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Sega Sammy profits hit by weak game sales

Sega Sammy profits hit by weak game sales

February 3, 2012 | By Mike Rose

Sega Sammy has posted financial results for the first nine months of the current fiscal year, with a loss in its video game division leading the company to record a drop in revenue and profits year-over-year overall.

The company blamed weak demand for video games in the U.S. and Europe, due to "sluggish personal consumption" from customers. It noted that it needs to adapt to the business environment which is now focused on social games and smartphone games.

For the nine months ended December 31, 2011, the company shipped 12.6 million video games worldwide, compared to 13.6 million shipped year-over-year. Broken down, this figure was made up of 4.4 million shipped in the U.S., 6.4 million shipped in Europe and 1.8 million in Japan and other regions.

In particular, Sega Sammy noted that Mario & Sonic at the London 2012 Olympic Games sold 2.4 million units in the U.S. and Europe, while Sonic Generations sold 1.6 million units in Japan, Europe and the U.S.. The Japan-only Hatsune Miku Project Diva Extend sold 290,000 units.

In terms of mobile game sales, Kingdom Conquest recorded 2 million downloads during December 2011. The company noted that it has since launched an Android version of the game, and expects "widespread use" of the game.

Elsewhere, the company said that its pachislot and pachinko industry "remained solid" despite the effects of the Great East Japan Earthquake. It said that consumers were responding well to "more accessible entertainment."

For the aforementioned period ended December 31, 2011, Sega Sammy posted revenue from video game content of 49 billion ($643.0 million), down 2.6 percent compared to 50.3 billion ($660.1 million) year-over-year, while operating loss was 5.5 billion ($72.2 million), compared to profits of 2.8 billion ($36.7 million) year-over-year.

Overall, the company posted revenue of 311.7 billion ($4.1 billion), up 0.5 percent compared to 310.1 billion yen ($4.1 billion) year-over-year, and profits of 34.4 billion ($451.2 million), down 6.6 percent compared to last fiscal year's 36.8 billion ($483.2 million).

Concerning its forecast for the whole fiscal year, Sega Sammy expects revenues of 440.0 billion ($5.8 billion), down 10.9 percent year-over-year, and profits of 38.0 billion ($498.7 million), down 8.5 percent year-over-year.

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