SEGA Sammy posted their half year results for the period ending September 30th 2011. A difficult period saw that the publisher declined in both revenue and profit, numerous reasons from the natural disaster that struck Japan earlier this year that still holds ramification for the publisher today, to the weak global economy that is affecting consumer sales. In these tough times, read on to find out how the group managed.
Consumer Business
One of SEGA’s consumer divisions weaker periods, the company welcomed strong and steady demand in its native Japan whilst stressing sluggish demand in overseas market, perhaps key to note the lack of large hits that fill SEGA’s last two periods several times over. SEGA’s licensed title Captain America, the last with Marvel, sold 450,000 units, perhaps not the return the publisher was hoping when they signed the deal with Marvel. New IP and Kinect exclusive Rise of Nightmares however did a stand out 200,000 units, which I believe is fantastic for an add on title. Rounding off the report, SEGA mentioned Sakatsuku Plus 7 Euro, their football management title in Japan, selling 200,000 units as well. In total, the division saw 1,060,000 games sold in Japan, 1,650,000 sold in America and a further 2,120,000 in Europe that continues to be SEGA’s strongest region.
The company also noted Kingdom Conquest’s downloads had now reached 1.6 million and that their Ryu Ga Gotoku mobile title continues to be downloaded. In the other sectors of the group, SEGA noted on working on sales of their Anpanman and Jewelpad toys. Finally finishing off the segment, the group noted good sales of the latest Detective Conan film.
The group closed with saying net sales in the segment were down by 13.1% for the same period last year to ¥33,810,000,000 and an operating loss of ¥6,004,000,000. No doubt will the group be hoping that SEGA’s big Q3 and Q4 titles such as Sonic Generations, Mario & Sonic at the 2012 Olympic Games and Aliens: Colonial Marines help to push the division into profit again.
Amusement Game Sales
SEGA’s arcade division continued to remain strong despite recent years were the arcade division was becoming weak. The group pointed out that due to the increase demand once more in their amusement centre operations, sales of consumable cards increased. The group pointed out sales of SEGA Network Mahjong MJ5 remain solid (Pulling in revenues of ¥2.6 billion) and that their distribution of revenue scheme remained strong thanks to sales of AM2 arcade title Border Break (With revenues of ¥1.2 billion) As such, net sales for the segment were ¥20,591,000, down by a mere 1.9% for the same period last year and a decrease in operating income by 17% to ¥1,591,000,000
Amusement Centre Operations
Whilst SEGA’s consumer division has been performing poorly, the arcade segment continued great strides towards profitability as SEGA registered two successive periods of profit in their amusement centre operations. The closing of several arcades and cut costing has ensured this once most troubled segment has begun to perform once more for the group.
Whilst the group closed down 3 arcade centres, they also opened 3 in the same period, previous years would see more closing down than opening so hopefully this is an indication that the group will begin to expand operations once more. As such, net sales for this segment were at ¥23,247,000,000 (A decrease of 1.7% for the same period last year) and operating income shot up by a massive 54.2% to ¥1,684,000,000.
Pachislot and Pachinko Machines
Unsurprising to note, Sammy’s Pachislot and Pachinko machines remained to be the groups strongest division. The group noted however that due to the Earthquake to hit Japan earlier this year, replacement of older products have been hit hard. Despite this, the segment saw sales of Pachislot reach 52,769 and Pachinko sales at 181,589.
As it has been since the merger, net sales for this division was the strongest and amounting to ¥74,918,000,000 (Although this was a massive decrease of 44.2% for the same period last year) and operating income ¥20,631,000,000 (Which was down by 56.7% the prior year)
Closing
Overall the group was still largely in the black and with every division beating forecasts (With the exception of the consumer division) the company appeared in overall healthy state. Net sales overall was ¥74,918 million (a decrease of 44.2% for the same period last year) and operating income was ¥20,631 million (a decrease of 56.7% for the same period last year) Issues arising from payment on settlement of licenses and better news on the group having gained on some of their negative goodwill, allowed the group to post net income of ¥3,980,000,000 (A decrease of 83.7% the previous year)
I should note that despite the group posting lower revenues and profits from the previous year, the group actually revised its net income to ¥38,000,000,000, up a further ¥5,000,000,000 thanks in part due to the company’s belief that every division except their consumer division will post better than expected results. That wraps it up for another one of SEGAbit’s financial reports, I hope you enjoyed reading it. Incidentally, this happens to be my 100th article for SEGAbits, how time flies eh?
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Out of all the major Japanese publishers losses, SEGA has been effected least overall this year. It is pretty weird considering how so many random kids kept saying the company would die by now.
Good writeup.