SEGA Sammy results for fiscal year 2010

SEGA Sammy Holdings have posted remarkable results for the fiscal year of 2010 that has even beaten their intial projections. It has seen profits doubling from the previous year’s 20.2 billion yen to 41.5 billion yen (£317 million/$515.5 million) an amazing turn around for the group considering the heavy losses they incurred only a few years back. For those who would like a read through SEGA Sammy’s various segments, or catch up on sales of video games, arcade, pachinko and pachislot units, please read on.

Consumer Business

SEGA’s Consumer Business was the only division of the group to have operating profits down from the previous fiscal year from 6.3 billion yen to 1.9 billion yen (Or £14.5 million/$23.5 million) although one should be mindful that the previous year has the mega-seller in Mario & Sonic at the Winter Games as well as the fact that Yakuza: Of the End was delayed into next fiscal year. Below are the results for some of the major games released in fiscal year 2010 for SEGA;

Sonic Colours: 2.18 million
Iron Man 2: 1.54 million
Vanquish: 830,000
Shogun 2: Total War 600,000
Phantasy Star Portable 2 Infinity: 370,000

Adding to those results, it shows that Sonic Colours has sold an additional 330,000 units, whilst Vanquish has unfortunately only done another 10,000 for the period between Jan – Mar 2011. Shogun 2: Total War saw some impressive numbers, although decline over Total War: Empires (Which still remains the most successful Total War title) and Phantasy Star Portable 2 Infinity continues the decline from the original Phantasy Star Portable. Iron Man 2 posts over a million but do keep in mind it was over several consoles, so not as impressive when you take into context how many consoles it was released on. For future, SEGA is predicting that the consumer business’ net sales will rise from 88 billion yen (£666 million/$1.08 billion) to 120 billion yen (£913 million/$1.48 billion) which will see operating profits rise from 1.9 billion yen to 4.5 billion yen (£33.9 million/$55.68 million)

Arcade and Amusement Centre Operations

Once more SEGA’s arcade business comes to be their most lucrative. The division saw operating profits beat expectations and posted an impressive 7.3 billion yen (£55.8 million/$90 million) however, it was not all good news for the arcades, in a seperate segment, SEGA Sammy confirmed that for the next fiscal year SEGA are looking to close down 13 arcades whilst only opening 5 arcades. Despite the Amusement Centres posting a minor operating profit of 300 million yen (£2.29 million/$3.71 million) the amusement centres are predicted to lose the group 1.6 billion yen for the fiscal year of 2011 (£12.2 million/$19.7 million) although any losses incurred should, realistically speaking, be easily covered by the rest of the group. Below you will find SEGA’s best sellers at the arcades and it’s no surprise to see the trading cards game helping to bolster the strong profits for this segment.

Sengoku Taisen: 6.4 billion yen (£48.9 million/$79 million)
WORLD CLUB Champion Football Intercontinental Clubs Series: 3.8 billion yen (£29 million/$47 million)
Sangokushi Taisen 3 Series: 2.6 billion yen (£19.8 million/$32 million)
Border Break: 2.5 billion yen (£19.1 million/$30.9 million)
StarHorse 2: 2.0 billion yen (£15.2 million/$24 million)

Finally I should add that SEGA predicts a dip in the operating income for the arcade machines sales for the fiscal year of 2011 to 4 billion yen (£30.5 million/$49.4 million) this despite an increase in net sales from 47.2 billion yen to 50 billion yen (£382 million/$618 million)

Pachislot and Pachinko Machines

And now we move onto the major money maker of the group. As with almost all financial results I’ve reported, the pachislot and pachinko machines have been the bread maker for the company and this year is no different. Sammy saw 302,270 pachislots sold whilst they had 343,188 pachinko machines sold. Despite missing targets on the amount of pachinko units sold, the segment beat expectations of operating income from 58.5 billion to 64.2 billion yen (£490 million/$794 million) at impressive amount and an amount that helps to establish the group as one of the strongest Japanese companies to be involved directly in entertainment.

Conclusion

The SEGA Sammy group continues to show strong profitability after the terrible fiscal years of 2008 and 2009 in which saw the group lose a total of $700 million if I recall correctly. However with the current fiscal year and the ones prior, the group has restored to a strong level of health and the consumer business should be returning strong in the fiscal year of 2011 with major releases such as Yakuza: Of the End, Sonic Generations and Mario & Sonic at the Olympic Games 2012. The group has announced though that they expect profits to fall next year as they expect net income to go from 41.5 billion yen to 33 billion yen (£252 million/$408 million) so though lowered, still a relatively large number in the industry.

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