Today Sega released its financial results for the 9 months ended December 31, 2023, and at least some of them weren’t very good.
The company’s sales as a whole were 349,924 million yen (up 28.7% year-on-year). Operating profit was 54,445 million yen (up 42.4% year-on-year). However, such high overall figures were achieved thanks to the pachislot and pachinko machine business.
In terms of games, the entertainment content business posted 219,316 million yen in sales (up 4.2% year-on-year) and 19,736 million yen in operating profit (down 52.5% year-on-year).
While sales were boosted by the acquisition of Angry Birds developer Rovio, some of the new consumer games (console and PC) released in the third quarter (October to December 2023) were “underperforming,” leading to sluggish performance during the holiday season.
Re-sales of games released in previous fiscal years were stable, and Sega recorded losses related to inventory write-downs.
New game sales totaled 5.27 million units (up from 6.97 million in the same period in the previous fiscal year), while repeat sales totaled 13.83 million units (up from 13.77 million in the previous fiscal year) . In total, the company sold 19.1 million games, down from 20.75 million.
Largely due to the weak performance of some new games in the third quarter, Sega revised down its forecast for the full fiscal year.
The overall sales forecast is 463,000 million yen, down from 474,000 million yen. Operating profit is expected to be 51,000 million yen, down from 60,000 million yen.
Entertainment content division sales are expected to be 313,500 million yen, up from 327,000 million yen, and operating profit of 24,500 million yen, up from 36,500 million yen.
Games released in the third quarter included in the downward revision announcement include Sonic Superstars, Endless Dungeon and Total War: Pharaoh. Sega did not directly name the culprits, but it is known that the performance of Total War: Pharaoh disappointed the publisher.
We also learned that the company continues to consider structural reform of its gaming business in Europe, including a review of the medium-term lineup, optimization of fixed costs, improved investment efficiency, and a review of the structure and management of development and sales.
Part of this is the recently announced return of Jurgen Post as West Studios COO and regional managing director of Sega Europe.
2024-02-10 10:04:21
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