Sega-Sammy Posts Loss for Q1 2016 Due to Lack of New Titles

Sega-Sammy has revealed its financial report for the first quarter of the financial year, detailing the performance of the Sega-Sammy Holding. While the group posted an operating income of ¥8,953 million ($72 million) in Q1 2015, they now posted an operating loss of ¥9,455 million ($76 million). Rather than bore you with all the numbers, I thought it’d be more interesting to make a few charts to show you how the results differ from the Q1 2015.

First, here’s a comparison between the net sales of all three segments mentioned earlier, in the first quarter of the fiscal year 2015, and the first quarter of the fiscal year 2016.

What stands out is of course a considerable drop in sales for the Pachinko/Pachislot business. In terms of sales, the results for the Entertainment and Resort business were more or less the same as the year before. Next, a similar chart, but now showing the actual net income.

As you can see, the big difference here between Q1 2015 and Q1 2016 is that the Pachinko/Pachislot side also posted a loss this time around. Evidently, with all the subsidiaries losing money, this explains why the group ended up posting an overall loss this time around, as the Pachinko/Pachislot business wasn’t there to make up for the losses incurred elsewhere.

Posting a loss is of course never a good thing, but the reason for it is obvious: they simply didn’t have a lot of new content to release in the first quarter. Something worth noting is that in terms of sales, the Entertainment business actually far exceeded the results of the Pachislot/Pachinko business this time around. Nevertheless, something that remains a problem for Sega-Sammy is the profitability of their gaming business (now reformed into “Sega Games”). The recent company restructure was no doubt done in order to resolve this situation and reduce costs.

For the Entertainment Contents business, the group did highlight the continued strong performance from titles such as Chain Chronicles, Puyopuyo!! Quest and Phantasy Star Online 2, alongside new releases such as Hortensia Saga and Monster Gear which are said to be “off to a flying start”. Sega-Sammy now expects to return to profitability for the second quarter, with several titles being released in the Pachinko and Pachislot business. On the mobile side, they’ll also be launching new mobile games “XUCCESS HEAVEN” and “CHAOS DRAGON.”

It’ll be interesting to see the result for the next quarter, as those will give us a better idea of whether or not the restructure proved worthwhile.