While many major Japanese game companies seem to be struggling to stay healthy in the face of a strong yen and Western market factors -- Capcom yesterday posted a dramatic 90 percent profit decline and Nintendo opened up a $288.4 million loss in its first quarter -- the picture is a bit better for Sega, which turned a profit in its own first quarter report today.
Sega Sammy, the holding company that is parent to a group that also includes arcade and pachislot businesses alongside Sonic house Sega's consumer software operations, saw a 7 billion yen ($80.8 million) profit for the three months ending June 30. Contrast that with a 10.3 billion yen ($118.9 million) loss in the same period last year. Sales are also up, rising 51 percent year over year to 91.3 billion yen ($1.05 billion).
But the company still struggles with declining overseas sales, with 3.3 million software units sold in total -- largely contributed by Iron Man 2 and Alpha Protocol -- the latter of which received a tepid critical reception, and according to Sega West president Mike Hayes, "hasn't sold what we've expected."
"Demand was generally weak in the U.S. and European markets due to the headwind like sluggish personal consumption," the company said. The consumer business, which includes home video games, individually reported a 636 million-yen ($7.4 million) loss, then -- but the figure represents a drastic narrowing on the 4.5 billion-yen ($52 million) loss in the segment for the same period a year ago.
But the company's largest share still comes from overseas markets -- about half, or 1.68 million units, of its total software sales came from North America, with most of the remainder in Europe. Sega sold just 270,000 units on its home shores of Japan during the quarter.
Like Capcom yesterday, Sega stated its intention to address its challenges with a push into the mobile and social game market: "The Group needs to adapt to changing business environment in which the market demand for new content geared to social networking service (SNS) and smartphone is expanding," said Sega.
The decrease in sellings might have also to do with the cuality of the product itself. It's not that Iron man 2 was he best game ever, right? I enjoyed Alpha Protocol a lot and it's a shame that there it's not gonna be a sequel.
And I will not get into that anymore and it was my company till one month ago....mouth closed :)
Just best wishes for the next games from SEGA (vanquish looks cool) as I have quite a lot of friend there and I still have some love for the company!
Sega just needs to make a Sonic that's actually good. Also, they seriously need to return to the original Naoto Oshima character design. This modern Sonic the Hedgehog looks strung out.
I've always held the opinion that management is running the company into the ground, when I look at their predicament. I say this because they have a wide variety of popular and established IPs.
There are definitely new opportunities and new markets to look at, but when they fail to do well in a market where they traditionally excelled at, it's hard to have faith in them.
I suspect we won't be seeing a Kinect ready Space Channel 5, for example. A popular IP like Sonic, probably won't have a Facebook App (raising Chao was fun on the Dreamcast, why not do it on FB?).
These successful IPs and brand names can allow SEGA to hit the ground running when they hit these other markets. Quality is definitely a key ingredient to success, and so I believe that updated ports of these older titles might be the best option, rather than creating a new game that will fall short of fan expectations (Sonic 4 anyone?).
The design is of its time and its a great one. How Sega has used the blue rodent in the past several years is what could have used some change. Sonic was always about attitude and this new design really redefines sonic in a way that really suits the time.
And I will not get into that anymore and it was my company till one month ago....mouth closed :)
Just best wishes for the next games from SEGA (vanquish looks cool) as I have quite a lot of friend there and I still have some love for the company!
There are definitely new opportunities and new markets to look at, but when they fail to do well in a market where they traditionally excelled at, it's hard to have faith in them.
I suspect we won't be seeing a Kinect ready Space Channel 5, for example. A popular IP like Sonic, probably won't have a Facebook App (raising Chao was fun on the Dreamcast, why not do it on FB?).
These successful IPs and brand names can allow SEGA to hit the ground running when they hit these other markets. Quality is definitely a key ingredient to success, and so I believe that updated ports of these older titles might be the best option, rather than creating a new game that will fall short of fan expectations (Sonic 4 anyone?).
The design is of its time and its a great one. How Sega has used the blue rodent in the past several years is what could have used some change. Sonic was always about attitude and this new design really redefines sonic in a way that really suits the time.