SEGA Sammy posted their Q1 report for 2016, a period that saw no major releases from either SEGA nor Sammy. This is also the first period in which SEGA Corporation no longer exists, instead the new entity, Sega Games Co. LTD has taken on the mantle. Hit the link after the break to find out how the company did this past quarter.

This is a strange fiscal report to discuss, SEGA didn’t lose money because a game failed, because the market rejected one of Sammy’s product, no the only reason for a loss was because neither side of the company had any major products released for the market. SEGA had no major games released this quarter and Sammy had no new Pachislot machines out yet so it makes it hard to report the results for this quarter, there is almost no news to report other than they had no major product to sell!

ENTERTAINMENT CONTENTS (SEGA)

SEGA’s packaged games sales actually saw an increase, going from 1,700,000 units sold to 1,830,000. Unfortunately for us, it seems the blue sky publisher is now withholding where which product sold and which format was the most successful for them, we do know however that the segment sold an operating loss of 200 million yen, which was down from last year’s 400 million yen loss. With what seems to be all their major titles (Sonic, Warhammer etc) seemingly hitting next fiscal year and Persona 5 and Football Manager are set to be the biggest retail title this year, SEGA Sammy is only expecting to shift 7,140,000 pieces of software for the reminder of this year.

SEGA’s mobile division on the other hand was driving up significant growth for the business. Back in February 2015, the group posted how well they were doing in mobile with Chain Chronicle and Puyo Quest generating over 500 million yen a month, they’re are now joined in the previous quarter with Hortensia Saga, Monster Gear and a fifth game (Which I presume to be Sonic Dash.) it’s an impressive result and shows just how lucrative the mobile market is and how quickly SEGA has managed to capture it. It’s interesting to note that both Puyo Quest and Chain Chronicle have managed to remain a big hit for SEGA since last year, but what is good for the company is they are having no problem releasing other mobile titles that can enjoy similar success.

Other news revealed that the company has had it’s mobile games downloaded over 228 million times globally (With 68 million coming from Japan.) and expects to have over 400% growth in the Asian market and 200% in the European and America. Strangely enough, I think the Asian growth is a bit more realistic than the Western growth target, since adding 3 more big hits to their lineup and investing in Taiwanese company Auer Entertainment to help penetrate the various Asian markets. With the West I’m not quite sure where the growth will be coming from other than Sonic Runners. The company plans to release a total of 20 mobile titles this fiscal year, far lower than last year and infact and lower figure than the number of retail titles to be released this year (34.)

With that all said and done, the digital games division saw an operating income of 200 million yen and saw the overall division, Entertainment Contents (The new name for the old Consumer Division) posted an operating loss of 700 million yen, another decrease from the 1.3 billion yen operating loss they posted last year.

PACHISLOT & PACHINKO SALES (SAMMY)

Finally moving onto the other non-news story is the Sammy section of the company, I was being deadly serious when I said there is almost nothing to report. What was always the biggest breadmaker in the company saw a sharp drop in both sales (From 47.2 billion yen to 7.6 billion yen) and operating income (12.5 billion yen to a loss of 6.7 billion yen.) What was the cause of such a drastic decline? Well it wasn’t due to a collapsing pachislot and pachinko market, infact the reason for such a drastic collapse on earnings was because Sammy had no pachislot machines to sell. The group only sold 102 pachislots compared to last year of having sold 82,000 units whilst pachinko sales were also in decline due the group only having 1 title available, as opposed to 3 from last year. For the full year, the group is expecting the segment to bounce back, with operating profits of 23 billion yen.

CONCLUSION

In the end, the group saw a loss of 9.4 billion yen but the reason was simple, there was almost next to nothing of note released in this quarter, the fact SEGA Sammy was surprised they somehow managed to sell more video games this quarter says it all really. The group has opted not to adjust their financial outlook for the rest of the year, with net sales amounting to 420 billion yen and net income of 19 billion yen.

I must admit this is perhaps the most boring report I’ve had to write, nothing of note happened, no gloom or depression to report, not fantastic achievement (Albeit, there was with mobile) of a game going against the odd and beating targets. No it seems all the exciting stuff is being saved for next fiscal year, it very much seems that this year the group will be going through the motions, gearing up for the completion of their resort complex, major video game releases and of course, breaking into the box office with the Sonic movie. Until next time folks!

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