Today Sega announced its financial results for the first quarter of the fiscal year 2019, related to the period between April 1st, and June 30th.
The consolidated results below show that all the relevant numbers are in the black, but Sega reported a considerable slowdown on pretty much every front.
The accompanying press release included comments on the performance of the Entertainment Content business, which includes games.
“Regarding the environment of the Entertainment Contents Business, in the field of digital game software, as the predominance of leading publishers in Japan is accelerating, the competitive environment is further intensifying, with titles that capitalize on powerful IPs (Intellectual Properties), on top of being high-quality products, becoming hits.
Meanwhile, in overseas business, future growth is expected mainly in Asia. With regard to the packaged game software market, expectations are rising for future expansion of the market due to the penetration of hardware of home video game console, while game distribution platforms such as Steam are expanding in the PC games market. ”
“In the field of digital game software, the Group launched the new titles including “kotodaman,” which has exceeded 7 million downloads in the first two months of its release, and the soccer club management simulation game “SEGA Pocket Club Manager”. However, existing titles are declining in popularity and development expenses associated with the launch of new titles occurred.
In the packaged game software field, sales of titles that capitalized on existing IPs were made, including “PERSONA 5: DANCING IN STARLIGHT” and “PERSONA 3: DANCING IN MOON NIGHT” rhythm video games from the “PERSONA” series, and “Yakuza 6: The Song of Life”. Also, the Group continued to conduct sales from previously launched titles (catalog titles), which contributed to profit expansion. As a result, sales amounted to 5,700 thousand copies (4,560 thousand copies for the same period in the previous fiscal year).”
We also get an overview of the outlook for the Entertainment Content business. The publisher expresses the intention to capitalize on existing, revival, external, and new IPs.
“With regard to the Entertainment Contents Business, the Group will continue to advance the launch of new titles in the field of digital game software. In addition, the Group will advance efforts to capitalize on existing, revival, external and new IPs in each business field.”
Incidentally, Yakuza 6: The Song of Life was mentioned in the pipeline for PS4 and PC, but this is quite possibly a mistake because it was listed as an April 2018 release for both platforms, and a PC version definitely did not come. Normally, a PC release on a different date would be listed separately.
Below you can check out the results of the Entertainment Contents business more in detail, with the mention that the top-3 digital games were Phantasy Star Online 2 (which continues to be successful despite the lack of a western release, apparently), Sega Pocket Club Manager, and PuyoPuyo!! Quest.
The company also has three unannounced digital games in the pipeline for this quarter, but those are likely to be mobile titles.
If you want to compare, you can check out the results of the previous quarter in our dedicated article from May.