Sega Sammy Holdings: Actual Results for the Third Quarter of the Year Ending March 2014

Sega Sammy Holdings’ third-quarter results for the fiscal year ending March 2014 reflect a period of significant growth driven by the Pachislot and Pachinko Machines Business, alongside strong performance in the digital consumer sector. The primary thesis of the report is that the company achieved increased sales and income through the successful shipment of mainstay titles in its core gambling machine segment and the continued expansion of its digital games portfolio.

Key financial drivers included a surge in revenue from the Pachislot and Pachinko division, which benefited from concentrated product shipments during the third quarter. In the Consumer Business, the digital games segment demonstrated robust growth, with the PC title Phantasy Star Online 2 maintaining strong engagement and smartphone titles such as Chain Chronicle and Puyopuyo!! Quest achieving significant download milestones. Conversely, the Amusement Machine Sales and Amusement Center Operations segments faced headwinds, reporting sluggish sales and operating losses attributed to a lack of market-driving titles and reduced capital investment by facility operators.

The company’s financial position was further influenced by strategic corporate actions, including the sale of Sanrio Co., Ltd. shares to enhance management flexibility and the liquidation of a joint venture in China. Capital expenditures rose notably due to land acquisition in South Korea, while R&D and advertising expenses increased to support new product development and marketing for key machine launches. Despite these results, management maintained its full-year forecast, citing the need to monitor fourth-quarter market trends and the timing of upcoming product releases. The company remains focused on navigating a challenging amusement market while leveraging the growth potential of its digital and mobile gaming divisions.