Game sales drive strong profit growth for Sega

The big news out of Sega this week is that its revenues and profits were up for the second half of its fiscal year, with especially strong profit growth from its video game businesses.

Sega Sammy reported its earnings for the first half of its fiscal year today, and while revenues were slightly down at the Japanese entertainment giant year-over-year, profits rose roughly 43 percent to ¥14.6 billion (~$135 million USD).

This is significant because the majority of that was generated by Sega Sammy's Entertainment Contents division, which encompasses its video game business as well as animated film, toy, and amusement businesses. The division reported ¥12.7 billion (~$117.5 million) in profits on ¥115.8 billion (~$1.07 billion) in net sales, roughly double the profit generated by the division during the same period last year -- even though net sales only went up about 8 percent year-over-year.

That surge in profits is chiefly attributed to strong sales of its digital games, including mobile F2P games like Fist of the North Star LEGENDS ReVIVE and League of Wonderland, though it notes it also saw "solid performance" from sales of packaged games (with 11.3 million units sold during the six-month period) and its Mega Drive Mini retro console. 

Looking ahead, the company says it aims to grow the scale and profitability of its mobile games to bolster its digital games business. On the packaged games front, it still plans to ship Persona 5 Royal (pictured) and Mario & Sonic at the Olympic Games Tokyo 2020 in its third (and current) fiscal quarter, which closes December 31st.

By the time Sega Sammy's current fiscal year ends (March 31st, 2020), the company predicts it will have earned profits of ¥27 billion (~$250 million) on ¥390 billion (~$3.6 billion) in revenues -- roughly twice as much profit as it generated in the year prior.

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