Sega Sammy Holdings Appendix of Consolidated Financial Statements: 9 Months Ended December 31, 2015

Sega Sammy Holdings’ consolidated financial results for the nine-month period ending December 31, 2015, reflect a period of operational adjustment and revised performance expectations. The primary objective of the disclosure is to provide a detailed breakdown of financial performance across the company’s core segments—Pachislot and Pachinko machines, Entertainment Contents, and Resort operations—while highlighting shifts in accounting policies and updated full-year forecasts.

Financial performance for the nine-month period shows net sales of 245 billion JPY, representing an 8% year-over-year decline. Operating income reached 12.1 billion JPY, a 12% increase compared to the same period in the previous fiscal year. However, the company significantly lowered its full-year operating income forecast from 25 billion JPY to 10 billion JPY, citing challenges in the Pachislot and Pachinko segment, where unit sales for Pachinko machines dropped by 49% through the third quarter. Conversely, the Entertainment Contents segment showed resilience, with operating income rising 20% to 2.4 billion JPY, supported by growth in amusement center operations and animation/toy divisions.

The scope of the report covers the company’s global operations, with a specific focus on the Japanese domestic market for gaming machines and a growing emphasis on international digital game distribution. Methodology for the report relies on consolidated financial accounting, with a notable change in the basis for recording net sales from shipment to delivery starting in the 2016 fiscal year. Key performance indicators for digital games, such as Monthly Active Users (MAU) and average revenue per user (ARPMAU), are tracked alongside marketing tools like Noah Pass to gauge engagement. Despite the downward revision in full-year profit expectations, the company maintains its dividend per share at 40 JPY for the full fiscal year.