Sega doubles profits despite lower game sales

Vanquish sells 820,000 and Sonic Colors moves 1.85 million as publisher poised to post back-to-back full years in the black.

In 2010, Sega Sammy posted an annual net profit for the first time in four years. The company is in good shape to string two such campaigns together, as today the publisher reported rosy results for the nine-month period ended December 31, 2010.

Sonic Colors raced to sales of 1.85 million copies worldwide.

Through the first three quarters of its fiscal year, Sega Sammy posted sales of ¥310.1 billion ($3.77 billion), up nearly 9 percent year-over-year. While the publisher's revenues were up modestly, its profits were through the roof, as net income more than doubled to ¥36.82 billion ($448 million).

While the pachinko purveyor's overall sales were up, the publisher's video-game-specific segment posted more mixed results. Revenues in the consumer business division--which includes Sega as well as toy lines like Bakugan and Zoobles--were down more than 19 percent to ¥66.9 billion ($814 million). Despite that slip, operating profits for the division still doubled to reach ¥2.8 billion ($34 million).

"In the home video game software industry, the demand was generally weak in the U.S. and European markets due to the headwind like sluggish personal consumption," the company told investors. "The group needs to adapt to changing business environment in which the market demand for new content geared to social networking services [and] smartphone is expanding."

To address that, the company said it is establishing "a full-scale development program" specifically for work on platforms like Facebook and mobile phones.

In releasing its numbers, Sega also posted sales data for a trio of its major titles. Sonic Colors was the publisher's best-selling new release, notching 1.85 million copies sold on the Wii and DS. The Platinum Games shooter Vanquish was next up, managing 820,000 sales between the Xbox 360 and PlayStation 3 editions. The simulation Football Manager 2011 fared nearly as well, with 690,000 copies sold on the PC and PSP in Europe and the US alone.

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66 comments
ChiefFreeman
ChiefFreeman

820,000 for a game without a lot of promotion is a very good number. Good on Vanquish and Platinum games.

EdwardoMario16
EdwardoMario16

Yes. Brilliant Idea. Sega should stop making Sonic games when Colors is one of years' biggest hits and should likely see steady sales as the year goes on. I think it could've sold a lot better, but it sold well enough considering how badly burned the public has been on the Sonic franchise. What Sega should do is stop making BAD Sonic games.

alef321
alef321

@bigcrusha YOU'RE NOT ALONE BUDDY- I really enjoyed Sonic adventure's story from the second and first one too... i bet sonic the hedgehog 06 was planned as adventure 3 but they had to rush and launch the game unfinished in so many ways- -Super Sonic -Speed chip -Day/Night system -Metal Sonic -Secret final level -Amigos having their own trial/mission sections staying from the main story -Super Hard Mode -Amigos playable in 2 player -Amigos playable in regular levels -Amigos having their own theme songs -Town as main hub for levels and missions -Online(I think) -Tails was supposed to have more gadgets -Sonic's infinite gauge(save for the Elise missions) don't belive? try finishing a level with one of the amigos(its not that hard cuz the game is very glitchy), they will do their own animation AND voice depending on the grade just like sonic/shadow/silver... i bet sonic 06 was planned as the best sonic ever ... I BET THEY WERE THINKIN JUST LIKE SQUARE-ENIX but Sega never gave them thoso precious 3-6 years in devloping games.... ooh well ...

TheSnakeBelmont
TheSnakeBelmont

this generation sega has released the most interestin japanesse games..even more than capcom & konami combine(two of the strongest 4 me last gen) . Vanquish, bayonetta, resonance of fate, valkyria crhonicles, phantasy star portable, yakuza 3, mad world.... and now that I look at the list. arguably even better jrpgs than square-enix. good job sega.

Cloud737
Cloud737

The article never says why the profits doubled despite game sales going downstream. I take it it's because of those pachinkos?

wahyudil
wahyudil

[This message was deleted at the request of the original poster]

bigcrusha
bigcrusha

): am I the only dude in the world that actually liked the story focused Sonic adventure titles?

DCUltrapro
DCUltrapro

the colours figures are across Wii and DS, not Wii on its own. the wii version has sold just under 700k, which is a shame, had it been released multiplatform it would have been a big win, especially considering its the best Sonic game in a decade hands down

wahyudil
wahyudil

1,85 million sonic colors for wii, I never realized that there are so many wii hard core gamers ...

