Free-to-play titles and new releases are driving sales revenue within Sega's entertainment contents division (bottom image), which houses its video game operations, despite an overall decline in full-game sales.

As noted in the company's fiscal report for the quarter ended June 30, 2022, net sales across the division increased to 47.4 billion yen ($431.5 million) from 45.1 billion yen ($410.6 million), while operating income rose to 8.4 billion yen ($76.4 million) from 8.1 billion yen ($73.7 million). 

That sales upswing came despite dwindling full-game sales in the consumer sub-segment, with Sega selling 6.58 million units in Q1 2022 compared with 12.98 million units in Q1 2021. Free-to-play titles such as Phantasy Star Online 2 New Genesis and new releases like Total War: Rome Remastered helped pick up the slack, however, and according to Sega performed "strongly."

As the table below shows (top image), new game sales actually rose year-on-year to 1.06 million units from 790 million units, while free-to-play revenue increased to 12.4 billion yen ($112.9 million) from 11.1 billion yen ($101 million). Repeat sales of catalog titles, however, dropped to 5.52 million units from 12.19 million units. 

Overall, Sega explained the performance of its Entertainment Contents segment exceeded expectations, and is forecasting full-year sales of 213 billion yen ($1.9 billion) and operating income of 23 billion yen ($209.4 million) for the entire division. 

Across the company as a whole, consolidated net sales increased by 22.9 percent to 59.4 billion yen ($540.8 million), while profits totaled 2.94 billion yen ($26.7 million) -- compared to a loss of 3.3 billion yen ($30 million) this time last year.