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Sega Sammy Profits Drop 23%, Despite Yakuza

Profits have dropped by 23% at video game/arcade publisher Sega Sammy, with the company weighed down by disappointing pachinko sales, despite steady sales from Sega’s arcade and home business, including highlights such as Yakuza 2 in Japan and the
Officials from Sega Sammy Holdings have released details of the company’s nine month financial earnings from April to December last year, in which profits fell by 23 percent. Net income for the nine month period was put at ¥49.38 billion ($409m), down from ¥63.49 billion ($526m) at the same time the previous year. Sales for the same period fell by 3.9 percent to ¥404.29 billion ($3.35bn). Although the company did not announce quarterly sales calculations based on the company’s fiscal first half, this suggests third quarter profits of ¥11.38 billion ($94m), down from ¥38.59 billion ($320m) the previous year. The downturn in profits and revenues were primarily blamed on falling pachinko sales from the Sammy side of the business, which were not offset by rising revenue from the company’s amusement center operations. During the first nine months of the year, seventeen new amusement centers were opened in Japan and sixteen were closed, for a total of four hundred and sixty-three. The company’s mobile phone and video business also performed well, although toy sales were described as “soft”. Sega’s home video games business reported worldwide sales of 14.7 million units of software during the nine months, 4.4 million in Japan and Asia, 5.7 million in the U.S. and 4.5 million in Europe. The strongest selling titles in Japan were Oshare Majo Love and Berry, aimed at young girls, on the Nintendo DS and Ryu ga Gotoku 2 (aka Yakuza 2) on the PlayStation 2, which has sold over 500,000 copies since its Japanese launch. In the West Sonic the Hedgehog and other Sonic titles were said to have sold “well”. The company made no changes to its full year predictions, which stand at a profit of ¥60 billion ($497m) on sales of ¥580 billion ($4.81bn). However these forecasts were cut by 20 percent in January, with Sammy’s pachinko business again blamed for problems in introducing new slot machine titles.

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