Black_Adder_
Black_Adder_

VANQUISH is nice. It's funny I haven't played it much and game is put in my shelf, but it's put in the "to be continued" spot and lots of hours will be spent on this one:)

d12malu
d12malu

I remember when Sega decided to go as a third-party developer a decade ago, they said they will be a force to reckon with. Still waiting...

strayfies
strayfies

These comments are just flooding with awful advice. "Can I give Sega some free advice to start making more money. Stop making Sonic games." after the article specified that Sonic Colors was their top selling game for the year, and "Profits shouldn't be the major goal of every game company," doesn't make any sense at all. Few companies incorporate to lose money or make none at all. I can't even imagine the stockholders' meetings in which they don't focus on profits.

shnapoodle
shnapoodle

Sega just lost their footing and it seems that they think the issue is due to lack of money/sales. Honestly if they would take a step back for a moment, they'd see that they have lack of sales because they became so interested in getting the next game out there, that they forgot to realize that games need editing and take time to release. (which can be said about Sonic mostly.) And the other games they take time on aren't as famous as Sonic so they can't afford to not be taking the time do so much as edit if they want to make some kind of profit out of game making. It's a bad situation they put themselves in... :(

Barighm
Barighm

Yay for Vanquish getting good sales despite the weak marketing campaign. That game deserves its success.

redness19
redness19

Can I give Sega some free advice to start making more money. Stop making Sonic games.

Vozlov
Vozlov

"the demand was generally weak in the U.S. and European markets due to the headwind like sluggish personal consumption" but mostly because people hate our games. "The group needs to adapt to changing business environment " like making good games.

campbell153
campbell153

I think Sega should try and make it back in the production of consoles... i was a huge fan of the MegaDrive (Genesis)... i know they flopped on the release of the Dreamcast but they have the knowledge to do something great.. i think

franzito
franzito

Sega golden years are over.But there's always hope. Profits shouldn't be the major goal of every game company, although it's a complex matter.

OJ_the_LION
OJ_the_LION

I'm a Sega fanboy from back in the day, so i'm glad to see them doing well. That said, I'm still peeved that they are focusing more towards the (approaching oversaturated) mobile and facebook market in the future, that they neutered the export of Yakuza 3, and that they screwed up a great new IP in Valkyria Chronicles by releasing the sequels as PSP exclusives. For every great decision they make, there's three that make me scratch my head.

Taegre
Taegre

I think there should be a sociological study to find out just what in human nature causes people to buy, and then complain about, Sega's less-than-stellar games, and then barely acknowledge the existence of their great games.

LindBergh2007
LindBergh2007

I'm going to try to post one of the links to the SEGA Imagination Tech GPU deal now. Please bear with me since I'm using mobile: http://www.xboxic.com/news/6241 the soure on the link is russian so use google translator.

KabutoHunter
KabutoHunter

It's nice to see a good developer rewarded for good work. Sega has been making a serious turnaround in quality, and if these figures are any indication, they should be encouraged to keep on this path.

LindBergh2007
LindBergh2007

@Kellog. Yes I do. I can post the link on Monday since I don't have access to a normal internet connection I can also post links from euro game sites talking about ImageTech signing an exclusive deal with SEGA to design a GPU chip. GS mobile sucks!!! SEGA is releasing less boxed software because its hurting thier operating income. Publishing more titles that cost less to develop helps increase thier profit and revenue and lowers thier operating income. They will only publish mobile and social networking software next year. I've been talking to a former SEGA Skunkworks enigineer. From what he's told me SEGA has been trying to get back into the hardware market for quite sometime. Apparently are planning a new ga me system with thier next arcade board the SEGADRIVE codename "RT NEPTUNE" that will lower development cost of boxed software and use a single die GPU processor.

