.

Listed in KOSDAQ market

‘1000years’ , ‘Legend of Mir2 was exported to China

‘Legend of Mir2 became the #1 On-Line game in the world

# of Concurrent Users : 700,000 (only in China)

‘1000years’ , ‘Legend of Mir2 were exported to Taiwan

‘A3’ went into Commercial Service in Korea.

Joint Venture was established in China

‘A3’ has been exported to China, Taiwan, Japan and Thailand

Unit : USD in Millions


Marketing &CustomerService

54%

R&D37%

ManagementSupport

9%

Personnel Allocation

: Manpower based on Technology & Marketing

As of Sep, 2003

R&D Marketing Management Support

67 98 17

Current Status of Shareholders

: Small Cap but Large # of Tradable Stocks

InvestmentUnions ofEmployee

StockOwnership

16%Others66%

LargestShareholder

18%

As of June, 2003

Division # of Stocks Equity

Ratio(%)

Total Stock Issued 5,943,000 100

Largest Shareholder 1.053.165 18

Investment Unions of Employee Stock

Ownership961,026 16

Personnel & StocksPersonnel & Stocks


Vision 2005Vision 2005

DomesticMarket

Yesterday(into the

Market)

Today(Era of Growth)

OverseasMarket

Sales &Net Profit

Tomorrow

(Era of Expansion)

Leaping to be a Global Player

: Building Strong Publishing & Distribution Network

Consistent Performance

: Securing 30% Market Share in Domestic Market

: Sustaining to be a Dominant Player in China

Creating the Best Performance to Shareholders

: Focus on FCF & Value Maximization to recompense

shareholders

Cultivating Overseas Market

: Strengthening Grip on Current Markets

(China, Taiwan, Europe, Japan, Thailand)

: Exploring New Markets

(US, Canada, SE Asia, South America etc)

Continuous R&D to Develop Games

: Establishing a New Product line-up


Table of Contents

Corporate Overview

Industry OverviewCore Competence

Key Strategy


Appendix


Industry OverviewIndustry Overview

Korean Market Trend

After the year 2001, the MMORPG Market showed explosive growth by the help of expanded broadband services, introduction of new 3D technology and aggressive overseas market exploration.

. Testing the possibilities of MMORPG. Expansion of the online game market

. PC stand alone and Console driven market structure

. Dominated by western products

. Introduction of multi platform games

. Adoption of internet connectivity to console games

. MMORPG is replacing PC stand alone games

. Advent of internet portals specialized in games

. Significant enhancement of game quality with rapidly growing 3D graphic engine technology

. Game developers which have successfully achieved fund raising are now transferring into huge game publishers with strong online oriented distribution channels

. Aggressive overseas market penetration (mainly focused on China, Taiwan and other Asian regions)

Paradigm Shift

1996~2001

Post 2002Expansion to World Market



Domestic Game Market Growth Projection

223(M)377(M)

490(M)613(M)

0

500

1,000

1,500

2,000

FY01 FY02 FY03(E) FY04(E)

PC Arcade Console

Mobile Online

Unit : USD in MillionsSource : Encyclopedia of Korean Games (2003)

KGDI(Korea Game Development Institute)

Market Segmentation (Domestic)

2337

59

0

50

100

FY01 FY02 FY03(E)

Online game Usersout of All GameUsers

Source : Encyclopedia of Korean Games (2003)


Unit : %

On-line Gamers

Now in Korea, the On-line Game market is the biggest and the fastest growing Market. 59% of total gamers now play On-line Games on a regular basis.

850(M)

1(B)

1.3(B)

1.5(B)



Global Online Game Markets

46

8

0

10

20

30

40

50

60

70

FY01 FY02 FY03(E)

PC Arcade Console

Mobile Online

Unit : USD in BillionsSource : Global- DFC Intelligence (2000-2002), IDC, 2001 CESA,

IDSA(2001),

Market Segmentation (Global)

13

61

85

0

20

40

60

80

100

FY01 FY02 FY03(E)

China Online GameMarket Size

Unit : USD in MillionsSource : Encyclopedia of Korean Games (2003)


China On-line Game Market: Fastest & Largest Growing Market

While the On-line Game Genre shows a steady and high growth rate in the global game market, the China On-line Game Market especially, has shown a 391% growth rate in the year 2002 where ACTOZ SOFT’s products are dominant.

