Sega saw its profits more than halved during the last fiscal quarter, while the company's video game business recorded a swing to operating losses.
The company blamed uncertainty in the Japanese economy, and said that demand for packaged retail games continues to soften -- although Sega says that demand for mobile games is expanding.
As such, Sega continues to gear itself towards that trend -- right now the company has 73 pay-to-play games on the market, and 61 free-to-play games, with that latter figure due to rise over the coming months.
Sega sold 1.7 million retail games during the last quarter, with 640,000 sold in Europe, 630,000 in the U.S., and 420,000 in Japan. Meanwhile, the company said that its digital game sales for mobile and PC were solid.
For the quarter ended June 30, 2014, Sega's consumer business recorded revenues of 21.4 billion yen ($207.9 million), up 13.3 percent year-over-year, and operating loss 282 million yen ($2.7 million), compared to operating income of 39 million yen ($378,800) year-over-year.
Overall, Sega saw revenues of 88.4 billion yen ($858.6 million), down 2.6 percent year-over-year, and profits of 5.5 billion yen ($53.4 million), down 57.4 percent year-over-year.