Sega financials show digital and physical sales are on the up

Sega Sammy's financials for the three months ended June 30 are out, and it's been a solid first quarter for the Japanese giant. 

For the company as a whole, net sales were up by 33.4 percent year-over-year, rising to 70.6 billion yen ($698.8 million). Profits also increased, and stand at 4.1 billion yen ($40.6 million) for the quarter. 

Diving into the results for the company's entertainment division -- which is responsible for its video game business -- revenue from digital sales rose to 12 billion yen ($118.7 million) from 10.4 billion yen ($102.9 million), while physical releases raked in 10.7 billion yen ($105.9 million) -- a year-over-year rise of 39 percent.

Offering more insight, Sega pointed to "robust" sales of major mobile games including Puyopuyo Quest, Chain Chronicle, and Hortensia Saga as a driving force, and also highlighted the continued success of its Total War franchise, which has now sold over 20 million copies to date. 

The company is also pleased with the performance of its free-to-play MMO, Phantasy Star Online 2, which marked its Japanese PlayStation 4 debut by breaking the record for concurrent users by hosting 130,000 simultaneous players. 

Moving forward, Sega is expecting a slower spread of smartphones in Japan to drive up operating costs, as players begin to demand better quality mobile titles. 

The company also believes the physical game market will continue to expand "due to the penetration of next generation hardware."

With that in mind, Sega is forecasting net sales of 380 billion yen ($3.76 billion) and profits of 10 billion yen ($99 million) for the end of this fiscal year on March 31, 2017.