Sega Sammy annual revs slip to $4.49 billion

Sonic publisher sees earnings slide 6.5%, though losses halved to $239 million from a year prior.

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In February, Sega Sammy said that it would be trimming its workforce in the wake of flagging sales and a weakening global economy. As part of its decision to reduce head count by approximately 18 percent--or 560 jobs--the publisher significantly revised its full-year financial outlook downward. And though the good news for Sega Sammy is that the company lost less than what it thought it would, the bad news is that the publisher still posted losses of ¥22.9 billion ($239.5 million).

Sonic isn't the same golden-ring collector he once was.

Reporting on its fiscal year-end results this week, Sega Sammy said that revenues for the period fell 6.5 percent to ¥429 billion ($4.49 billion), down from ¥458.9 billion ($4.8 billion) a year prior. However, the aforementioned losses were a significant improvement over fiscal-year 2008, which saw a red pool of ink amounting to ¥52.5 billion ($549.5 million).

Sega Sammy's home-gaming business again sagged on the publisher's financials. Sonic Unleashed and Football Manager 2009 were the publisher's top-performing games released during the fiscal year, and the company also called out Mario & Sonic at the Olympic Games as a continued strong seller. In all, the division--which also includes toys and mobile phones--saw revenues dip 7.5 percent to ¥131.6 billion ($1.38 billion), with operating losses amounting to ¥941 million ($9.85 million).

Stymieing losses was Sega Sammy's pachislot and pachinko machine business. Thanks to a number of popular new releases during the year, the arcade machines logged sales of ¥162.5 billion ($1.70 billion), up 11 percent year-over-year. Operating income also saw a significant spike during the period, rising 72 percent to ¥14.5 billion ($152 million).

Looking ahead to its current fiscal year ending March 31, 2010, Sega Sammy expects to continue to hedge its sinking revenues, with sales expected to be down 2 percent to ¥420 billion ($4.39 billion). The publisher also expects to reverse its string of losses during the year and expects to end up posting a net profit of ¥15 billion ($157 million).

Discussion

39 comments
TheArcade
TheArcade

Has anyone else besides me noticed that Sega's games sold within' the millions only on their legacy hardware? (Please do correct me if I'm wrong!) Sure they had games that sold well on others like the PS2, 360, Wii, Gamecube and what not but it doesn't look like any of their games broke over a million on consoles other than their own when Sega used to make hardware... assuming this is true I wonder what's missing and why Sega's games aren't selling like they used to.

wiidsduelpack
wiidsduelpack

I think the problem with Sonic games is that there are so many games that gamers got bored of them. There is also no variety on the games. Mario games include adventure, RPG, racing, and music and party. Sega also lost its magic.

AzelKosMos
AzelKosMos

While Sega's in house developed games don't really interest me anymore, some of the titles they publish do such as Alpha Protocol, Bayonetta. So i hope they survive.

NandoSupes
NandoSupes

Sonic is a great character and of the most recognisable game icons ever. I remember when I used to play the first Sonic's games (which I still do). they were fun and very well developed. but as soon as they went 3D with Sonic forget it. it was not the same again. Sega needs to go back to 2D with Sonic,make a well 2D Sonic game with today's technology like the old days of the Genesis.some games belong in 2D,and IMO Sonic is of those games.

SteelTiger360
SteelTiger360

Sonic Unleashed wasn't too bad a game, he was actually very fast and had small signs of speed hazards and I thought the download content was very challenging if they would've stuck to the same old things people would've gotten bored of sonic and complained about that. The saddest argument I usually ever hear is people complaining about the new directions they tried to takes Sonic into, at least it was technically all about sonic and not any of the other characters (You never play as chip, and tails only when you're doing flying missions). The Werehog wasn't that bad of a transformation it was out of left-field but it wasn't that bad. Everyone just keeps complaining about the Sonic Franchise to the point they wouldn't know a good game no matter what this company (owned by sammy or not) does and its sad cause Nintendo's been doing anything and everything with Mario with little to no complaints at all (Remember Sunshine ?). Eitherway Sonic Unleashed was a pretty good clean up from 06 (didn't you guys see how fast he moved ? )and a great start in my opinion for the franchise, looking forward to a sequel.

wwonka666
wwonka666

Also, they need to talk to MS and Sony about getting a lightgun peripheral for their systems (and not one like came with Time Crisis 4 either) so that I can experience House of the Dead: Overkill with HD graphics, man that game is awesome.

wwonka666
wwonka666

Sega has a goldmine in just releasing collections re-done in HD for PS3/360, but they aren't doing it. Sonic's Ultimate Genesis Collection was a step in the right direction, but why not release a collection of Saturn games and/or Dreamcast games and/or release them on PSN or XBLA for $5 a piece, I know I would buy the Saturn/Dreamcast games like Nights, Crazy Taxi, Fighting Vipers etc... for $5. But no, they try and charge $10 for Outrun and an even more ridiculous price of $15 for Virtual On. If Sammy knew what they had, they could make a mint.

