Sega Sammy Holdings Consolidated Financial Statements: 3 Months Ended June 30, 2006

Sega Sammy Holdings reported its consolidated financial results for the first quarter of the fiscal year ending March 31, 2007, covering the period from April 1, 2006, to June 30, 2006. The company experienced a significant decline in profitability compared to the same period in the previous year, with net sales falling 14.8% to ¥85,620 million and operating income dropping 84.1% to ¥2,796 million. Net income for the quarter stood at ¥779 million, a 92.7% decrease from the prior year’s first quarter.

Performance across business segments was mixed. The pachislot and pachinko machine business, a major revenue driver, saw reduced sales volume, though specific titles like "Ore No Sora" and "CR Freddy vs. Jason" provided steady contributions. The amusement machine sales division benefited from the popularity of titles such as "Star Horse2 NEW GENERATION" and "Sangokushi Taisen 2." Meanwhile, the amusement center operations segment maintained a "scrap and build" strategy, ending the quarter with 460 centers. The consumer business recorded 2,140 thousand units in software sales globally, driven by "Noryoku Trainer Portable 2" and the "Sonic" series, though the segment ultimately posted an operating loss due to high upfront development costs.

The company applied a simplified accounting method for income tax computations and adjusted its scope of consolidation to include seven new companies. Despite the quarterly downturn, management maintained its previously announced interim and full-year forecasts, citing strong initial order demand for upcoming pachislot releases. Total assets were reported at ¥475,192 million, reflecting a decrease in accounts receivable compared to the end of the previous fiscal year.