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Sega Sammy Profit Surges 31 Percent For Year

Sega Sammy Profit Surges 31 Percent For Year

May 16, 2006 | By Jason Dobson

May 16, 2006 | By Jason Dobson
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More: Console/PC

Representatives from Japanese-headquartered pachinko, arcade game and video game firm Sega Sammy Holdings have reported the company’s results for the year ended March 31, 2006. The company experienced a 31 percent increase in net profit, as a decline in sales generated by its pachinko slot machines was offset by revenue derived from sales of video games as well as its arcade game business.

The company posted a net profit of ¥66.2 billion ($601.3m), an increase from ¥50.6 billion ($459.6m) posted a year earlier. Operating profit grew 13 percent to ¥119.1 billion ($1.08b), resulting from a 7 percent increase in overall sales to ¥553.2 billion ($5.02b).

Though Sega Sammy's pachinko and arcade business are still its biggest contributor by far, video game software sales during fiscal 2005 totaled 16.4 million units, comprising 4.1 million copies in Japan, 6.14 million in the U.S., 6.06 million in Europe, and 100,000 in other regions.

In Japan, sales of The King of Beetle Mushiking: Road to Greatest Champion for the Game Boy Advance exceeded expectations, while other titles such as Noryoku Trainer Portable, Pro Yakyu Team wo Tsukuro! 3, Pro Soccer Club wo Tsukuro! Europe Championship, and Ryu Ga Gotoku, the latest title from Toshihiro Nagoshi (and soon to be released in the West as Yakuza) were also strong sellers. Outside of Japan, Shadow the Hedgehog, which sold more than 1 million copies, and other titles from the Sonic franchise performed favorably for the company.

Looking ahead, Sega Sammy Group, which consists of 82 subsidiaries and 17 affiliates, stated that it will undertake aggressive corporate restructuring and business expansion measures in order to bolster development of the console business in growing overseas markets. The Group "plans to purchase competitive titles and brands, and acquire overseas development companies in order to obtain and increase its capacity for development", as seen by multiple recent acquisitions, including Sports Interactive and Secret Level.

For fiscal 2006, Sega Sammy is projecting total game software sales of 6.7 million copies in Japan, 6.3 million in the U.S., and 8.9 million in Europe, for a total of over 21.9 million copies. The company forecasts consolidated net sales of ¥682 million ($6.2m), up 23.3 percent year on year, operating income of ¥124 million ($1.1m), an increase of 4.0%, and net income of ¥75 million ($681,238), a rise of 13.3 percent for the fiscal year ending March 31, 2007.

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