Sega Restructure Report Claims Less than $900K in Company “Capital”

We do not profess to hold finance or business degrees, but we have found a frightening number in Sega Sammy’s restructuring announcement today that felt worthy of its own discussion when explained in context.

According to the report, the Sega corporation division of the company has just ¥100 million in “capital” as of December 31st. That sounds like a lot of money, but converted to US dollars, it is less than $900,000 in cash invested. In fact, the number is more like $848K and change. And that’s as of December. We are a month past that latest reported figure.

What is capital? In essence, it’s the cash a company has on hand to buy the things necessary in order to make its product. It is invested money, and Sega is running out of it, fast. It does not necessarily mean cash flow is interrupted–remember this is just a division, not the whole company–nor does it mean bankruptcy is imminent. But it does not appear investors want to give the Sega division more money, either. Should that money run out, it could curb Sega’s effort to reach its goal of expanding more into digital, and force even more painful cutbacks.

Our team of reporters will continue to bring you every angle and evolving development on this major story.