The Japanese firm has announced its financial results for the financial year ending March 31st 2007. Operating income has dropped to 76.53 billion Yen, compared to 119.15 billion yen on the previous year. Net income fell 34 per cent from 2006 primarily down to poor performance of the pachinko market. It stood at 43.5 billion Yen as of the end of the financial year.

A combination of worse than expected performance and new regulations have seen Sega Sammy cut its profit forecast for this financial year, resulting in shares dropping by 14 per cent. The drop was the biggest so far this year with shares falling to 2,495 Yen on the Tokyo Stock Exchange.

Net income has been predicted by Sega Sammy to fall 20 per cent to 35 billion Yen (£147m) in the financial year ending 2008. New regulations on how much players can win on pachinko slot-machines is the main reason for the forecast with 93 per cent of the company’s income coming from the gaming machines last financial year, according to Bloomberg.