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.