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Sega Sammy Consolidated Six-Month Report: April 1, 2009 – September 30, 2009

Key insights

6 takeaways

01
Sega Sammy reported a consolidated net loss of ¥6,323 million and a 23% year-on-year decline in net sales to ¥154,395 million for the six-month period ending September 30, 2009.See it on page 9
02
The Pachinko and Pachislot Machine Business was the only profitable segment, generating ¥10,897 million in operating income due to revised pricing and increased board sales.See it on page 6
03
The company recorded an operating loss of ¥318 million and an ordinary loss of ¥729 million, driven by sluggish consumer spending and a lack of major software releases in the first half of the fiscal year.See it on page 7
04
Management is attempting to stabilize revenue in the second half of the fiscal year by launching high-profile titles including Bayonetta and Mario and Sonic at the Olympic Winter Games.See it on page 2
05
Operational cost-cutting measures were implemented, including the closure of underperforming amusement centers and a reduction in research and development expenses.See it on page 2
06
The company’s financial performance was negatively impacted by significant headwinds across the Amusement Machine Sales, Amusement Center Operations, and Consumer Business segments.See it on page 2

Summary

The Sega Sammy Holdings consolidated report for the six-month period ending September 30, 2009, outlines the company’s financial performance and strategic adjustments amidst a challenging economic environment. The primary objective of the report is to detail the group’s fiscal results while highlighting operational shifts, such as the reduction of research and development expenses, the closure of underperforming amusement centers, and a strategic focus on launching major titles in the second half of the fiscal year to stabilize revenue.

Financial results for the period reflect a difficult market, with consolidated net sales totaling ¥154,395 million, representing a 23% year-on-year decline. The company recorded an operating loss of ¥318 million, an ordinary loss of ¥729 million, and a net loss of ¥6,323 million. Despite these losses, the Pachinko and Pachislot Machine Business segment demonstrated resilience, achieving a year-on-year increase in operating income to ¥10,897 million, driven by revised pricing strategies and an increased percentage of board sales. Conversely, the Amusement Machine Sales, Amusement Center Operations, and Consumer Business segments faced significant headwinds, including sluggish consumer spending and the absence of major title launches during the first half of the year.

The scope of the report covers the global operations of the Sega Sammy Group, with a particular focus on the Japanese domestic market for amusement and pachinko operations, and international markets for consumer software and toy sales. Management’s strategy for the remainder of the fiscal year emphasizes the release of high-profile titles, such as Mario and Sonic at the Olympic Winter Games and Bayonetta, alongside a continued commitment to cost-cutting measures and the cultivation of long-term corporate value through new partnerships and intellectual property development.