55.261.1

65.3


Table of Contents

Corporate Overview

Industry Overview

Core CompetenceKey Strategy


Appendix


Success of Legend of Mir2 in Success of Legend of Mir2 in China China

RankRank 20012001 20022002 2003(Half 2003(Half Term)Term)

1th Legend of Mir 2

Legend of Mir 2

Legend of Mir2

2nd Stone Age Cross gate Priston Tale

.

.

.1000

years(4th).

.

.

.

.1000year(5th)

.

.

.1000yeras(4th)

.

.

Chinese game users think

“Actoz is the best

online game company

in the world”

Market share of ACTOZSOFT

In China is over 60%

Highest # of Concurrent Users in the world : 700,000 Recording the highest concurrent users 3years consecutively in China

Market share of Actoz Soft’s games (Legend of Mir2, Legend of Mir3 and 1000years) is over 60% of total online game market in China.

Shanda Co., Ltd. which is one of our partners in china has become the biggest game company in China

Source : CNNIC(China Internet Network Information Center) (2003)


Success of Overseas BusinessSuccess of Overseas Business

Title Release Date Concurrent Users

1 1000years 09.2001 2,500

2 The Legend of Mir2

06.2001 5,000

3 A3 04.2003 30,000

TitleRelease Date

Concurrent Users

1 1000years 09.2001 45,000

2The Legend of Mir2

06.2001700,000 & 62mill subs

3The Legend of Mir3

01.2003 300,000

4 A3 (Through JV) 04.2003 -


1 A3 07.2003 --

Global On-Line

Game Publisher

Actoz Soft publishes both in-house and third party developed games through its global network with

accumulated overseas and domestic marketing know-how from servicing

‘1000years’, ‘Legend of Mir’ series and ‘A3’. Actoz is to expand its global

network to UK, France, Germany and North & South America within year

2004.


1The Legend of Mir2

03.2001 2,500


1 A3 09.2003 --

Europe China

Taiwan

Thailand

Japan

Actoz sales from overseas are over 70% of total sales


Success of A3 in Market Success of A3 in Market SegmentationSegmentation

High

Age

Adult (18~35)

Attractiveness The first game targeting only for adult

Differentiated Game Environment

= Sophisticated and Luxurious

Better Game Quality (System and Graphics)

OSMU(One source, Multi use) ; OST, Publication, Jewelry, Character etc

Point of Success

Low

Low HighUsers’ Loyalty

Casual Hardcore

Financial highlights Since commercial launching in August,2003

Paying users reached over 60,000 within a month.

Earned about 2Bil Won within a month.

Overseas market

Heating records of the highest license amount (Thailand, Japan, China, Taiwan)

Exported to 4 nations within 6 months since the

open beta service


Table of Contents

Corporate Overview

Industry Overview

Core Competence

Key StrategyFinancial Highlights

Appendix


Keeping leadership in China MarketKeeping leadership in China Market

By establishing a Joint Venture Company, ACTOZ SOFT shall bring all it’s Present and Future titles directly & more aggressively into China.

Vehicle

• Increased Brand Recognition

• Experiences in China

• Product Portfolio

Products

1000years(2D)

Legend of Mir2(2D)

Legend of Mir3(2D)

Business model

Licensing

Business scope

service

Products 1000years(2D) Legend of Mir2(2D) Legend of Mir3(2D) A3(3D) New Game( Project Name : da Vinci(3D)) New Game( Project Name : EO(3D))

Business modelLicensing(Legend of Mir series)

JVC (1000year,A3, Davinchi, EO)

Business scope

Service, Development, Publishing

Present (2003)

Future (2003)


