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Sega Sammy reports sharp income decline despite soaring game sales

Bullet Club

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Sega Sammy reports sharp income decline despite soaring game sales​

The Japanese firm sold 34.2 million games in the nine months ended in December, 77% more than the year before

Sega Sammy published its financial result for the nine months ended December 2020, reporting a 51.8% decline in operating income to ¥13.5 billion ($128 million), compared to ¥28 billion ($266 million) for the same period the previous year.

Sales also decreased 25.2% year-on-year, generating a total of ¥210 billion ($1.9 billion).

Looking at games specifically though, Sega reported strong performances with 34.2 million copies shifted, compared to 19.3 million for the same period the previous year. This was mostly driven by sales from its back catalogue, which represented 30.4 million copies. This growth is directly related to people staying at home due to COVID-19 measures, the company reported.

Games generated ¥102.4 billion ($974 million) in sales during the period, compared to ¥90.2 billion ($858 million) the year before.

Full games represented 42.6% of the total sales, 13.8% of which were new physical titles, 28.8% repeat sales of physical games, and 62.8% digital sales. Free-to-play transactions also represented 41% of overall sales.

Games actually represented the vast majority of the company's revenue for its Entertainment Content segment, which was overall down 10% to ¥167.6 billion ($1.6 billion), as the segment also includes amusement centers which were closed for several months last year due to COVID-19.

Operating income for the segment reached ¥29.9 billion ($284 million), a 75.8% increase compared to the same period the year before.

Sega Sammy revised its forecast for the full year, with results expected to be decreasing 7% year-on-year for a total of ¥276 billion ($2.6 billion) in sales. Operating income has been revised upward, with a 10.5% rise expected, reaching ¥9 billion ($85 million).

Sega Sammy recently announced a new structure, splitting apart its video games and amusement divisions. Haruki Satomi was appointed as the new group CEO of Sega Sammy Holdings.

Source: Games Industry
 

jhjfss

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You know what to do Phil
 
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Oct 2, 2019
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Why the fuck are these doom and gloom threads about SEGA are made at least once a week when they've just been bought by GENDA like a month and half ago?
 

kuncol02

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Why the fuck are these doom and gloom threads about SEGA are made at least once a week when they've just been bought by GENDA like a month and half ago?
How many times that need to be explained? Genda bought only Sega part operating arcade locations. They still have resorts and pachinkos which are basically not functioning for whole year.
 
Oct 2, 2019
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How many times that need to be explained? Genda bought only Sega part operating arcade locations. They still have resorts and pachinkos which are basically not functioning for whole year.
They bought over 80% of their stock how is that just the arcade part of their business?
 

kuncol02

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Leyasu

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Why do people want Microsoft or anyone to acquire Sega?

Yeah, I grew up in the 80s and have fond memories of a company that was part of my young life and they had some great games and stuff. But I have been struggling to be excited for anything from them for the last 20yrs. I am missing something? Are there any franchises that I should be checking out?
 

Fat Frog

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Isn't Sammy generating income mostly from pachinko machines in saloons? Since those were closed, income obviously tanked hard.
Like the game centers, maybe they'll try to sell the pachinkos to Konami or another company.
 

Fat Frog

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Seems to me that it’s not the actual gaming division doing bad. It’s everything else.
What is surprising is that they sold 3,7 millions of Sonic games without a single new episode (probably a mix of Generations, Mania, TSR, Transformed, Forces)

They really don't need to rush the next episode. Just release enhanced collections of Generations/Colors/Unleashed/Transformed everywhere (with less bugs, Solid 60FPS, extra levels) and they could sell 10 millions more games in 2021-2022 especially with the upcoming movies and netflix TVs...
 
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Derktron

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Why do people want Microsoft or anyone to acquire Sega?

Yeah, I grew up in the 80s and have fond memories of a company that was part of my young life and they had some great games and stuff. But I have been struggling to be excited for anything from them for the last 20yrs. I am missing something? Are there any franchises that I should be checking out?
Because they have other IP's other than Sonic. How hard is that to understand?
 
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ChuckeRearmed

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It seems eventually Sega will remain as a game publisher only - other businesses will be slowly sold out.
 

Mister Wolf

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Any day now Phil. We need that Phantasy Star RPG that the cowards at Sega were too scared to bankroll. Better be turn based too.
 

Mmnow

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Seems to me that it’s not the actual gaming division doing bad. It’s everything else.
That's what makes this interesting to me.

Do they sell off their gaming division in the hopes that that money sees them through to the end of Covid and a return to normality?

Or do they double down on video games and hope something major doesn't happen, like sales dropping or Sonic 2 bombing? Or Covid coming back with a vengeance and wiping 2022 out as well.

It's a crucial time for Sega, and it's no surprise they're restructuring.
 
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Woopah

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Very interested what Sega Japan is working on. We know of some of Sega's European studios are working on and what Atlus are working on, but not Sega's Japanese studios.
 

kuncol02

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Thanks Captain Obvious. Can you suggest ant of these I.Ps that I should check out
Football Manager, Total War, Persona, Company of Heroes, Yakuza and dozens of older ones ready to resurect like Panzer Dragon, Crazy Taxi, Jet Set Radio, Phantasy Star, House of Dead...
Even only their back catalogue has gigantic value.
Sega owns Creative Assembly and Relic Entertainment and I could bet that MS really would like to own them (especially Relic which is curently working on Age of Empires for MS).
 

