Sega Sammy’s financial woes continue
Despite the recent success of titles like Mario & Sonic at the Olympic Games and Yakuza 3, Sega Sammy reported a $505 million net loss in the fiscal year ended March 31, compared to last year’s fiscal year net income of $733,000. The company attributed the loss in revenue to the continued downturn in popularity of the pachinko and arcade industry and slow video game sales in Japan.
While, Sega Sammy recognized that the video game industry is increasingly popular and that the demand for video game software continues to rise, it acknowledged that sales in Japan decreased this year compared to last. Because of that stumble in Japan, Sega Sammy reported an operating loss of 5.9 billion yen.
“As rebuilding our consumer video game business is crucial, we now need to review our game title strategy more flexibly to adapt ourselves to changes in the trend of the market,” said Koichiro Ueda, head of Sega of Japan’s public relations department.
To help generate profit going forward, Sega initiated a employee voluntary early retirement, and Sega Sammy disclosed its plan to achieve success for the upcoming fiscal year. Part of that plan is to continue selling off unprofitable amusement parks, creating “synergy” in the pachinko industry with Ginza Corporation and Taiyo Elec Co., Ltd. and to continue selling licensed film titles in overseas markets.
For next year’s fiscal year results, Sega Sammy is expecting revenue at about 470 billion yen.
[Via Forbes/Sega Sammy]
Tags: Financial
7 opinions for Sega Sammy’s financial woes continue
Taco Lord
May 13, 2008 at 10:56 am
If Sega is doing this, what is Sammy doing?
Sometimes Merges or buyouts don’t work… :C
yusaku
May 13, 2008 at 12:21 pm
The weird thing about this is that while the article does state that Sega’s struggling with arcade and game divisions.
The article never really goes into detail on what caused the video game department to fail and it mostly focuses on the arcade machine sections, which were by all accounts one of Sega’s major corner stones.
Heck, Sega started out as an arcade machine developer.
But it’s all weird, how does a Sega that sell as much as Mario&Sonic and many titles are doing well and the end result is just more losses?
Up until the end, Forbes painted a bleak picture only to have Sega-Sammy say that it expects a major profit next fiscal year. O…K…
Also please notice this too…
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paly
May 13, 2008 at 2:57 pm
sammy sucks, poor sega
Aki-at
May 13, 2008 at 6:46 pm
Both companies are losing money, Sammy is losing market share and SEGA’s development cost is too high whilst people are going to the arcades less and less, should be fine in a year or two with the job cuts taking place.
develin
May 14, 2008 at 12:20 am
@Sega Nerds
Guys, if you want to report on this at least make the effort to check the quarter report. Sega (like any other public (limited) company (as in a company that is permitted to offer its registered securities for sale to the general public) they have to release reports publically to their stockholders. You can find all the numbers there. For what the former Sega video game part look here http://www.segasammy.co.jp/english/ir/library/presentation/200802/index_13.html
There you could have read, that the 3rd quarter results DON’T INCLUDE YAKUZA 3. Nor do they include Valkyria, Condemed 2 or Sega Superstar Tennis. All of these are quarter 4 titles. Unsurprisingly domestic sales went down. As mentioned in the report “overseas sales was above last years level”.
Pachinko is suffering badly in Japan, mainly because of tighter restrictions, which are part of an attempt to decrease the Pachinko addicts. Add to that the lack of new products and you have a heavy problem - they have have revised their income prediction by 75 million.
Arcade titles are doing OK, but suffer from lower oversea sales. The numbers around the same level as last years.
Amusement parcs continues its slump, but they still expect a similar full year result - after “closing approximately 110 facilities “. Seems like that should solve the heavy loss there.
In total it seems that Pachinko is really the main problem, the rest seems under control. Hopefully the VG side can catch up to turn a more neutral FY result. And before you scream out - don’t forget that Sammy basically saved Sega from bancrupcy all those years ago…
I’d write more, but this is already too much for a comment.
yusaku
May 14, 2008 at 7:13 am
Forbes says one thing, Sega Sammy’s results show another…
Why am I not surprised…
ROJM
May 14, 2008 at 10:29 am
Because what cleverclogs Develin neglected to find out is this is the final report which includes the forth quarter. The actual final PDF report from sega will be released to stockholders and the public in june and that will be for the whole year, as far as this year is concerned its finished and the new fiscal year has already started.
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