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Physical games continue to drive sales for Sega Sammy

Physical games continue to drive sales for Sega Sammy

November 3, 2017 | By Alissa McAloon

Between this year and last, Sega Sammy has nearly doubled the number of physical game copies sold during the first half of its fiscal year, though the actual money brought in between the first half of the two years remained about the same.

Following the end of the first half of its 2017-2018 fiscal year, Sega Sammy has released a financial report detailing the performance of both its entertainment business and its company overall. 

As a whole, Sega Sammy reported net sales of ¥194.7 billion (~$1.7 billion) for the six month period ending September 30, marking a 14.9 percent increase from the ¥169.5 billion (~$1.5 billion) reported during the same period last year.

Likewise, company-wide operating income rose to ¥25.8 billion (~$225.7 million) for the period, a 74.5 percent increase from the preceding year. Of that, ¥10.1 billion (~$88.3 million) can be attributed directly to its Entertainment Contents department, while roughly ¥5.5 billion (~$48.1 million) is tied directly to its video game-related operations.

Entertainment Contents also saw a 3.8 percent year-over-year increase in sales for the first two quarters, coming in at ¥101.5 billion (~$887.8 million).  That department houses Sega Sammy’s video game operations along with its animated film, toy, and amusement center businesses.

Overall, the company saw the release of 16 physical games during the first half of the year: 3 in Japan, 6 in Asia, and 7 in North America and Europe. That number is down from the 21 games it had released at this same point last year, but the company notes that sales of packaged video games still nearly doubled year-over-year, coming in at 8.7 million copies sold for the period compared to last year’s 4.7 million.

That jump, it says, is due in part to the strength of its classic Sonic the Hedgehog revival Sonic Mania, which debuted in August. Total War: Warhammer 2 also saw release in the past two quarters, along with a new episode of Phantasy Star Online 2, and continually update and event support for the mobile games Hortensia Saga and Puyopuyo Quest. Additionally, Sega Sammy says it saw strong sales for Magia Record: Puella Magi Madoka Magica Side Story as well.

Overall, physical games continued to outsell digital titles, bringing in a total of ¥27.1 billion (~$237 million) during the quarter. That makes for an 18 percent year-over-year increase. Meanwhile, digital games for the first two quarters came in at ¥19.3 billion (~$168.8 million), a 16 percent decrease from the ¥23 billion (~$201.2 million) reported last year.

With 22 more titles due out this fiscal year, the company expects to see its Entertainment Contents arm reach ¥220 billion (~$1.9 billion) in sales by March 2018, with packaged games accounting for ¥51.5 billion (~$450.7 million) of that estimate and digital for ¥59 billion (~$516.3 million).

Despite the year-over-year increase in the number of packaged games sold overall, physical units sold fell in both Japan and Asia between this year and last, though a 147 percent increase between North America and Europe helped Sega Sammy keep its numbers steady. In Japan, only 420,000 physical game copies were sold, a 58 percent drop from the year before. Meanwhile, the number of physical games in Asia fell by 44 percent year-over-year, with only 230,000 units sold during the past six months. 

However, it is worth noting that Sega Sammy’s catalog of games released prior to the 2017-2018 fiscal year was a driving force behind the numbers in its first two quarters. Across all four regions, new titles were responsible for 3,150,000 units sold while repeat games sold 5,500,000 copies altogether. 

Sega Sammy expects that trend to reverse itself by the end of its fiscal year. Its estimates currently clock its end-of-year unit sales at 7,580,000 copies for new titles and 4,020,000 for repeat games.

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