Losses Mounting, Sega Restructures

Citing the cost of promoting its products overseas, Sega of Japan on Friday announced big losses for the first half of its business year. Despite increasing sales by 25 percent and reaching the 1 million mark for American Dreamcast sales, losses reached $182 million dollars. The company recorded a profit of $11.5 million in the same period last year. Sega also announced a major restructuring that will focus the company more on internet gaming. "We are a believer in the Internet, so we will focus on entertainment on networks," said Sega president Shoichiro Irimajiri, "We are now aiming to provide our services on the Net ... we aim to become a network entertainment kingdom." Sega plans to list its internet related business in Japan and the United States at the beginning its next fiscal year, starting in April of 2000. Sega will also split its research and development, home games, and arcade games units into separate companies as it looks for ways to better focus on internet development. Included in the planned listings will be ISOA Corporation, the joint venture company created to handle Dreamcast online services. Sega will also set up more than 10 new spin offs from its development business. Sega of America's Peter Moore welcomed the announcement, "[Shoichiro Irimajiri's] statements reinforce Sega's commitment to delivering dynamic content to consumers through Dreamcast, and more importantly expanding upon the systems forward-thinking gaming and network functionality."