Sega Sammy Holdings Full Year Results: Fiscal Year Ended March 2012

Sega Sammy Holdings reported a challenging fiscal year ending March 2012, characterized by a decline in net sales to 395.5 billion yen and a 47.5% drop in net income to 21.8 billion yen. The company faced significant headwinds, including the impact of flooding in Thailand and a weakening packaged video game market, which necessitated a downward revision of its initial forecasts. Despite these pressures, the company maintained a sound financial position with an equity ratio of 58.9% and successfully increased operating income within its Pachislot and Pachinko segment by 10.6% through strong title performance and cost-saving reuse initiatives.

To address structural weaknesses, the company initiated significant reforms within its Consumer Business, including the impairment of work-in-process assets and the streamlining of operations in Western markets. These efforts were accompanied by a strategic pivot toward digital and network-based gaming, exemplified by the planned launch of SEGA Networks, Ltd. and a focus on smartphone and social game titles. Additionally, the company expanded its corporate scope by acquiring Phoenix Resort and entering a joint venture for a casino-resort complex in South Korea, signaling a long-term commitment to diversifying into resort and entertainment operations.

Looking toward the fiscal year ending March 2013, the company projects a recovery with net sales expected to reach 470.0 billion yen and net income forecasted to rise to 40.0 billion yen. This outlook is supported by a shift in accounting policies regarding the depreciation of property, plant, and equipment, alongside a disciplined reduction in the number of packaged game titles. By prioritizing high-performing franchises and accelerating decision-making in the digital sector, the company aims to stabilize its consumer division while leveraging its established dominance in the Pachislot and Pachinko market to drive overall profitability.