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Sega Sammy Reports Q2 Sales, Earnings Mostly Down

Posted On: 11/13/2012

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TAGS: Sega Sammy, Sega Amusements, Sega, fiscal report, Sega 2013 second quarter, domestic coin-op machine sales, Japanese arcade, video games, amusement machine division, StarHorse3 Season I, A New Legend Begins, World Club Champion Football Series, Maimai, amusement center, arcade game, coin-op videogame, coin machine

TOKYO -- In its fiscal report for the second quarter and half-year that ended on Sept. 30, 2012, Sega Sammy's domestic coin-op machine sales, Japanese arcade revenues and worldwide consumer videogame sales were all lower than the same period last year. The single bright spot: overseas sales of coin-op games were up.

Overall, the company generated revenues of ¥136.5 billion ($1.7 billion), down 10.6% year-over-year, and profits of ¥3.8 billion ($47.3 million), down 2.6% year-over-year.

Amusement machine net sales for the six-month period ended Sept. 30 were ¥18.7 billion ($235 million), a 3.1% drop from a year ago. Japanese domestic sales were ¥16 billion ($201 million), down 6.4%, while overseas sales jumped 23% to ¥2.7 billion ($34 million).

Also for the half-year, Sega's amusement machine division reported operating income of ¥0.8 billion ($10 million), about 50% lower than last year's figure. The half-year operating income margin was 4.3%, compared with 7.8% for six months the prior year. R&D expenses, mostly content development, were down about 14% compared with the first six months of fiscal 2012.

Top-selling amusement machines cited by Sega were all sold to the home market in Japan. They included StarHorse3 Season I -- A New Legend Begins (a medal game), World Club Champion Football Series (a trading card game) and Maimai (a videogame).

Amusement center operations net revenues for the six-month period were ¥21.7 billion ($273 million), down just 6.5% from the first half of fiscal 2012. Sega operated 238 domestic facilities in the first half, compared with 248 a year ago, and only three overseas, the same as a year ago. Four domestic facilities were closed in the first six months of fiscal 2013.

Pachislot and pachinko machine net sales dropped 27.4% for the first six months of fiscal 2013, coming in at ¥54.3 billion ($638 million).

Sega's consumer game sales division also lost money, but these losses were significantly lower than the prior year. Whereas the company was in the red for nearly $75 million last year, this year the consumer losses were only $9.7 million.

Sega Sammy attributes the decline to "turmoil in the global financial markets, mainly in Europe, and the economic slowdown of emerging nations."

Last summer, Sega closed offices in Europe and Australia while cutting staff in Europe and the U.S. Sega said it will focus on digital distribution and its core brands for the coming year. | SEE STORY