SEGA's Pachinko Problems Lead To Profits Plummet

Sonic's parent company sees cash falling out of its pinball-a-likes

Posted by Staff
SEGA's Pachinko Problems Lead To Profits Plummet
SEGA- SAMMY, the parent company of real games creator, SEGA, has seen net sales for the consolidated fiscal year drop by 4.5% year on year to 528,238 million, and operating income was 76,530 million, down 35.8%.

Of course, this wasn't the fault of the company's video game division, according to the company, "Net sales in this segment (Pachislot and Pachinko Machines) totaled (sic) 213,710 million, down 19.9% year on year, and operating income was 71,102 million, dropping 28.8%."

Here, in fact is what SEGA-SAMMY says about its games wing,"In the home videogame software and toys industry, videogames for various new portable game consoles targeting wider age segments and new users proved extremely popular. This was particularly noteworthy amid challenging market conditions marked by industry realignment triggered by the integration and merger of major companies. The emergence of a series of new game platforms since last year is giving rise to growing expectations of higher demand for software sales, but more advanced requirements in hardware specifications are expected to increase R&D-related cost outlays. This is expected to further highlight differences between software developers in terms of product development capabilities and financial resources."

So, while the Pachislot and Pachinko (think pinball) business looks to be dragging the chain, the company is bullish about its real creativity, saying in its Consolidated Financial Statement for the year ending March 31 2007, "In the Japanese consumer market demand from new, casual participants attracted by the Nintendo DS and Wii is expected to continue. Additionally, with the addition of various new platforms from several makers we expect healthy demand not only in Japan, but in the North American and European markets as well."

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