Sega Sammy's Full Year Profits Down Significantly

Officials from Sega Sammy Holdings have announced the merged company’s financial details for the twelve month period ended March 31st. During this time, profits were seen to drop by 34 percent, largely as a result of a fall in demand for Sammy’s coin-operated pachinko games. Full year net sales put at ¥528.23 billion ($4.39bn), down 4.5 percent on the previous year. Operating income was down 35.8 percent to ¥76.53 billion ($635.8m) and net income down 34.4 percent to ¥43.46 billion ($361.1m). Although fourth quarter results were not given, based on the previous nine month results can be calculated to give sales of $123.94 billion ($1.03bn) and a net loss of ¥5.92 billion ($49.2m). The company had previously forecast profits of ¥60 billion ($498.6m), and blamed the disappointing results on sales of pachinko machines, which fell by 20 percent over the year and are not expected to recover in the short term. Net sales for the company’s other arcade machines, which primarily includes Sega’s arcade business, saw net sales rise by 3 percent to ¥79.62 billion ($661.4m), although operating income fell by 4.1 percent to ¥11.68 billion ($97.0m). In the home market, net sales increased by 32.1 percent to ¥119.83 billion ($1.0bn), although again operating income dropped by 11.5 percent to ¥1.75 billion ($14.5m). Software sales, primarily published using the Sega brand name, saw 21.2 million copies sold – an increase on the previous year of 4.8 million. This was broken down to 5.8 million copies in Japan, 8.2 million in the U.S., 7.1 million in Europe and 60,000 in other regions. The strongest selling titles in Japan were Oshare Majo Love and Berry DS Collection with more than 1 million units sold and Ryu Ga Gotoku 2 (aka Yakuza 2) on PlayStation 2 with sales of over 0.6 million. The bestselling titles in the West were named as Sonic the Hedgehog for Xbox 360 and PlayStation 3 and Football Manager 2007 (aka Worldwide Soccer Manager 2007) for PC. For the next financial year, the company is predicting net sales to rise by 26.8 percent to ¥670 billion ($5.56bn), while net income is predicted to fall by as much as 19.5 percent to ¥35 billion ($290.7m).