Sega, Sammy To Merge; Sega Reduces Profit Outlook By 90%

Sammy's business is mostly in the arcade market (coin-op, prize redemption and ticket redemption machines), but it also has a development studio in Carlsbad, CA -- Sammy Studios. In a prepared statement from the two companies, they cited their business synergies: "By combining both companies' technological and developmental abilities, Sammy's high growth power and Sega's global brand power, we will be able...to address the needs of a large range of global customers spanning a wide age range." Sammy's president, Hajime Satomi, will reportedly lead the combined company, while Sega's president, Hideki Sato, will take on an as-yet-unspecified management role. In related news, Sega significantly reduced its 2003 profit forecast. Citing poor game sales in the United States, Sega cut its profit outlook for the year from 5 billion yen to 500 million yet -- a 90 percent drop.