Sega Sammy Holdings: Actual Results for the First Quarter of the Year Ending March 2017

Key insights

7 takeaways

01
Sega Sammy Holdings achieved a financial turnaround in Q1 of the fiscal year ending March 2017, moving from a loss in the previous year to profitability.See it on page 1
02
The Pachislot and Pachinko Machines Business served as the primary growth driver, fueled by the release of titles including Pachislot CODE GEASS Lelouch of the Rebellion R2 and CR BIG DREAM.See it on page 1
03
The Entertainment Contents Business delivered strong results across digital, packaged, and amusement segments, led by the performance of Phantasy Star Online 2 and Total War: Warhammer.See it on page 1
04
The Resort Business reported increased losses due to operational disruptions at the Phoenix Seagaia Resort following the 2016 Kumamoto Earthquake.See it on page 1
05
The company is maintaining its long-term growth strategy for the Integrated Resort sector, highlighted by ongoing capital investment in the PARADISE CITY project in South Korea.See it on page 2
06
Upcoming revenue growth is expected from a strong product pipeline, including the release of Persona 5 and new entries in the Hokuto No Ken series.See it on page 2
07
The company is expanding its technological footprint by integrating virtual reality software and attractions into its amusement facilities while working to remove non-compliant pachinko machines by the end of 2016.See it on page 2

Summary

Sega Sammy Holdings achieved a significant financial turnaround during the first quarter of the fiscal year ending March 2017, transitioning to profitability compared to the same period in the previous year. This growth was primarily driven by the Pachislot and Pachinko Machines Business, which benefited from the release of new titles such as Pachislot CODE GEASS Lelouch of the Rebellion R2 and CR BIG DREAM. Simultaneously, the Entertainment Contents Business saw robust performance across digital, packaged, and amusement segments, bolstered by the success of Phantasy Star Online 2 and Total War: Warhammer.

While the company experienced a strong start, the Resort Business faced increased losses during this period, largely attributed to temporary disruptions at the Phoenix Seagaia Resort following the 2016 Kumamoto Earthquake. Despite this, the company continues to prioritize the Integrated Resort sector as a key growth area, evidenced by ongoing investments in the PARADISE CITY project in South Korea.

Looking toward the second quarter and beyond, the company maintains a positive outlook supported by a pipeline of major titles, including Persona 5 and new entries in the Hokuto No Ken series. Management is currently assessing the impact of these upcoming releases and potential asset transfers before finalizing any revisions to the annual operating forecast. Furthermore, the company is actively expanding its footprint in emerging technologies, specifically through the integration of virtual reality software and attractions at its amusement facilities. Operational compliance remains a focus, with the company committed to the industry-wide removal of non-compliant pachinko machines by the end of 2016.