Creating new Genre & MarketCreating new Genre & Market

Creativity, New GenreCreativity, New Genre

A3(2003)First Adult

Online game

da Vinci(2004)First sky battlein online game

EO(2004)First emotional

online game

Key Factors for SuccessCreativity : Create new genre providing interest and entertainment to users

Segmentation : Segmenting users into meaningful groups by age, lifestyle etc…

New Biz

Online game portal

Casual game

Age

High

Low


To be a successful PublisherTo be a successful Publisher

Searching method

Investing in Studios Co-developing games

Sourcing

Value-up Domestic

Strengthening mining powerSpin-off, Incubating system

Overseas Alliance with good game developing companies

Investing in overseas developers

Domestic Strengthening After-Sales Service Improving Marketing Power

Overseas Step1 : LicensingStep2 : Establishing Joint ventureStep3 : Direct Investment

Publishing method

Relying on marketing power Finding servicing partners abroad

Present

(2003)

Future

(2005)

Publishing


Table of Contents

Corporate Overview

Industry Overview

Core Competence

Key Strategy

Financial HighlightsAppendix


FINANCIAL HIGHLIGHTSFINANCIAL HIGHLIGHTS

1.59.7 13.07.7

8.3

37.0

0

20

40

60

FY01 FY02 FY03(E)

OverseasDomestic

9.2(M)

18(M)

50(M)

Stable Sales Growth

0

5

10

15

20

FY01 FY02 FY03(E)

Net Profit

2.8(M)0.7(M)

17(M)

Net Profit

Through an effective management and success in overseas markets, sales and net profit are rapidly increasing.

Unit : USD in Millions Unit : USD in Millions



0

0

10(M)

0

20

40

60

FY01 FY02 FY03(E)

A31000yearsLegend of Mir3Legend of Mir2

Sales Breakdown by Product

Quarterly Sales Breakdown in 2003

9.2(M)

18(M)

50(M)

0

10

20

30

40

1Q 2Q 3Q(E) 4Q(E)

A31000yearsLegend of Mir3Legend of Mir2


New Cash Generator

30.7(M)

14.4(M)

2.2(M) 2.8(M)

Through the launching of New Game(A3), ACTOZ SOFT is expecting a large increase in earnings.



0

10

20

30

FY01 FY02 FY03(E)

EBITDA

48

7

44

0

30

60

90

FY01 FY02 FY03(E)

EBITDA Margin

Unit : USD in Millions

Unit : %

EBITDA EBITDA Margin

EBITDA and EBITDA Margin are rebounding significantly. Profit returnable to shareholders and rate of return on equity are increasing.

4.4(M)1.3(M)

22.2(M)

2.85

0.12

0.56

0

1

2

3

FY01 FY02 FY03(E)

EPSEPS

Unit : USD

41

14

0

10

20

30

FY01 FY02 FY03(E)

ROEROE

Unit : %

:(Net Profit+Interest Expense+Depreciation+Amortization)

: (EBITDA/Sales)


Table of Contents

Corporate Overview

Industry Overview

Core Competence

Key Strategy


Appendix


Company ProfileCompany Profile

Category Description

DATE of ESTABLISHMENT Oct 29, 1996

CEO Jong Hyun Lee

ADDRESS 132-3 Sungbuk-dong, Unsuk B/D 1F, Sungbuk-Gu, Seoul, Korea

BUSINESS SCOPE Game Publishing, Character Business, Game Portal

PRODUCT LINE-UP• A3 : ‘3D Fantasy + Adult MMORPG’(3D) • 1000years : ‘Asian Martial Arts MMORPG’(2D)• Legend of Mir2,3 : ‘Fantasy + Oriental Style MMORPG’ (2D)

AFFILIATED COMPANIES Wemade Entertainment / Ani-park / Actoz Net / VanillaSoft / Actoz in World

