Sega Sammy Raises Forecast On Pachinko, But Consumer Games Still Weak

Sega Sammy, the holding company for game publisher Sega, raised profit and sales forecasts for the fiscal year ending March 2011 -- but it wasn't due to strong sales of consumer video game software. The Tokyo-based company on Thursday raised forecasts thanks to strengthening pachinko and pachislot machine sales and improved cost reduction in the segment. For the current fiscal year, Sega Sammy said that it expects to sell 300,000 pachislot machines, up from the previous forecast of 210,000. Pachinko forecasts were down to 360,000 from the previously-announced 410,000. But across both pachislot and pachinko categories, Sega expects to sell a total of 660,000 machines, up from the previous 620,000 unit forecast. As a result, Sega Sammy raised fiscal year sales forecasts to 410 billion yen ($4.9 billion), up from 400 billion yen ($4.7 billion). Profit guidance for the year is now 36.5 billion yen ($437 million), up from 22 billion yen ($264 million). Pachinko -- the parlor game that inspired PopCap's Peggle -- resembles an upright pinball machine with no flippers and involves players launching balls that bounce and hit pegs, with balls eventually landing in pockets on the playing field. Pachislot is more akin to a Vegas slot machine. The amusement machine business is helping Sega Sammy offset continuing softness in its home video game software business. The company stated, "While the consumer business saw mainly sales of new titles in overseas markets hover at weak volumes, the amusement machine sales business and amusement center operations business are expected to maintain robust operating results." For the company's most recent fiscal first quarter ended in June, the company blamed "generally weak" U.S. and European video game markets caused by "sluggish personal consumption."