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Sega Sammy Fiscal 2017 Business Report

Key insights

6 takeaways

01
Sega Sammy achieved consolidated net sales of ¥366.9 billion in fiscal 2017, representing a 5.4% year-on-year increase, while operating income grew 67.6% to ¥29.5 billion.See it on page 6
02
The Entertainment Contents segment generated ¥205.7 billion in sales, significantly aided by the global success of Persona 5, which exceeded 1.5 million units sold.See it on page 2
03
The Pachislot and Pachinko Machine business contributed ¥148.2 billion in sales, supported by the performance of titles like Pachislot Hokuto No Ken Syura no kuni hen.See it on page 3
04
The company is targeting a 15% operating margin and a 5% return on assets (ROA) by fiscal 2020 as part of its long-term strategic growth initiative.See it on page 6
05
Sega Sammy expanded into the integrated resort sector with the April 2017 opening of Paradise City in South Korea, despite the division reporting an operating loss of ¥2.2 billion in fiscal 2017.See it on page 10
06
Management anticipates a decline in operating income for fiscal 2018 due to conservative projections for the pachislot and pachinko sector and increased capital allocation toward growth investments.See it on page 7

Summary

The Sega Sammy Holdings fiscal 2017 business report outlines the company’s financial performance for the period ending March 31, 2017, and details its strategic "Road to 2020" initiative. The primary objective is to demonstrate the effectiveness of structural reforms implemented since 2015 while establishing a foundation for long-term growth through investments in digital gaming and integrated resort (IR) operations. The company aims to achieve a 15% operating margin and a 5% return on assets (ROA) by the 2020 fiscal year.

Financial results for fiscal 2017 showed positive momentum, with consolidated net sales reaching ¥366.9 billion, a 5.4% increase year-on-year, and operating income rising 67.6% to ¥29.5 billion. The Entertainment Contents segment, bolstered by the successful launch of Persona 5—which surpassed 1.5 million units worldwide—contributed ¥205.7 billion in sales. The Pachislot and Pachinko Machine business also saw growth, with sales of ¥148.2 billion, driven by popular titles such as Pachislot Hokuto No Ken Syura no kuni hen. Conversely, the Resort business reported an operating loss of ¥2.2 billion.

The company’s strategy focuses on optimizing management resources and diversifying its entertainment portfolio. Key developments include the April 2017 opening of South Korea’s first integrated resort, Paradise City, and a continued commitment to digital transformation within its gaming division. While the company anticipates a decline in operating income for fiscal 2018 due to conservative projections in the pachislot and pachinko sector and increased investment in growth areas, it maintains a policy of stable dividend payments. The report emphasizes a "Mission Pyramid" framework designed to align employee mindsets with the goal of becoming a leading comprehensive entertainment group.