Company Profile


Financial SheetFinancial Sheet

Balance Sheet Income Statement

Account FY03(E) FY02

Current Assets 24.4 20.5

Fixed Assets 16.1 8.5

Total Assets 40.5 29.0

Current Liabilities 4.1 4.3

Long-Term Liabilities - 0.1

Total Liabilities 4.1 4.4

Capital Stock 2.5 2.5

Capital Surplus 33.9 22.1

Total Shareholders’Equity

36.4 24.6

Total Liabilities &Shareholders’

Equity40.5 29.0

Account FY03(E) FY02

Sales 50.0 18.0

Cost of Goods sold 31.2 14.2

Gross Profit 18.8 3.8

SG&A Expense 5.8 5.0

Operating Profit 13.0 (1.2)

Non-Operating Income 8.5 3.3

Non-Operating Expense 0.0008 1.3

Ordinary Profit 21.5 0.8

Income Tax 4.5 0.1

Net Profit 17.0 0.7



‘ ‘ A3 ’ A3 ’

. Graphics

‘Realistic’ is the keyword for ‘A3’ Graphics. 100 motions are captured for each character combined with slicing & dicing blood effects, Dynamic Camera Works & Cinematic Scene Production all leading to a unique ‘Movie Style’ MMORPG.

. Scenario

Based on the original A3 novel, players can enjoy a strong, updated storyline that will last for years. Episode1~ 5

. Game System

- Characters: 3basic classes, Warrior, Knight, Sorceress divided into 8types.

- Shue: Enjoy breeding your own cyber pet while it fights along with you side by side.

- Skills & Items: Hundreds of level based armor, weapons and Unique Items.

- Quests: Quests are divided into Scenario based ‘Level-Up quests’ and ‘Special Quests’.

- War System: Individual PvP, Clan Warfare and Nation Warfare with RTS elements.

- Game in Games: Mini Games such as Card games, lottery and gambling within

. ‘3D Fantasy+Adult MMORPG’.

A3 stands for art, alive and attraction. Art represents the game's visual ecstasy, with a cinematic style and beautiful visual effects. Alive represents the game's extreme reality, including motion captured graphics and detailed backgrounds. Last, attraction represents the cast, who gamers will find themselves very attracted and drawn to. The current version of A3 is Episode 1. The game promises to have a continuous, updated story spread throughout several episodes. In A3 Episode 1, the game follows a battle between humans and monsters, in the land of Hellmarsh. The humans are striking back at the monsters in an attempt to save their homeland and protect their families.

Minimum Recommended

• O/S: Windows 98/ME/NT/2000/XP

• CPU: P-III 600Mhz

• RAM: 256MB

• VGA: 32MB VGA with 3D Support


• CPU: P-III 1GMhz

• RAM: 512MB

• VGA: 64MB VGA with 3D Support

Introduction

Client Requirements

Game Features


‘ ‘ 1000years ’ 1000years ’

. ‘Asian Martial Arts MMORPG’ ‘1000years’ is the worlds first ‘Asian Martial Arts MMORPG’ where graphics have an atmosphere combined with oriental heartstrings & overall mystery. Creating a sensation when released in the ‘Fantasy genre only’ market, it is played and loved by users from Korea, Taiwan and China. Set your clock back to 100decades ago, when the most notable historic changes occurred in the Far East. Masters of Martial Arts spread out rapidly among the three newly born dynasties of Korea, Japan and China. In this era when Kingdoms fell and new dynasties were born, players start their own journey to become a Master and rewrite the history of eastern Martial Arts.

Minimum Recommended

• O/S: Windows 95/98/NT/2000/XP


• RAM: 128MB

• HDD: 140M


• CPU: P-III 1GMhz

• RAM: 192MB

• HDD: 200M

. Infinite freedom given to users while playing game.

Players have the freedom to choose their jobs, train their Arts, Items and Skills.

. Express yourself ! The Dyeing System.

Choose among a total of 256 colors to dye and change your hair, clothes, footwear and items.

. Make your Original Arts, The Arts System.

When players master their Arts to a certain Level, they can start training their own original Arts.

. Oriental Fantasy

Pursuit of legitimate Asian Martial Arts is the core of the game while providing a unique Oriental fantasy by emergence of evil tribes, special items and heros based on Asian Legends.

