Today Sega announced its financial results for the fiscal quarter ended on June 30th, 2017. As you can see in the table below, sales and income figures saw a strong improvement compared to the same period in 2016.
The press release included an overall analysis of the situation of the business, that reports on sluggish sales in the pachislot and pachinko industry, and a slowdown in the smartphone field in Japan.
On the other hand, the console market sees rising expectations due to the penetration of next (actually it should be “current,” Sega, we aren’t talking about PS5 here…) generation consoles, while large markets are developing for PC games in the west and in Asia.
“With regard to the pachislot and pachinko industry, in the pachislot machine market, sales of new standard machines have continued to be sluggish. Meanwhile, in the pachinko machine market, titles receiving high appraisal are arising mainly in some series with successful track records. In order to revitalize the market going ahead, it is essential to develop and supply machines that are capable of appealing to a wide range of players.
Regarding the environment of the Entertainment Contents Business, a slowdown in the spread of smartphones in Japan and the predominance of leading publishers are accelerating in the market for digital games for smart devices. Therefore, provision of higher-quality content is expected, resulting in a trend of longer development lead times and higher operating costs. 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 next generation hardware in addition to current generation hardware of home video game console. In Europe, the U.S., and Asia, large markets have been developed for PC games.”
We also get a specific breakdown for the Entertainment Content segment, which includes game. The publisher reports robust sales for Phantasy Star Online 2 (of course, not in the west, since Sega appears to have completely forgotten about its promise for a localization), and nearly doubled sales in the packaged game field, mostly thanks to “the strenght” of Persona 5 overseas, that shipped over 1.5 million units cumulatively.
“In the field of digital game software, sales remained robust for “PHANTASY STAR ONLINE 2,” which celebrated its fifth anniversary from its release. With regard to titles for smart devices, the Group conducted various events, updates and other measures mainly for existing major titles including “Hortensia SAGA” and “Puyopuyo!! Quest.”
In the packaged game software field, sales amounted to 4,560 thousand copies (2,410 thousand copies for the same period in the previous fiscal year) thanks to the strength of overseas evelopment for “Persona5,” a new installment of the ATLUS brand, and its cumulative worldwide shipments exceeded 1.5 million. In addition, the Group also launched PC game titles including “Endless Space 2” and “Warhammer 40,000: Dawn of War III.”
Net sales for the Entertainment Content segment alone grew 7.7% year-on-year, but operating income decreased 24.8% due to the “increasing of development expenses associated with the introduction of mainstay titles.”
Following comes the outlook for the segment, spelling out the titles coming out in the current quarter.
“With regard to the Entertainment Contents Business, EPISODE 5, a major update of “PHANTASY STAR ONLINE 2,” was launched in July, 2017. In addition, for existing major titles for smart devices, the Group plans for continued contribution to income through various events and updates.
In the packaged game software field, the Group plans to launch new PC game titles such as “Total War: WARHAMMER 2.” In the amusement machine field, the Group expects continued contribution to income from revenue share models, especially the popular title “KanColle Arcade,” and also promotes the sales of titles including CTV KIT “StarHorse 3 SeasonVI FULL THROTTLE.”
Speaking of Persona, just yesterday Atlus (which is wholly owned by Sega) announced Persona Q2 for Nintendo 3DS, and Persona 5 Dancing Star Night and Persona 3 Dancing Moon Night Announced for PS4 and PS Vita.
At the moment we have no information on when and if they’ll come west, but hopefully Sega learned the lesson with Persona 5.