Sega Game Division Revenue Rises Slightly, But Company Overall Posts Loss

Sega Sammy, the parent company of game publisher Sega, on Friday reported earnings for the quarter ended June 30, revealing that gains in its gaming unit could not offset overall losses.

The Japanese company posted revenue of ¥52.9 billion ($425 million) for the quarter, down 41.2 percent compared to last year's haul of ¥90 billion ($723 million). In terms of profit, there wasn't good news here, either. Sega posted a ¥7.9 billion ($63.5 million) loss for the quarter, down sharply from a profit of ¥5.1 billion ($41 million) during the same period last year.

Sega attributed the downturn to a number of factors, the first of which was the economy.

"The economy still remained in the condition requiring further time for full recovery due to uncertainty towards a downswing in overseas economies arising from factors such as the slowdown of growth in the economies of emerging countries and European debt crisis," Sega said.

Regarding gaming specifically, Sega said the gains in digital games for smart devices in Japan were not substantial enough to offset the "shrinking" packaged game software business.

Sega's gaming division, Entertainment Contents Business, fared better than the company overall. For the quarter, Entertainment Contents Business saw net sales of ¥41.9 billion ($336 million), up 4.1 percent compared to last year. This business posted an operating loss of ¥739 million ($5.9 million) during the period, which was better than the ¥1.4 billion ($11.2 million) loss it recorded during the same quarter last year.

Some standout Sega titles in the period were mobile games like Chain Chronicle - Kizuna no Shintairiku, Puyopuyo!! Quest, and Phantasy Star Online 2, all which were "robust" in the quarter. Other mobile titles, including Hortensia Saga and Monster Gear, "got off to a flying start," Sega said.

In the packaged game business, Sega sold 1.83 million games "in spite of the lack of sales of major titles."

No specific sales numbers for any Sega games were announced.

Today's earnings report comes after a Sega Games executive admitted that the company betrayed fans in recent years.

"We did our best to build a relationship of mutual trust with older fans of Sega but, looking back, there have been some titles that have partially betrayed that [trust] in the past 10 years," Sega Games CEO Haruki Satomi said earlier this month.

"Sega in the 90s was known for its brand, but after that, we've lost trust, and we're left with nothing but reputation ... We'd like to win back the trust and become a brand once again."

Sega also recently underwent a restructuring, part of which involved 300 job losses and the relocation of the company's office in San Francisco.