Sega Sammy Holdings Consolidated Financial Statements: 9 Months Ended December 31, 2012

Key insights

6 takeaways

01
Sega Sammy Holdings experienced a sharp financial decline for the nine months ending December 31, 2012, with net sales falling 33.6% to ¥207,004 million and operating income dropping 89.0% to ¥7,074 million.See it on page 8
02
The Pachislot and Pachinko machine division, the company's core revenue driver, saw a 58.2% sales decrease due to a stagnant market and the rescheduling of major title launches.See it on page 3
03
Net income for the nine-month period plummeted by 91.1% to ¥3,067 million, driven by challenging market conditions and structural adjustments within international consumer operations.See it on page 3
04
The Consumer Business segment faced a decline in packaged software volume due to structural reforms in the U.S. and European markets, though digital growth was bolstered by the launch of Phantasy Star Online 2.See it on page 4
05
Total assets decreased to ¥457,849 million as of December 31, 2012, down from ¥497,451 million at the end of the previous fiscal year.See it on page 1
06
The company implemented a change in accounting policy by switching from the declining-balance method to the straight-line method for depreciation, which had a material impact on reported income figures.See it on page 5

Summary

Sega Sammy Holdings’ consolidated financial results for the nine-month period ending December 31, 2012, reflect a significant downturn in performance compared to the same period in the previous fiscal year. The company reported net sales of ¥207,004 million, representing a 33.6% decline, while operating income plummeted by 89.0% to ¥7,074 million. Net income for the period fell by 91.1% to ¥3,067 million, impacted by challenging market conditions and structural adjustments within its international consumer business.

The decline was broad-based across all primary business segments. The Pachislot and Pachinko machine division, a core revenue driver, saw sales drop by 58.2% due to a stagnant market and the rescheduling of key title launches. The Amusement Machine Sales and Amusement Center Operations segments also experienced contractions, with sales falling by 8.9% and 5.6%, respectively. While the Consumer Business segment faced a decline in packaged software volume due to structural reforms in the U.S. and European markets, it showed growth in digital game software, particularly with the successful launch of the PC online title Phantasy Star Online 2.

The financial position as of December 31, 2012, shows total assets of ¥457,849 million, down from ¥497,451 million at the end of the previous fiscal year. During this period, the company implemented changes to its accounting policies, transitioning from the declining-balance method to the straight-line method for depreciating property, plant, and equipment, and revised the estimated useful life of these assets to better reflect economic reality. These adjustments had a material impact on reported income figures for the nine-month period. The company maintains a cautious outlook, noting that results are subject to global economic volatility and the ongoing transition toward digital and mobile gaming platforms.