Sega-Sammy Holdings Inc. has announced that it will be adjusting the profit forecast for this fiscal year, ending March 2016. While the company expected a 19,000 million yen profit (~154 million USD), it now expects to earn only 2,000 million yen (~16 million USD). Sega-Sammy Holding’s CEO Hajime Satomi recently apologized to shareholders and investors for the Group’s failure to meet their targets for the third consecutive year.
Sega-Sammy’s primary source of income remains the Pachislot and Pachinko Machines Business, but it hasn’t been performing quite as well as it did before. However, it’s the Entertainment Contents business that really underperformed for Sega-Sammy. In their official statement, the company points out three main reasons for these disappointing results. One is the delay of key titles (such as Persona 5). Secondly, some newly released titles did not meet expectations (though they didn’t state which ones). Lastly, there’s the increasing competition in the mobile games market. Mobile games were typically cheap and fast to produce relative to their console counterparts, but this situation is rapidly changing. Sega-Sammy points out that people expect higher-quality content now, and this leads to longer development times.
To reverse the situation, Sega-Sammy points out their recent efforts in their structural reform to improve profitability, and they will be discussing further initiatives internally that target all of their businesses. They plan to present the entire overview when they announce their full year results for the fiscal year ending March 2016 (scheduled in May 2016).