FY Ending March 2014: Interim Results Presentation

Sega Sammy Holdings demonstrated financial resilience during the interim period ending September 2013, characterized by year-on-year growth in net sales and operating income. This performance was underpinned by a robust equity ratio of 64.3 percent and a strategic pivot toward digital expansion. The acquisition of Index Corporation served as a critical milestone, intended to bolster digital and amusement operations while integrating new capabilities into the group’s existing portfolio. Despite maintaining full-year forecasts, the company navigated a complex landscape, shifting major pachinko title releases to the second half of the fiscal year to optimize market impact.

The digital games segment emerged as a primary engine for recovery, with titles such as Phantasy Star Online 2 and Chain Chronicle driving significant revenue. While the consumer and digital sectors showed promising growth trajectories, the amusement center business faced persistent headwinds regarding same-store sales. Simultaneously, the pachislot and pachinko division remained a cornerstone of the company’s financial structure, though it required careful management of mainstay titles to ensure consistent earnings. These mixed results across segments underscore the necessity of the company’s ongoing transition toward revenue-sharing models and digital engagement.

Looking toward long-term stability, the organization is targeting an operating income of 100 billion yen through a dual strategy of stabilizing traditional gaming machine revenue and aggressively scaling digital operations. Diversification efforts have expanded beyond traditional entertainment, with significant capital investment directed toward international resort and casino development, particularly in South Korea. By establishing a dedicated casino machine manufacturing division, the company is positioning itself to capture emerging global market opportunities. This comprehensive approach reflects a broader effort to balance the cyclical nature of the pachinko industry with the high-growth potential of digital gaming and international integrated resort operations.