FY Ending March 2018 2nd Quarter Results Presentation

Key insights

6 takeaways

01
Sega Sammy Holdings achieved year-on-year growth in sales and operating income for the second quarter of the fiscal year ending March 2018.See it on page 1
02
The Entertainment Contents segment drove performance through the success of titles including Persona 5, Sonic Mania, and the mobile game Magia Record.See it on page 34
03
Despite strong mid-year results, the company revised its full-year outlook downward due to lower-than-anticipated unit sales and a strategic shift in the Pachislot and Pachinko release schedule.See it on page 4
04
The Pachislot and Pachinko division is undergoing a transition period to align product development cycles with upcoming regulatory changes regarding machine standards.See it on page 28
05
The company maintains a stable financial foundation with an equity ratio of 64.6 percent.See it on page 49
06
Management is prioritizing a strategy of maximizing intellectual property value through multi-device development and digital expansion while preparing for future Integrated Resort opportunities in Japan.See it on page 30

Summary

Sega Sammy Holdings achieved significant year-on-year growth in sales and operating income during the second quarter of the fiscal year ending March 2018. This performance was underpinned by robust results in the Entertainment Contents segment, where high-quality titles such as Persona 5 and Sonic Mania, alongside the successful launch of Magia Record, drove momentum. The company’s strategic focus on maximizing intellectual property value through multi-device development and digital expansion proved effective, while the resort management division saw increased guest numbers at the Phoenix Seagaia Resort, further diversifying revenue streams.

Despite this strong mid-year showing, the company revised its full-year outlook downward. This adjustment stems primarily from a strategic shift in the release schedule for Pachislot and Pachinko machines and lower-than-anticipated unit sales within that segment. The Pachislot and Pachinko business is currently navigating a period of transition, as management prepares for impending regulatory changes that will alter machine standards and necessitate adjustments to future product development cycles. Consequently, the company is actively optimizing its sales schedules to align with these new industry requirements.

Financially, the organization maintains a stable foundation with an equity ratio of 64.6 percent. The broader scope of these results reflects a long-term trajectory of structural reform and operational scaling spanning from 2005 through late 2017. Moving forward, the company remains committed to balancing its digital and packaged game portfolios while simultaneously accumulating the operational expertise necessary to pursue future Integrated Resort opportunities within Japan. By prioritizing high-quality global content and adapting to regulatory shifts, the group aims to sustain its financial health amidst a changing market landscape.