Sega Nerds

Sega-Sammy posts Q1 financial reports - Graham cries with confusion

Posted by Graham. Filed under G, News, Worldwide. Tagged with Financial, Shares, Stock Market.

As I mentioned just yesterday, I know very little about the whole stock market, shares and financial side of life.  And my distinct lack of knowledge will certainly shine through with this post - as I read two stories which seemed to contradict each other… but apparently make perfect sense (at least my accountant friend informs me)

In yesterday’s post, we reported on the news that Sega-Sammy had their biggest increase in the Japanese market since 2004, due high demand for new Pachinko machines.

However today, TVG reportedthat Sega-Sammy had Q1 losses of up to £50m ($100m) - with poor Pachinko and arcade sales to blame.  While consumer (i.e Console games and toys) sales were up, they were still operating at a loss.

Sega Sammy’s financial woes continue

Posted by Chris. Filed under Chris, Japan. Tagged with Financial.

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]

Sega confirms Sega Racing Studio’s closure

Posted by Chris. Filed under Chris. Tagged with Financial.

It was rumored earlier today that Sega would be closing down its Sega Racing Studio. However, Sega has confirmed with Next Generation that the bad news is indeed true.

“Regrettably Sega today announced that it is to commence consultation regarding the unfortunate closure of the Sega Racing Studio in Birmingham, UK.

“The decision is part of a review of Sega’s Western Development Studios to ensure that each studio is a profitable entity in its own right, and unfortunately the Sega Racing Studio’s 5 year plan would not result in a successful return for the Sega business moving forward. Sega would like to stress that there will be no changes within their other internal development studios.”

So while it appears every other studio is safe for the time being, it’s probably safe to say everyone is on notice that they must deliver profitable titles or else.

Sega Sammy closes Sega Korea

Posted by Chris. Filed under News. Tagged with Financial.

It looks like Sega Sammy’s financial fallout isn’t through yet as the company announced the dissolution of Sega Korea today. According to financial documents, the reason is for “global business optimization,” and Sega Sammy claims the move will “have no significant impact on the company’s consolidated operating results.”

What’s more is that Sega Sammy also announced the closure of Sammy Europe Limited late last month. After the recent news that the company is abandoning plans for an amusement park near Tokyo despite investing a significant amount of money, it’s clear its trying to cut its losses and stem any more blood flow as soon as possible.

All this is a result of Sega Sammy’s most recent financial report where it disclosed that it lost nearly $250 million last year. Soon after that announcement, Sega Sammy laid off more than 400 employees and closed more than 100 arcades.

[Thanks, Cube_b3!]

Is Sega in trouble of being bought out?

Posted by Chris. Filed under Chris, News. Tagged with Financial.

Stock market opinion and analyst site Seeking Alpha posed an interesting question - Could Sega be the target of a takeover? It’s no secret Sega Sammy has hit on hard times over the past few months. Both Sammy’s pachinko and even Sega’s software division haven’t met company expectations and have even made it hard on the former hardware developer to turn a profit.

The future doesn’t look much better than the past, either as Sega has forecasted a full year loss in excess of $242 million and has been forced to close more than 100 arcades and most recently had to let go of 400 employees.

This comes on the heels of Sega of Europe President Mike Hayes predicting the company would be purchasing even more development companies. Of course, those plans are likely on hold now that the company is on red alert to try to stop the bleeding.

Keep reading to see what the possible future holds for Sega Sammy.

Sega-Sammy loses money, lays people off

Posted by George. Filed under News. Tagged with Financial, Pachinko, SEGASammy.

It doesn’t matter how successful Sega is in the software division, they have Sammy to hold them down. However, the joint company expects to lose about $26 billion yen ($242 million dollars) because of slow pachinko machine sales.

Apparently, the pachinko machine industry has been dented by the Wii console. Due to this, Sega had to fire 400 employees (that made roughly 5 percent of its workforce). Shares in Sega-Sammy fell 5.9 percent, the lowest closing price since the merger.

IGN posted this bit of news:

“Due to Sega failing to respond to changing business environment, the operating performance of its core businesses, including the amusement facilities business and domestic consumer business, has not been performing well,” said Hajime Satomi, chairman and CEO.

Sega might purchase more companies

Posted by Chris. Filed under Chris. Tagged with Financial.

In the wake of Activision and Blizzard teaming up to create the biggest publisher in the industry, it appears that Sega is looking to get in on the action. In an interview with MCV, Sega Europe President Mike Hayes said it could be looking to make some new acquisitions

“The growth challenge is never over,” he said. “Therefore like most other publishers we are always on the look-out for new signings – product or company.”

The president also explained why Sega’s been consistently hiring new people. “We have taken staff on at a rapid rate simply because we have been building our infrastructure and studios to enable us to be a successful publisher through Europe,” Hayes said.

So with Sega now on the prowl for new companies, which do you think they should look to pick up?

[Via MCV, Editors' note: Image added because I couldn't think of anything better.]

Sega Financial report!

Posted by Ryan. Filed under Ryan. Tagged with Financial.

Sega chooses some guy for VP position at Secret Level

Posted by Hudson. Filed under News. Tagged with Financial, Golden Axe, SEGASammy.

Right about now you might be wondering “what the hell is Secret Level?” Well, it’s a smallish Sega-owned developer that’s responsible for the new Iron Man and Golden Axe titles now in development.

And who, then, is responsible for Secret Level? Why, newly named vice president Darrin Stubbington of course! 1up.com reports that newcomer Stubbington will be part of an effort to make Secret Level a more Western-oriented developer. Join us here at Sega Nerds as we appraise this man’s abilities strictly on his mug shot.

[original article at 1up.com]

SegaSammy suffers 1st quarter (2007) losses

Posted by Graham. Filed under G, News. Tagged with Financial, Pachinko.

Sega Sammy Holdings Inc has announced its first quarter financial report, and all is not so fine and dandy for the company as they slip into the red.

The company has shown a net loss of 5.08 billion yen ($42.87 million US) during the three months to June, in contrast to the previous year’s profit of 779 million yen.

Surprisingly, the loss is not due to the sales of Pachinko machines, which we reported on earlier this year to have suffered a big fall in sales. Rather, the loss has been reported due to suffering sales of games and toys aimed at young children.

It has been said that in Japan (and most of Asia) fewer young couples are having children which, it seems, has become so prevalent that it is affecting overall sales of products aimed for the younger audiences.

“…the company said it faced tough competition for other forms of entertainment, particularly those geared towards children. Japan has one of the world’s greyest populations with young people having fewer and fewer children.

Sega Sammy said one ray of hope was its “Dinosaur King” card games, which have grown in popularity after becoming a Japanese television animation earlier this year.”