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Sega’s revenue down despite strong games performance

The financial results season continues, with Sega Sammy being the latest company to release its statements for the nine month period ended December 31st.

Sales at Sega Sammy were down 8.7 per cent year-on-year with revenue reaching ¥260.8bn (£1.7bn). Income dropped quite drastically from ¥35bn (£0.2bn) last year to ¥25.6bn (£0.16bn) in 2017 – a 62.3 per cent decrease year-on-year.

Despite results being down, Sega Sammy’s entertainment contents business (which includes both digital and physical games, as well as amusement centers, animated films and toys) had a healthy nine month period compared to 2016. Sales in this sector increased 1.6 per cent year-on-year to reach ¥157.9bn (£1.03bn), while income saw a 12.3 per cent growth, hitting ¥17.2bn (£0.11bn).

Digital game sales were driven by updates for titles such as Phantasy Star Online 2, Hortensia Saga Puyopuyo Quest, as well as new releases like Magia Record : Puella Magi Madoka Magica Side Story. Boxed sales were up 75 per cent year-on-year, from 8,13m to 14.28m units, thanks to strong performances from Sonic Forces, Ryū ga Gotoku: Kiwami 2 and Football Manager 2018.

Sega’s report was optimistic regarding physical sales going forward: “With regard to the packaged game software market, expectations are rising for future expansion of the market due to the penetration of hardware of home video game console.” Titles such as Hokuto ga Gotoku and Valkyria Chronicles 4 (both launching in March in Japan) are expected to drive sales in the coming months, the report added.

“Sluggish” sales of new machines in the pachislot market were named as a reason for the company’s disappointing overall results, while mobile games also failed to drive revenue, the report added: “Regarding the environment of the Entertainment Contents Business, a slowdown in the spread of smartphones in Japan and the predominance of leading publishers are accelerating in the market for digital games for smart devices. Therefore, provision of higher-quality content is expected, resulting in a trend of longer development lead times and higher operating costs.”

About Marie Dealessandri

Marie Dealessandri is MCV’s senior staff writer, having joined the publication during its days as a weekly magazine. After testing the waters of the film industry in France and being a radio host and reporter in Canada, she settled for the games industry in London in 2015. She can be found (very) occasionally tweeting @mariedeal, usually on a loop about Baldur’s Gate, Hollow Knight and the Dead Cells soundtrack.

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