Profits falter despite rising game sales at Sega Sammy

Net sales and profits are in decline at Sega Sammy despite rising video game sales.

Net sales and profits are in decline at Sega Sammy despite rising video game sales. 

According to its fiscal report for the quarter ended December 31, 2020, consolidated net sales fell by 25.2 percent year-on-year to 210.1 billion yen ($1.9 billion). Profits also dropped to 6.2 billion yen ($59 million) from 22.9 billion yen ($217.9 million) over that same period. 

It was a different story in the company's consumer sub-segment, which houses its video game operations, with rising digital sales of PC and console titles delivering net sales of 102.4 billion yen ($974.6 million) -- compared with 90.2 billion yen ($858.5 million) during the previous year. 

Operating income increased to 29.9 billion yen ($284.5 million) in Q3 2021 from 17 billion yen ($161.8 million) in Q3 2020, with Sega gaining traction due to the launch of next-generation hardware and the "rising demand for games" caused by the COVID-19 pandemic. 

The company also singled out the "strong performances" of new releases including Football Manager 2021, Yakuza: Like a Dragon, and Shin Megami Tensei III Nocturne HD Remaster. Overall, which helped drive overall software sales to 34.2 million units (as shown below) -- compared with 19.3 million units for the same period in the last fiscal year. 

Looking ahead, Sega explained its games business its "expected to significantly exceed the previous forecast" due to steady sales of catalog and free-to-play titles and strong pre-orders of Persona 5 Scramble Strikers

As such, it's now forecasting full-year net sales of 136 billion yen ($1.3 billion) and operating income of 36.5 billion yen ($347.4 million) within its consumer sub-division by the end of the fiscal year on March 31, 2021.

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