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Sega Sammy Reports $105 Million Q1 Losses
by David Jenkins
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August 6, 2008
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Japanese holding company Sega Sammy reported considerable losses on its first fiscal quarter, in large part due to the ailing Japanese arcade and pachislot business.
During the quarter, net sales fell by 11.4 percent to ¥74.60 billion ($685.6m), while net income fell from a loss of ¥5.09 billion ($46.8m) twelve months ago to a new figure of ¥10.53 billion ($96.7m).
Sega Sammy execs say a slowdown in global and local economic conditions have had a negative impact on its broader business, while pointing in particular to a decline in the pachislot and pachinko arcade market.
Sammy’s pachinko business reported a loss of ¥4.35 billion ($40.0m), while Sega’s smaller arcade business reported an operating income of ¥703 million ($6.4m).
However, the company’s home video games business continues to see solid sales. Mario & Sonic at the Olympic Games has now shipped 7 million copies worldwide, while movie tie-ins Iron Man has now sold 1,840,190 units in the U.S. and Europe. The currently Japan-only Valkyria Chronicles is also described as having performed well, with 147,240 units sold.
Overall the company reported 6,890,000 unit sales of software during the quarter, of which 3,160,000 units were in U.S., 2,890,000 in Europe and 830,000 units in Japan.
Despite these results, the company’s home video game business still reported an operating loss of ¥4.12 billion ($37.8m), from net sales of ¥30.53 billion ($280.4m).
The company is retaining its existing full year forecast of ¥ 470 billion ($4.3bn) in net sales and ¥ 5 billion ($45.9m) in net income.
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Sega's lineup this year is pretty original, if you ask me. I figure they were in a holding pattern for a while until the console war settled a bit.
Not that anyone asked, but to elaborate a little more it seems like they broke up their elite development teams. Sonic Team today is nothing like it used to be. I got really excited when I saw sonic unleashed and now I hear there is sword play in it... I want to trust them, but like a dog that has been beaten, it will take time to gain my trust. :)
To me it's just that the yakuz... I mean, Sammy is draggin them down big time. They bought Sega coz they were cash flush and knew that their business was gonna fade in the long run. As soon as the turnaround is in motion, it will be time for Sega management to take over, and re-ditch Sammy...