Sega And Sammy Cement Partnership

Sega Sammy Holdings Inc. began its first day of trading on Friday, on the first section the Tokyo Stock Exchange. The new company’s consolidated annual sales now top more than ¥400 billion ($3.6bn), overtaking Konami as Japan’s largest independent publisher. The integration was announced in May after several months of negotiations. As part of the deal, one Sammy share was swapped for one share in the new company, while each Sega share was swapped for 0.28 shares in the new business. Sega Sammy Holdings expects its net profit for the current financial year, to March 2005, to be ¥47.5 billion ($427.5m) on sales of ¥520 billion ($4.7bn). Net profits for the subsequent year is predicted to be ¥51 billion ($459.0m) on sales of ¥540 billion ($4.9bn). For the year ending March 2007, net profit is forecast at ¥68 billion ($612.1m) on sales of ¥625 billion ($5.6bn). Company officials also announced plans to pay a year-end dividend of ¥40 for the current fiscal year. Shares in the new company ended at ¥5,390. Despite concern that many Sega staff would seek to leave the company, in the face of CEO Hajime Satomi’s confrontational management style – which seemed to disapprove of much of Sega’s more avant-garde work – no such exodus has occurred. Indeed, even Satomi himself has commented on his surprise that the two companies have integrated so easily. Even so, Sega remains very much the junior partner in the operation, with the vast majority of profits being generated by Sammy’s traditional gambling and pachinko operations.