Sega Sammy has posted financial results for the first half of the current fiscal year, noting a significant decline in both revenue and profit due in part to weak demand for its video games.
The company admitted that its consumer business saw "sales of new titles hover at weak volumes," and said that in the future it will need to adapt to the rapidly changing video games environment.
It noted that the market is now shifting towards social networking services and smartphones, and that the company will need to meet demand in these areas.
The report also explained that the aftermath of the Great East Japan Earthquake that took place on March 11, 2011, added to the drop in revenue and profits.
"The availability of parts and materials and the struggle to cope with an expected prolonged shortage of electricity supply" led to big issues in this sector, explained the company. However, it noted that there are now signs of recovery, and the market is finally more solid.
For the half year ended September 30, 2011, Sega Sammy posted revenue of ¥152.6 billion ($1.95 billion), down 29.9 percent compared to the same period last year, and profits of ¥4.0 billion ($51.2 million), down a staggering 83.7 percent year-over-year.