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Sega Posts Lower Yearly Sales, Net Loss

Publisher Sega Sammy (Sonic Unleashed) announced an annual sales drop and $239 million loss, citing a poor global economy, a sluggish arcade business and “leveled off” Japanese game demand -- but expects a rebound this year.
Sega Sammy on Thursday posted lower fiscal year sales from the previous year, citing a poor global economy, a sluggish arcade business and video game software demand that has “leveled off” in Japan. The company posted a net loss of ¥22.88 billion ($239.26 million), narrower than the previous year's loss of ¥52.47 billion ($548.69 million). But the company still managed to pull off operating profit of ¥8.36 billion ($87.45 million) for the year ended March 31, an improvement from the prior year’s operating loss of ¥5.83 billion ($60.97 million). Sales were ¥429.19 billion ($4.49 billion), down 6.5 percent year-on-year. Although Sega said that software sales in Japan have “leveled off… due to widespread proliferation of the current generation of game platforms”, demand for software has remained “firm” in North America and Europe. Sega cited solid year-end sales of Sonic Unleashed and Football Manager 2009, as well as continued sales of Mario & Sonic at the Olympic Games. Other strong performers were Phantasy Star Portable for PSP and Ryu Ga Gotoku 3 (a.k.a. Yakuza 3). However, Sega said that other unspecified titles “performed weakly.” Also released near the end of Sega’s most fiscal year were the M-rated Wii titles Madworld and House of the Dead: Overkill, which both logged weak sales in the U.S. in their opening months. Sega Sammy’s home video game business sold 12.73 million units in Europe, 12.49 million in the U.S. and 4.23 million units in Sega’s homeland of Japan and other territories, for a total of 28.47 million units globally. Sega’s business also consists of pachinko and pachislot machines, as well as amusement machine sales and amusement center operations. Citing a sluggish amusement center business, Sega said it closed 47 domestic centers and opened six. Sega operated 322 centers and the end of the fiscal year. In the year ahead, Sega said that it plans on improving its home software business by "strengthening alliances" across North America, Europe and Japan, and improving efficiency by "narrowing down the number of titles handled." For the current fiscal year, Sega Sammy forecast net sales of ¥420 billion ($4.39 billion, down 2 percent year-on-year) and net income of ¥15 billion ($156.82 million), up from this year's loss of ¥22.88 billion ($239.26 million).

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