Sega's healthy recovery down to digital game sales

Although Sega Sammy's last fiscal year was troublesome, the company continues to show great signs of recovery this year, thanks in part to demand for its digital games. Packaged games continued to show decline for Sega, with newly-released games like Football Manager 2014 and Sonic Lost World selling poorly at retail. The former sold 680,000 copies at retail, while the latter only managed 640,000 sales. However, the company's digital game sales on smartphones and PC were favorable and easily helped to balance out retail. Phantasy Star Online 2, Puyopuyo!! Quest and Chain Chronicle were all hits for Sega. Sega's Pachinko business also saw a notable increase in sales and profits thanks to strong performances from Pachislot Eureka Seven 2 and Pachislot Juoh, although its Amusement Machine business wasn't so hot, recording a swing to losses. For the nine months ending December 31, 2013, Sega's Consumer business, which houses its video game efforts, recorded revenues of 72.9 billion yen ($714.2 million), up 19.7 percent year-over-year, and operating income of 2.8 billion yen ($27.3 million), up 436.7 percent year-over-year. Overall, Sega reported revenues of 304.0 billion ($3.0 billion), up from 202.0 billion ($2.0 billion) year-over-year, and profits of 44.3 billion ($434.1 million), up compared to 3.1 billion ($30.1 million) year-over-year. Looking to the full fiscal year, Sega estimates that it will see revenues of 485 billion yen ($4.8 billion), up 51 percent year-over-year, and profits of 47 billion yen ($460.2 million), up 41 percent year-over-year.