Home News SEGA Sammy Posts $18.5 Million Loss, Restructuring to Focus on Online Games
SEGA Sammy

SEGA Sammy Posts $18.5 Million Loss, Restructuring to Focus on Online Games

Donnie
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Sega Sammy Holdings, parent company of SEGA, posted its financial results for the six months that ended on September 30 of this year, according to DualShockers. The results are quite telling. The company has reported an $18,500,000 loss.

This has also resulted in a revision in the forecast for the full fiscal year downwards:

That is not all, however. The company is well aware of this and has an idea of just what the problem is: packaged games.

In the home video game software industry, demand expanded in the market for digital games geared toward social networking services (SNS) and smartphones, while the market for packaged games softened.

In the consumer business, the Group launched titles such as “Persona 4 The ULTIMAX ULTRA SUPLEX HOLD” in the packaged game software field. Total volume of packaged software sales were 4,100 thousand copies, which includes 1,420 thousand copies in the U.S., 1,960 thousand copies in Europe, and 710 thousand copies in Japan and exceeded results for the same period in the previous fiscal year.

On the other hand, in the field of digital game software for mobile phones, smartphones, and PC downloading, performance remained solid for the online RPG “PHANTASY STAR ONLINE 2” as well as titles such as, “Puyopuyo!! Quest” and “CHAIN CHRONICLE – Kizuna no Shintairiku.” Meanwhile, on the pachinko and pachislot game website for mobile phones and PCs, the smart phone version of “777TOWN for Android,” “777TOWN for iOS” and service for DeNA Co., Ltd.’s “Moba7” were enhanced.

Also, the number of titles distributed domestically in the field of digital game software as of September 30, 2014 was 139 (including 74 Pay-to-play types and 65 Free-to-play types).
In the toy sales division, the Group implemented the sale of such as “Anpanman Series” and “Jewelpad.” In the animated films division, distribution revenue from theater film “Detective Conan: Dimensional Sniper” and license revenue and revenue from merchandise sales from the TV series “Yowamushi Pedal” were favorable.

As a result, net sales in this segment were ¥48,631 million (an increase of 10.3% for the same period in the previous fiscal year) while operating income was ¥939 million (a decrease of 16.0% for the same period in the previous fiscal year) because of an increase in advertising expenses.

What does this all mean? It seems the company is planning to do another restructure in response to the loss. By April 2015, its entertainment content division will be focused primarily on the online gaming business and three of the group’s companies will be reorganized into three business groups:

1. Pachislot and pachinko machines business centering on Sammy Corporation.
2. Entertainment contents business with SEGA CORPORATION’s network game business at its core.
3. Resort business engaged in the development of hotels, golf courses, facility business and other businesses.

Each business group will accelerate the decision-making process, streamline overlapping functions, build a system that will allow the appropriate injection of management resources, and enhance management efficiency by adapting to the changes in the business environment.

What does this mean for the future then? It doesn’t sound like there will be any layoffs. Games will continue to come out like always. However the odds are much higher that digital games from SEGA will overshadow retail games from here on out, if they haven’t already. Consumers may very well have to decide whether to follow suit in this change of not. Stay tuned.

This post was originally written by the author for TSSZ News.

Tags SEGASEGA SammyTSSZ News
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Donnie

Donnie

A chao that wears a news reporter hat, Donnie has been a part of LMC since 2012, LMC's main news writer Donnie is also a part of the Uncutting Crew commentary series.

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25 Comments

  1. I don’t care for mobile crap, but I’d be all for Sega bringing more titles to Steam. Hopefully they’ll do that.

  3. Refocussing on digital distribution? Good thing they didn’t just spend $20 million on a whole sub-franchise centred on two packaged games.

    Oh, wait…

        1. Actually that’s the redesign I like the most! She’s cute indeed and much less annoying (personality and voice wise).

    2. $20 million on a whole sub-franchise with 2 packaged games, toyline, and TV Show that they haven’t even bothered to market in the slightest.

      I don’t even like Boom, and even I’m just baffled at Sega’s marketing department. You’d think Sonic would be the one thing they’d even bother to market… guess not.

