Sega Sammy Holdings Summary of 3rd Quarter Results for FY Ending March 2014

Sega Sammy Holdings experienced significant financial growth during the first three quarters of the fiscal year ending March 2014, driven primarily by strong performances in the pachislot and pachinko machine sector and the digital games division. Consolidated net sales reached 303.9 billion yen, marking a 47% year-on-year increase, while operating income surged by 564% to 46.5 billion yen. Quarterly net income saw a substantial rise of 1,377% to 44.3 billion yen, bolstered by an extraordinary gain from the sale of investment securities, which offset losses related to the liquidation of a Chinese joint venture.

The pachislot and pachinko segment served as the primary engine for this growth, with net sales climbing 116% to 160.2 billion yen. Success was largely attributed to high-performing pachislot titles, though the company noted a challenging market environment for non-mainstay pachinko machines. Conversely, the amusement machine sales and amusement center operations segments faced headwinds, recording losses due to reduced capital investment by facility operators and stagnant same-store sales.

Within the consumer business, the digital games division emerged as a key profit driver, particularly through the robust performance of Phantasy Star Online 2 and the expansion of the SEGA Networks portfolio. While packaged games experienced sluggish sales, the company’s toy and animation businesses maintained solid results. Despite these gains, management remains cautious regarding full-year forecasts, citing the need for strategic releases in the fourth quarter and ongoing market volatility. The company maintains a strong financial position with an equity ratio of 61.5% and total assets of 575.5 billion yen, supported by strategic investments such as land acquisition in South Korea and continued investment in research and development.