Sega Sammy FY 2018 Results Presentation: Road to 2020

Key insights

6 takeaways

01
Sega Sammy missed its FY2018 financial targets, reporting 323.6 billion JPY in sales and 17.7 billion JPY in operating income against projections of 380 billion JPY and 20 billion JPY.See it on page 3
02
Regulatory shifts in the Pachislot and Pachinko sector and delays in digital game launches were the primary drivers for the company's financial underperformance.See it on page 3
03
The Entertainment Contents business achieved its third consecutive year of earnings growth, supported by strong global sales of Persona 5 (2.2 million units) and the Sonic and Total War franchises.See it on page 7
04
To improve operational efficiency and collaboration, the company is consolidating 20 group companies and 6,500 employees into a single headquarters in the Osaki area of Tokyo.See it on page 34
05
The company is diversifying its portfolio by opening the first phase of the Paradise City resort and acquiring gaming machine licenses in Nevada.See it on page 9
06
Future strategy focuses on adapting to new regulations through the launch of Type-6 Pachislot machines and ZEEG-made cabinets, alongside a digital pipeline featuring new Sonic, Ryu ga Gotoku, and Total War titles.See it on page 21

Summary

The fiscal year ending March 2018 served as a transitional period for Sega Sammy, characterized by a strategic focus on the Road to 2020 initiative despite missing initial financial targets. The company reported total sales of 323.6 billion JPY and operating income of 17.7 billion JPY, falling short of the 380 billion JPY and 20 billion JPY projections, respectively. These deficits were primarily driven by regulatory shifts impacting the Pachislot and Pachinko machine business, which necessitated significant revisions to sales schedules, and delays in the launch of new digital game titles.

Despite these setbacks, the Entertainment Contents business demonstrated resilience, achieving earnings growth for the third consecutive year. Strong performance in packaged games, such as Persona 5, which reached 2.2 million units sold globally, and the Sonic and Total War series, bolstered the segment. Simultaneously, the Resort business achieved key milestones, including the opening of the first phase of Paradise City and the acquisition of gaming machine licenses in Nevada, signaling a broader diversification strategy.

Looking toward 2019 and beyond, the company is prioritizing the launch of Type-6 Pachislot machines and ZEEG-made cabinets to adapt to new industry regulations. Digital expansion remains a core pillar, with a robust pipeline of titles including new entries in the Sonic, Ryu ga Gotoku, and Total War franchises. To support these long-term objectives, the organization is consolidating 20 group companies and approximately 6,500 employees into a unified headquarters in the Osaki area of Tokyo. This structural integration aims to enhance management efficiency, foster inter-departmental collaboration, and streamline operations as the company navigates the evolving landscape of the global gaming and resort industries.