SEGA Sammy today announced their full year results with good news all round with the exception of one division. The strong results come after a hectic 2013 for the group in which SEGA was restructuring it’s core business, purchase of two high profile developers, the development of major resort complexes and expansion of some of their core development teams. The group also saw year on year growth for net income, hit the break to find out how the company did as a whole!
SEGA’s consumer division had a string of major releases over the past year but only one managed to break the million mark and the latest Sonic the Hedgehog title that appears to be the worst selling mainline entry to date. SEGA’s best seller for the fiscal year was The Creative Assembly’s much anticipated Rome II. Despite the title’s issues with the launch, it managed to sell 1,130,000 units making it the fastest selling title in the Total War series. Next up was Football Manager 2014 which sold 790,000 units which would make it the second fastest selling title the series (It should be noted that the Vita release of the title is not included in the report as it was released in April 2014)
Sonic Lost World climbed from the figure SEGA posted in their last quarter (640,000 units) with an additional 70,000 units sold bringing the total to 710,000 units. Next up was Company of Heroes 2, produced by Relic who were purchased by SEGA after their parent company THQ went bust. The real time strategy game managed to sell 680,000 units and has probably already made back the investment SEGA made when purchasing Relic via sales of the game and various DLC. Finishing up the list was Kazuma Kiryu’s latest adventure in Japanese history as Ryu Ga Gotoku: Ishin! managed sales of 390,000 units, some way off the intended 500,000 units sold target SEGA had but should reach it with budget re-releases.
All in all, SEGA sold 8,730,000 pieces of software with Europe being the top region for sales of video game software having bought 3,770,000 units, followed by North America (2,800,000) and Japan (2,150,000) In addition to SEGA’s video game business, their animation business continued strongly thanks to the release of “Lupid the 3rd vs Detective Conan The Movie” but sales in their toy division were weak and below expectations.
Thanks to the strong sales of their PC (2,640,000 units) and catalogue sales (3,790,000) helped SEGA’s consumer division record net sales of ¥99.8 billion, of which digital games (¥40 billion) produced the majority of revenue (Packaged good sales amounted to ¥38.8 billion) SEGA managed to make post a healthy ¥2 billion operating profit (£11,660,000 / $19,667,620) up from the operating loss they posted last year (-¥0.7 billion) Now with Atlus under SEGA’s belt and perhaps a quality Alien title around the corner, the group is expecting a massive growth in the future. The group is expecting a sizable increase in sales of packaged games (12,780,000, an increase of over 4 million units) with net sales to be ¥128.5 billion with net income to jump 230% to ¥6.6 billion (£38,491,200/$64,864,800)
AMUSEMENT MACHINE SALES AND AMUSEMENT CENTRE OPERATIONS
It wasn’t all sunshine and roses for SEGA though as their once mighty arcade division continued to post losses. SEGA’s best seller for the fiscal year was World Club Chamption Football Series generating revenues of ¥2.5 billion followed by Code of Joker generating revenues of ¥2.4 billion. What’s interesting about Code of Joker is that SEGA has recently announced that it would become a F2P title so seeing it’s future performance will be one to watch. Rounding off the list is Sengoku Taisen (¥2.1 billion) Border Break (¥1.5 billion) and StarHorse 3 (¥1.1 billion) Total sales were ¥38.6 billion (a decrease of 1% from the previous year) and the division saw operating loss of ¥1.2 billion yen, worse still the operating loss is set to continue next year with SEGA predicting a further operating loss of ¥1.7 billion.
The other part of the business, the amusement centres, continues to see further closure in the amount of domestic facilities. Whilst the division saw a 1% growth in net sales, climbing to ¥43.2 billion, it failed to make any sort of notable operating profit compared to last year where it at least managed ¥1.1 billion profit. But just like the amusement sales division, the amusement centre operations is set to lose money this fiscal year with a loss in the region of ¥0.6 billion and the closure of a further 7 centres.
PACHINKO AND PACHISLOT SALES
Par for the course, the greatest amount of money was once against generated by the Sammy side of the business having managed to generate revenues of ¥181.8 billion (Pachislot having produced ¥112.7 billion whilst pachislot ¥63.5 billion) Sammy managed to sell 301,575 Pachislot machines, an increase of 49% from the previous year and a further 200,225 units of Pachinko machine, with a decrease of -8% from the previous year. In total the Pachislot and Pachinko managed to post an impressive operating income of ¥45.2 billion (£263,651,600/$444,044,800)
CONCLUSION AND FORECAST
The group managed to post revenues of ¥378 billion with a net income of ¥30.7 billion (£179,073,100/$301,596,800). Also, their cash reserve grew from ¥174.2 billion to ¥202.7 billion.
For the up and coming year the group is expecting continued growth with revenues hitting ¥450.0 (£2,624,850,000/$4,420,800,000) but with net income down to ¥21 billion (£122.4 million/$206.3 million) finally it seems SEGA will have a major marketing push for their software this fiscal year as they announced the marketing budget would be ¥14.4 billion (£83.9 million/$141 million) no doubt in thanks to the releases for Alien: Isolation and Sonic Boom. That concludes another fiscal report, if you have any questions you would like to ask please feel free to comment!