    3. $20 million (I am pretty sure they spent close to $30 million though) is honestly spare change in terms of what you need to develop and market two games, not to mention a toy line and a TV show. This limited budget probably explains why we have barely seen any advertising for Boom

  5. sorry Sega, sonic boom is not the cure of saving the whole company but it can relieve some pain but its too late in the game…maybe SONY SONIC movie will buy this dieing company if the movie could bring in $500 million………..or does not by 2017 !!! SEGA go bankrupt and the end of sonic franchise

  6. Well I guess its time for the peoples of at least on the western hemisphere to start chanting to internet providers & cellular services to get their damn act together and get their networks upgraded to higher speeds. HOPE VERIZON IS LISTENING when it comes to FIOS! :\ and even smaller cable companies…start getting better broadband service. As for the big broadband cable providers stop with the insane rate hiking too! As for the cellular networks…lift the caps already you expensive tightwads! No wonder people are jumping ship on contracts lol.

  7. I never liked Boom either. But that doesn’t mean I want it to fail. If crappy marketing like this keeps on continuing, than Boom is doomed.

  10. I have not heard of a single Sega game out in the second quarter (either they did not have anything or it is due to bad marketing). Alien Isolation came out on October 7th (technically Q3) and Boom is coming in Q3 as well. Every other packaged title was probably only released in Japan (and I suspect much of that came from Atlus). Overall, I am concerned but not surprised based on their output of packaged titles.

  11. Three thoughts of advice:

    -More games for Steam.
    -Overall more westernized titles.
    -Sonic Multi-platform.

  12. EVERY FUCKING YEAR THEY DO THIS “Hurr we lost money because we didn’t do shit except market to the niche audience within barely a month of the game’s release but if it’s Aliens and Sonic we SHOVE THAT SHIT DOWN YOUR THROAT” and if it’s not “Damn we gotta focus on mobile” then it’s now “we gotta focus on digital”.

    THESE ASSHOLES ARE IN CHARGE OF ATLUS.

    HOW CAN THEY KEEP GETTING THIS BULLSHIT WRONG AFTER ALL THESE YEARS?!

    Y’know, it makes sense when a stupid company like Capcom doesn’t do well because they told MegaMan to piss off and people who are casual fans of Street Fighter don’t appreciate the rereleases and them making that “It has to sell 2 million to warrant a sequel” in light of DarkStalkers not coming back.

    But when it’s a company like SEGA who has N O P R O B L E M whoring its past out to us multiple times, you would think maybe they would have gotten smarter.

    Yet somehow playing the super safe game of “release all our shit that people haven’t played in arcades in forever or way too often but in another format” isn’t working.

    It baffles me how they get away with such stupidity and EVEN THOUGH I am rooting for Boom, that’s another entirely different creature in itself. How much did it cost to budget the show? The Wii U and 3DS game? How about the merchandise?

    Seriously. I’m starting to think Sonic is holding SEGA back. He’s simultaneously the one thing they rely on but also the one thing people are sick to death of despite their constant retries.

    1. Sonic is holding SEGA back

      Or is it the other way around? After all, Sega’s tried nothing ambitious with the guy since Unleashed. And Boom doesn’t count; Big Red Button are the main driving force there, not Sega.

      1. Boom can’t “not count” it was still paid for by Sega. I would argue that Colors was fairly ambitious though, all new power-based gameplay is at least a little ambitious.

        1. Sega may be paying for Boom, but it’s BRB that are coming up with the ideas, and that’s why I’m not counting it. And while I like the Wisps in Colors, I don’t see that as ambitious at all; they’re just the Sonic equivalent of the Fire Flower, Tanooki Suit, et al.

        2. I don’t know, it feels like splitting hairs to me. And while sure, the concept of limited powers isn’t new to games, it is fairly new to Sonic (in it’s execution, shields obviously predate it). I don’t know, I guess I’m splitting hairs now too, lol.

  13. Also inb4 fucking SegaZone comes here to pretend he knows what’s going on and claim the article is wrong or “doesn’t know what’s coming :^) “

    1. DON’T MENTION THAT NAME!
      *commence purity chant*

      🙂

      Anyway, I think he’s been permanently banned form commenting.

      1. It was another guy I think. If they’re banned you shouldn’t be able to post their name. Like that “fox” guy who had the tirade against Disney.

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