Slagar
Slagar

"The group needs to adapt to changing business environment in which the market demand for new content geared to social networking services [and] smartphone is expanding." ... OR they need to stop making rubbish games!

thepyrethatburn
thepyrethatburn

@U_LOST_ME_87: Why would they want to do that? Look, I have a Dreamcast. I think it's a pity that things didn't work out. But I think the move to being a software-only developer was probably a good one. It allows them to make their games without undercutting their profits by having to sell hardware at a loss. This is to say nothing of getting into the market now. Frankly, given all of Sony's troubles, I wonder if Sony would not be better off doint the same thing. I wouldn't be thrilled with the market only being Microsoft and Nintendo, given the very different focus of the two. However, given Sony's IPs as well as all the trouble they have been having, I sometimes think that they'd be better off just as a software developer/publisher.

U_LOST_ME_87
U_LOST_ME_87

SEGA ! BRING BACK THE DREAMCAST GOD DAMMIT

vicsrealms
vicsrealms

Well, I helped out a little when they brought Shining Force, Shining Force 2, and Shining in the Darkness to Steam. I haven't spent $9 dollars that fast in a long time. If you want to make a quick $12 dollars Sega, then put out Phantasy Star 1-4 on Steam. Other then that I think the only Sega game I am looking at picking up is Shogun 2. Also, you might want to rethink your Dreamcast Collection. ~shiver~

vicsrealms
vicsrealms

[This message was deleted at the request of the original poster]

yearof3000
yearof3000

oneilgas@ WTF my friend send me a picture of that!

cheamo
cheamo

Vanquish was awesome, but I was able to play through it easily over a one day rental; I didn't really see the point in buying it. I'm assuming there were a lot of people like me.

jhpeter
jhpeter

Sega should buy Toe Jam & Earl rights, its a shame that Sega has so few exclusives mascots, at other side, NIntendo has Metroid, Zelda, Kirby.... Ps: Make Shenmue III for Xbox, Ps3, and the sales will be doubled.

NeonNinja
NeonNinja

I'm so glad Vanquish sold as much as it did! I was expecting a much lower number. But this is great news!

-Squirrel-
-Squirrel-

Sonic Colors is still on my must get list, but I so many games I haven't finished yet. Hey Sega isn't it funny how when you make good Sonic games you get rewarded with money and people actually wanting to play your games?

bliss1085
bliss1085

All companies go through a tough time but I definitely agree that SEGA has been out for too long to stay an underdog...with games like Bayonetta and Anarchy Reigns they aren't going anywhere anytime soon.

megakick
megakick

anarchy reigns looks awesome multi-player hack n' slash brawler.

anime_gamer007
anime_gamer007

Well, if they publishing games like Bayonetta, Vanquish and Valkyria Chronicles, I'm keep buying them. :)

kbaily
kbaily

Well see Sega when you make a good Sonic game people will buy it.

DEATH775
DEATH775

I wish the last challenge in vanquish wasn't so hard

oneligas
oneligas

the next Sonic game is going to have a 80 year old Sonic blazing by in a wheelchair

Wolflink001
Wolflink001

Looks like Sega is making a come back.

EdwardoMario16
EdwardoMario16

Quality over Quantity. Make less games but good games. More people will want them. More money. Better profit. Gee, Sega. What a concept.

Heshertonfist
Heshertonfist

Step 1: Sell less games Step 2: ??? Step 3: Profit!

Auction_Sniper
Auction_Sniper

"Also SEGA plans to abandon all non mobile/handheld 3rd party development and publishing next year in 2012" @Lindbergh2007. Do you have a source on this?

LindBergh2007
LindBergh2007

@TheArcade. Quite alot. In 2009 they went patent crazy and issued trademarks for dozens of hardware patents including controllers, USB drives, hard drives, wi-fi, circuit board chips,SSDs e.t.c. This came after they filed two trademark names for arcade hardware "RINGWIDE" and "RINGEDGE". On top of that they have a arcade trademark called "SEGADRIVE" which has remained unused since it was filed back in 2006. Under the radar console rumors have surfaced about SEGA building a 3D stereoscopic console from this arcade hardware. In addition to that Imagination Techologies signed an exclusive deal with SEGA to develop a globe ray tracing GPU for them called "Power VR Rogue" in June 2010. Several europeon game sites leaked out this report last summer, the links won't fit here so send me a PM if your interested in the link. Also SEGA plans to abandon all non mobile/handheld 3rd party development and publishing next year in 2012. So there's alot of intersting stuff going on at SEGA.