Sega, a well-known video game publisher, recently released its financial results for the three months ended June 30, 2024. While the overall net sales showed a decline, the video games business performed exceptionally well during this period. The Entertainment Contents division, which includes video games, toys, and animation, saw a significant increase in sales, with full game sales up nearly 40% compared to the same period last year.
The numbers speak for themselves – net sales for Sega amounted to ¥104.7 billion ($710.5 million), a 3.2% decrease year-on-year. However, the Entertainment Contents division saw a substantial increase in net sales, reaching ¥72.7 billion ($493.3 million), marking a 34% rise from the previous year.
One of the highlights of Sega’s financial report was the strong performance of its video games business. Despite an overall decline in net sales and profits for Sega Sammy, the company attributed this to the comparison with the launch of Smart Pachislot Hokuto No Ken in the same period last year. The pachislot and pachinko division experienced a 43% decrease in net sales, amounting to ¥28.8 billion ($195.8 million).
On the other hand, the Entertainment Contents division saw both sales and profits increase year-on-year, exceeding expectations. This success was credited to strong sales of DLC for games and a positive impact from foreign exchange. Full game sales were slightly below expectations, with 5.9 million games sold during the period. Notable contributors to this figure included new releases and key sellers like Shin Megami Tensei V Vengeance.
New game sales generated ¥3.9 billion ($26.5 million), while back catalogue games brought in ¥11.2 billion ($76 million). Sega also reported favorable performances from titles like Unicorn Overlord and the Persona 5 Royal remaster. The increase in video game profits was also attributed to the acquisition of Rovio, the developer behind Angry Birds, in a deal worth €706 million.
Looking ahead, Sega expects a strong performance from the Entertainment Contents division for the rest of the fiscal year. Upcoming releases such as Sonic X Shadow Generations, Sonic Rumble, and Metaphor: ReFantazio, along with the third Sonic The Hedgehog movie, are anticipated to drive further growth.
Additionally, Sega Sammy’s medium-term management plan, which includes the creation of a Gaming Business to handle casino and iGaming products, is progressing well. The company has already made two acquisitions towards this goal, acquiring US firm GAN Limited and Netherlands-based Stakelogic, both of which specialize in B2B platforms for casino operators and iGaming content development, respectively.
In conclusion, Sega’s financial results for the three months ended June 30, 2024, showcase a mixed performance but highlight the strength of its video games business. With promising upcoming releases and strategic acquisitions in the pipeline, Sega is poised for continued success in the gaming industry.