Sega just announced its financial results for the nine months ended on December 31st, 2015. The numbers are in the black, and operating income increased by 11.7% year-on-year, while sales dropped by 8.5%.
We also get the forecast for the full fiscal year, ending on March 31st, 2016, with operating income predicted to be significantly lower compared to the fiscal year ended on March 31st, 2015.
A detailed analysis of the performance of the Entertainment Content business gives more color on what happened with the arm of the company working on games, with digital game sales defined “robust,” and lower packaged game sales:
“With regard to the Entertainment Contents Business, in the field of digital game software, updates, etc. were implemented for existing titles for smart devices, such as “PHANTASY STAR ONLINE 2” launched over three years ago, “CHAIN CHRONICLE – Kizuna no Shintairiku” and “Puyopuyo!! Quest,” and sales remained robust.
Sales of “Hortensia SAGA” launched in the current fiscal year are also robust. However, with regard to the expansion in South Korea of “Football Manager Online,” a new online game for the Asian market, and certain titles for smart devices, advertising expenses etc. increased due to a review of the value of assets relating to titles that were less well-received than expected in the initial plan, as well as extensive updates of various titles. The number of titles distributed domestically in the field of digital game software (free-to-play types) was 50 as of the end of December 2015.
In the packaged game software field, sales amounted to 6,120 thousand copies, which was lower than the level in the same period of the previous fiscal year, despite the launch of “Football Manager 2016,” the latest addition to the “Football Manager” series, which has continued to attract diehard fans for over 10 years, mainly in Europe.”
Last, but not least, we hear about the reasons behind the full year forecast:
“During the first three quarters of the fiscal year ending March 31, 2016, operating income and profit exceeded the forecast of consolidated operating results for the full year of the fiscal year ending March 31, 2016 as announced on December 4, 2015 as a result of factors such as cost improvement effects centering on the reuse of components mainly in the Pachislot and Pachinko Machines Business.
With regard to the Pachislot and Pachinko Machines Business in the fourth quarter, the Company is promoting sales of titles such as “Pachislot Nisemonogatari” and “Pachinko CR Shin Hokuto Muso,” a major title in the current period, and receiving orders steadily overall. In the Pachislot and Pachinko Machines Business in the fourth quarter, however, it is necessary to discern the order trend of the titles stated above as well as sales schedule and sales trend of other titles.
Regarding the digital game software field of the Entertainment Contents Business, the Company is consecutively implementing large-scale updates centered on major existing titles, including “PHANTASY STAR ONLINE 2” and “CHAIN CHRONICLE,” as well as planning the launch of a number of new titles mainly for the Asian market, and needs to monitor the progress of such initiatives. As a result of the above, no change has been made to the forecast of consolidated operating results for the full year of the fiscal year ending March 31, 2016 as announced on December 4, 2015.”
We also get a detailed breakdown of sales and income by segment, showing a year-on-year 5% drop of sales for digital games, and a more significant 17% slowdown for packaged games.