Introduction

Client Requirements

Game Features


‘ ‘ The Legend of Mir2 ’ The Legend of Mir2 ’

. ‘Fantasy+Oriental style MMORPG’.While most RPG’s are focused on North European Fantasies, ‘The Legend of Mir2’ strongly emphasises on an original story with oriental background, mixed with western type RPG elements. Serviced in Korea, Taiwan, Europe and China, it is currently the most popular MMORPG in China with 700,000 concurrent users. In Mir, the continent of the mystery where secrets and legends of the ancient gods were largely hidden, war clouds hung over the land. At the time, humans, whose civilization has rapidly advanced through fighting their own kinds, were all out at war against each other and many smaller kingdoms have perished and few dominants established their hegemony on the continent. This is when the story begins….

Minimum Recommended


• CPU: Celeron 433Mhz or above

• RAM: 64M

• Internet Connection: 56K Modem


• CPU: P-III 600Mhz or above

• RAM: 128MB

• Internet Connection: ADSL, Cable

. Graphics & Animations beyond normal On-line games.

Vivid animations in backgrounds, motions in characters and monsters, makes players to be absorbed in the game so easily.

. A simple efficient Interface.

A simple and easy to understand mouse-click User Interface adopted to make even beginners enjoy the game easily.

. Unique Battle System.

Basic Attacks and Skills with various use are realized and used closely together, which is different from the simple hit & using skill type battle system of normal On-Line Games.

. 3D Surround Sound

Diverse sound effects are powered by 3D Surround Sound, providing a more vivid and lively environment.

Introduction Game Features

Client Requirements


‘ ‘ The Legend of Mir3 ’ The Legend of Mir3 ’

. ‘The Sequel’….[The Legend of Mir3] is the sequel of the original [Legend of Mir2], maintaining and adding both basic & new features to the original. With new monsters, user interface, enhanced graphics and transportation methods such as ‘horses’, it provides more in-depth and vivid gaming experience to players. After the long struggle, the descendants of the expeditionary force living in Bicheon found the path to cross the "Mountain of Lamentation", which had been blocking the way out to the old continent. As time went by, monsters grew stronger and their attacks were getting even more fierce. Faced with imminent danger, the villagers decided to deliver a letter asking for a help from their motherland….

Minimum Recommended

• O/S: Win 95/98/ME/2000/XP

• CPU: Celeron 433Mhz or above

• RAM: 128M

• VGA: 3D accelerated graphic card

• Internet Connection: 56K Modem

• O/S: Windows 95/98/ME//2000/XP


• RAM: 256MB

• VGA: 3D accelerated graphic card

• Internet Connection: ADSL, Cable

. Gorgeous, realistic combat actions and effects.

Characters with nearly 20motions, battle system with beautiful graphics, surround sound, provides upgraded gaming experience.

. Enhanced User Interface.

Players shall enjoy the game more easily with a polished, convenient and upgraded User Interface.

. Improved Character Balance & hundreds of quests added.

Characters are balanced and various quests are added, based on the experience of Legend of Mir1 & 2. Providing tenseness and thrill to the game.

. Stable Operation

In Legend of Mir3, players shall experience improved service and stabilized server operation based on the experience of Legend of Mir 1,2.

Introduction

Client Requirements

Game Features


Contacts UsContacts Us

Actoz Soft Planning DivisionActoz Soft Planning DivisionAddress : Unseok B/D 1F, 132-3, Sungbuk-dong,Address : Unseok B/D 1F, 132-3, Sungbuk-dong, Sungbuk-gu, Seoul, Korea 136-020Sungbuk-gu, Seoul, Korea 136-020

Jin-Ho LeeJin-Ho LeeDirector / Strategic Planning DivisionDirector / Strategic Planning Division

Tel : +82-2-743-8260Tel : +82-2-743-8260

Fax : +82-2-742-0733Fax : +82-2-742-0733

e-Mail : e-Mail : [email protected]

Homepage: Homepage: www.actoz.com

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