Sega-Sammy has releasing its financial results for the first half of the fiscal year, showing an improved sales and profits compared to the same period last year. Sales are up by 9.9% for a total of ¥169,501 million, while their operating income is up by 167.5% for a total of ¥15,364 million. Individually, the three main business segments of the holding posted the following results. The Pachinko/Pachislot business posted an operating income of ¥10,639 million ($103 million), the Entertainment Content Business posted an operating income of ¥9,143 million ($88.6 million) and the Resort business posted a loss of ¥1,312 million ($12.71 million). We once again included a chart below to give you a quick overview of how these sales compare to those from the previous year.
Comparison between Q1 2016 and Q1 2017 results
The main difference compared to the previous fiscal year is the jump in profitability for the Entertainment Content Business, which has grown to rival the Pachinko/Pachislot Business. The resort business on the other hand continues to lose money for Sega-Sammy. This has no doubt influenced the recent decision by the company to sell their Joypolis theme parks. The report nonetheless states that facilities utilization at Tokyo Joypolis was “robust”, yet that doesn’t seem to have been enough to save the theme park from being sold.
Entertainment Content Business Overview
As usual, we take a closer look at the results of the Entertainment Content Business specifically, as it comprises just about everything related to Sega-Sammy’s video game output.
Phantasy Star Online 2 remains a strong title for the company, which recently topped the 4.5 million users mark in Japan. The same goes for Puyopuyo!! Quest (which received an update to allow for real-time competition among players in September), Chain Chronicle – Kizuna no Shintairiku and Hortensia Saga. SEGA also launched World Chain, another mobile RPG similar to Chain Chronicles.
On a related note, it’s curious to see just how many tower defense mobile RPG games SEGA has released on the market in recent years. The strategy appears to be to throw multiple titles on the market at same time, and quickly terminate those that don’t meet expectations. Recently The World End Eclipse fell victim to that strategy, as it ended service less than a year after its release. Meanwhile, Sega is already preparing to launch another ambitious mobile RPG in the form of Soul Reverse Zero.
When it comes to packaged game software, SEGA reports higher sales than in the same period in the previous fiscal year, amounting to a total of 4.65 million copies. The sales were boosted by a strong performance of Persona 5, which launched in September and shipped over 550.000 copies in Japan. Everything suggests that the game will also perform well in the Americas and Europe, when it’s released on February 14th, 2017.
In terms of amusement machines, KanColle Arcade continues to bring in money for SEGA. Sales for StarHorse3 Season Ⅴ: Exceed The Limit were also said to be “robust”. As for the animated film and toys business, there’s nothing new to report compared to our previous article on the financial results in Q1. The film Detective Conan: The Darkest Nightmare had a successful release, breaking the box office records for the franchise.
Looking forward
Sega-Sammy has revised its forecast for the entire fiscal year 2017, ending March 31, 2017. It now expects slightly lower sales (¥373,000 million compared to ¥380,000 million before). On the other hand, increased operating income is expected to be higher than their initial estimates. They’re now expecting an income of 28,000 million yen, compared to the 20,000 million yen it had estimated before. This is the result of an increased cost-efficiency in the Pachinko/Pachislot business, and a solid performance of the Entertainment Content Business. For the latter one, Sega-Sammy expects future growth mainly in Asia. It also expects to sell more packaged games as more people are buying the latest home video game consoles.
Overall, it seems things are still looking up for Sega-Sammy, despite the fact that they’ll be selling their Joypolis theme parks. Hopefully this trend will continue throughout the rest of the fiscal year.