Leyasu

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Football Manager, Total War, Persona, Company of Heroes, Yakuza and dozens of older ones ready to resurect like Panzer Dragon, Crazy Taxi, Jet Set Radio, Phantasy Star, House of Dead...
Even only their back catalogue has gigantic value.
Sega owns Creative Assembly and Relic Entertainment and I could bet that MS really would like to own them (especially Relic which is curently working on Age of Empires for MS).
A lot more than I thought. I admit that the last sega game that I played was outrun 2 on the og Xbox
 

Fat Frog

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Very interested what Sega Japan is working on. We know of some of Sega's European studios are working on and what Atlus are working on, but not Sega's Japanese studios.
PSO 2 Remake, PSO 3 (called PSO2 New Genesis)
Sonic 2021
SMT V
A new Yakuza
Persona 6
A new Monkey Ball (the official voice admitted it)
Virtua Fighter X
Nights Dream Wheel
A game co developed with Atlus (Re Fantasy ?)

With the game centers business being mostly sold, i suspect will see more AM1 and AM2 games on console which is exciting.

Sega will also triple down on japanese ports on PC, next gen, Switch and Streaming. (Just give a look at upcoming games on Xbox/PC: Yakuza 3, Yakuza 4, Yakuza 5, Yakuza 6 in March, Judgment in April,(Stadia then PC for sure), Persona 5 strikers on PC Switch, SMT 3 Remaster on PS4 Switch...

Honestly, it's also time to port all Yakuza games on switch (the disaster of Yakuza 1 and 2 on wii u isn't proving anything, they look like crap).
Yakuza Zero/Kiwami would be a good test and downgraded versions of Kiwami 2, 6, Judgment, LAD wouldn't be that problematic.(maybe a cloud version of the Dragon Engine like PSO 2 ?) There are Doom Eternal and Alien Isolation versions on Switch after all. Ok Doom is blurry but well optimized Isolation is dope on the console.

(It's not port begging, i don't own Switch)
 
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Woopah

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PSO 2 Remake, PSO 3 (called PSO2 New Genesis)
Sonic 2021
SMT V
A new Yakuza
Persona 6
A new Monkey Ball (the official voice admitted it)
Virtua Fighter X
Nights Dream Wheel
A game co developed with Atlus (Re Fantasy ?)

With the game centers business being mostly sold, i suspect will see more AM1 and AM2 games on console which is exciting.

Sega will also triple down on japanese ports on PC, next gen, Switch and Streaming. (Just give a look at upcoming games on Xbox/PC: Yakuza 3, Yakuza 4, Yakuza 5, Yakuza 6 in March, Judgment in April,(Stadia then PC for sure), Persona 5 strikers on PC Switch, SMT 3 Remaster on PS4 Switch...
Thanks! Very comprehensive. From my understanding most of those which are already announced are the Atlus titles, with the Sega Japan ones just being rumoured so far (although I admit I had forgotten about Virtua Figher X).

I'm guessing we are going to see more Switch-focused projects from Atlus as well (we're overdue an Etrian Odyssey title on the platform).
 
Dec 25, 2018
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Maybe this is why SEGA of America is taking over the reigns of how Sonic should be, since Sonic Team clearly can't make profits with Sonic any longer.

COVID has clearly affected their finances, as their Resorts and Arcade Buildings are closed for most of the year, and their Video Game side isn't as strong as it once was.

However, if you are a shareholder (I should really get on buying the Shares of SEGA) then it's good to buy dips as Sammy seem to weather these losses pretty well overall, although it heavily depends on how they improve their Profit margins in the next 2 to 10 years with their Pachinko Business slowly dying and their additional costs of Resorts which are still new.
 

Fat Frog

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Thanks! Very comprehensive. From my understanding most of those which are already announced are the Atlus titles, with the Sega Japan ones just being rumoured so far (although I admit I had forgotten about Virtua Figher X).

I'm guessing we are going to see more Switch-focused projects from Atlus as well (we're overdue an Etrian Odyssey title on the platform).
Sega struggling in arcade, pachinko, mobile (Sakura Revolution) could be a blessing for console players... Back to the basics which are consoles (I also forgot there was other Sakura Wars trademarks after Revolution, maybe console games)
 
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Dec 25, 2018
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Sega struggling in arcade, pachinko, mobile (Sakura Revolution) could be a blessing for console players... Back to the basics which are consoles (I also forgot there was other Sakura Wars trademarks after Revolution, maybe console games)
Sakura Revolution and Valkyria Revolution are massive flops. Maybe it's the branding of "Revolution" that is killing those sales. :LOL:
 

night13x

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GUYSSS I heard a super duper duper super secret leak that nobody knows about...Microsoft will buy Sega on Wednesday!!!
 

Woopah

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Sega struggling in arcade, pachinko, mobile (Sakura Revolution) could be a blessing for console players... Back to the basics which are consoles (I also forgot there was other Sakura Wars trademarks after Revolution, maybe console games)
I sure hope you're right!
Sakura Revolution and Valkyria Revolution are massive flops. Maybe it's the branding of "Revolution" that is killing those sales. :LOL:
I think you're into something here. Sega need to follow their more successful naming conventions and have Valkyria Royale and Mario & Sakura at the Olympic Games.
 
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