Packaged sales continue to rise at Sega, but profits are in decline

Sega has just released its financials for the nine months ended December 31, 2019, and both sales and profit are down. 

According to the fiscal report, consolidated sales dropped by 4 percent year-on-year to 250.3 billion yen ($2.3 billion), while profits fell by 95 percent to 681 million yen ($5.6 million) over the same period. 

Digging into the company's Entertainment Contents division, which houses its video game business, sales rose by 5.2 percent to 166.2 billion yen ($1.5 billion), while operating income dropped by 38.6 percent to 10.6 billion yen ($96.5 million). 

That sales upswing was partly down to the performance of packaged software, with physical games sales rising to 18.5 million units from 14.3 million units during the same period last year. 

Sega claims new titles like Football Manager 2019 and Judgment drove that increase, with existing franchises like Total War, Sonic, and Yakuza also chipping in with catalog sales.

Digital software also witnessed a slight sales increase, with revenue from digital titles rising to 10.1 billion yen ($91.9 million) from 9.6 billion yen ($87.4 million), although Sega noted it actually incurred a loss in the field due to the cost associated with terminating existing titles.

As a result of that loss, Sega has downwardly revised its full-year fiscal forecast, and now expects to see sales hit 337 billion yen ($3.4 billion) -- down from 390 billion yen ($3.5 billion) -- and profits of -1.5 billion yen (-$13.7 million) -- down on 12 billion yen ($106.4 million) -- when the financial year ends on March 31, 2019.