Inspirational second-quarter improvements at Sega Sammy Holdings
Sega Sammy Holdings Incorporated, a Japanese gaming conglomerate, has reportedly announced its financial statistics for the three months ending in June, showing a net profit increase of over 189 % over the financial year to around $26.7 million.
Inside Asian Gaming reported the optimal outcome for the Yokohama-based powerhouse. It came after Sega Sammy Holdings posted a $29.9 million loss for the same three-month period last year due to the catastrophic effects of the coronavirus pandemic.
According to the source, when the company’s $26.3 million net profit for the first three months of the year is subtracted, the most recent figure translates to a 1.5 % increase.
As every good business knows, the key to success is a comprehensive and diverse portfolio. Sega Sammy Holdings Incorporated is one of the world’s foremost manufacturers of in-home video and land-based arcade games and a supplier of pachinko in branded parlors and pachi slots machines all over Japan.
In addition to the non-gaming Phoenix Seagaia Resort on the southern Japanese island of Kyushu, the conglomerate owns a 45 % ownership in the Paradise City integrated casino resort in South Korea.
Many can learn from the principles of diversification by following the basic principles. To maximize your returns, diversify your investments to limit the amount of risk exposure.
Although certain risks, such as systemic risks, cannot be avoided, unsystematic risks, such as commercial or financial risks, can be hedged against. All the hedging in the world did not account for the Pachinko effect.
The Pachinko Effect
Sega Sammy Holdings Incorporated reportedly disclosed that its positive second-quarter performance was primarily due to increased volumes from its pachinko, pachislot, arcade, and video games dealings. The conglomerate is working with Genting Singapore Limited to get permission to bring an integrated casino resort to the Japanese city of Yokohama.
The company’s overall revenues for the second quarter climbed by nearly 23% year on year to $539.3 million, with its games businesses accounting for about 80% of that total. The company claimed that net pachislot and pachinko sales had increased by nearly 300% to just over $94 million, while the accompanying sector loss increased by just over 82% to $13.5 million and change.
Either way, an increase in a year, reflected quarter to quarter, is impressive no matter how you look at it, so what’s the secret?
Look to Paradise For Results
The secret is the top casino games at Paradise City. The Japanese giant reportedly announced that net second-quarter sales at its Phoenix Seagaia Resort and Paradise City businesses increased by 234 % year on year to $14.1 million. Its associated segment loss improved by just under 8.5% to $17.8 million.
Proving the diverse formula and integration with others has paved the way for better than expected results.
Speculate to Accumulate
Sega Sammy Holdings Incorporated is ready to speculate, and the last quarter shows these tactics are paying off. The Japanese gaming giant has reportedly stated that it is now willing to spend up to $1.09 billion to build an integrated casino resort in Yokohama.
According to GGRAsia, the Tokyo-listed company partnered with Asian casino specialist Genting Singapore Limited earlier this year in the hopes of running the envisioned Las Vegas-style complex on a 116-acre waterfront plot near Yamashita Park.
The source says this new consortium is now competing with Macau gambling powerhouse Melco Resorts and Entertainment Limited for the chance to be chosen as the preferred operating partner for Yokohama’s bid to secure one of the federal government’s three casinos licenses.
What’s more, it won’t be cheap. According to Maybank Investment Bank Berhad, a Malaysian investment bank, realizing the envisioned Japanese casino resort might now cost the collaboration as much as $12 billion.
Who is Genting Singapore LTD?
Genting Singapore Limited, for its part, is in charge of the massive Resorts World Sentosa development in Singapore and has recently added local construction firms Obayashi Corporation, Takenaka Corporation, and Kajima Corp, as well as security specialists Sohgo Security Services, to its Yokohama-based consortium.
Yokohama In Detail
Yokohama is about 17 miles south of central Tokyo. It has a population of about 3.7 million people who are reportedly eager to host one of Japan’s upcoming trio of integrated casino resorts under a 40-year license.
However, before Sega SS and Genting can begin building, the city must choose a foreign firm to manage the proposed gambling-friendly development and submit its completed license application to a panel of government selectors by April 2022. Proving there is still a way to go, and nothing is a given.
So What’s Next?
Uncertainty is still in the air, but Sega Sammy Holding Incorporated has stated that it will continue to bolster its efforts to lure guests to its Phoenix Seagaia Resort and Paradise City properties by ‘primarily focusing on individual customers’ demands.’
The company reportedly stated that this procedure might take a little longer in South Korea due to the country’s government’s continued concern about ongoing coronavirus-related travel restrictions.
One thing’s for sure people need entertainment, and gambling is more popular than it’s ever been. Forward thinking individuals will do well to plan well ahead and expect some dips and turns but ultimately, the industry is thriving, pandemic or no pandemic.