yboucher
yboucher

It's ok guys... Sega-Sammy is just a money laundering operation for the yakuza now, it doesn't matter whether they're profitable or not, apparently...

kavadias1981
kavadias1981

I feel sorry for Sega but they really do need to start again with the way they make their games. Hire me Sega and I will direct your games into exactly what we gamers want! Sonic returning to his 2D roots but in HD! A new Streets of Rage with the same techno 80's atmosphere of the originals! It isn't difficult so just do it already!

LiliShake
LiliShake

They have to understand when they're making bad fiscal decisions. But apparently the suits all like to overlook the obvious things. Like, say, exclusives. Less of them would be a good start. It's not about fanboyism here, it's about money, and quite frankly, a title like Madworld would have sold MUCH better on 360 and PS3. Hell, those graphics would transition well with very little touch up, so why not? It would hurt nobody to do a 360 version of Vakyria Chronicles, and even if it wasn't viable on 360 or PS3, Nights could have been put on PS2.

tmorri603
tmorri603

I am a huge Sega fan and it is hard to see them a shell of their former selves. Back in the day when you heard that Sega was making a game, you wanted the know everything about it and could not wait to get it. Now you hardly pay any mind when they talk about new game. They have some of the best IP's in the gaming. It's like they have lost the magic they once had. I just wish that the Sega that gave Nintendo all they could handle in the past would return.

runstalker
runstalker

zakkess Posted May 14, 2009 5:03 pm PT "maybe the would make money if they went back into console buisness. and made sure the launch went good and they had good backup. 1 more time sega. one more time." Since we're headed that way, Sega should perhaps introduce a download-only console with some great 1st party games. I don't imagine Sega Sammy has the cashflow to introduce a full-fledged media disc-based traditional console in their current situation, but a clever Sega-branded download/HD content console would fly. I'd line up for a new Sega console. I think 'Sega' retains a strong hardware rep among adult gamers that grew up on SMS/Genesis/Saturn/Dreamcast.

Zathic
Zathic

I think Sega should make more games like Valkyria Chronicles, that game is awesome

zakkess
zakkess

maybe the would make money if they went back into console buisness. and made sure the launch went good and they had good backup. 1 more time sega. one more time.

runstalker
runstalker

The golden era Sega only exists in spirit. Although they sometimes cooperate with them on projects, literally all the Sega-defining 1st party superstar devs have long since quit the fold and moved on. After Sammy moved in, the company culture of Sega changed forever - especially when that amazing ring of 1st party teams was fragmented and re-assigned. Glimmers of hope here and there (i.e., the Yakuza games) but Ye Olde Sega is truly no more.

Wings_008
Wings_008

SEGA died after sammy group bought it a while back, much like Atari, this great pioneering company is being devoured by sharks in this cold cruel world and most of its staff had moved to microsoft while it was developing the XBOX, sammy now treats SEGA's workers like sheeps, to me SEGA left when it gave up the hardware developing

gamepunk86
gamepunk86

i haven't played recent sonic games. most of them got bad reviews and such. personally i love sonic and sega. they were what got me into video games when i was 7 or 8 years old. maybe the recent games were okay but sonic adventure was pretty good on dreamcast and adventure 2 was okay. i kinda wish sega had the power sony does now

SearchBomber
SearchBomber

People complaining about Sonic should just give up on the franchise because you'll never be satisfied with another Sonic game ever. Ever. EVER. It could be one of the best games ever and you still wouldn't be satisfied.

jinzo9988
jinzo9988

Let's reverse the revenue loss with a -decent- Sonic game. Can we at least get that?

kbaily
kbaily

This should be a wake up call to Sega. First of all, I am happy they're making real effort to make "hardcore" Wii games, but I'm talking about subpar games like Sonic and the recent Goldenaxe. Stop trying to shove out crappy retreads in hoping of getting some nostaglic fans to buy them. Stop treating Sonic like a whore and make a good game for him. Meaning no more werehogs, no more guns, no more annoying friends butting in.

Dark_Mits
Dark_Mits

Empire: Total War was not released until very late during the fiscal year, so it's natural that it didn't provide many earnings; it can be a strong money bringer for the current fiscal year however. I can see Conduit selling low because it is released on a platform where the FPS addicts are low on numbers. But what do you expect? When people don't buy games like Valkyria Chronicles, how are you supposed to make money with your "inferior in quality" titles?

okassar
okassar

LOL!The title is very misleading,especially since they put the wrong money sign.

SalarianChemist
SalarianChemist

Sega is a great company, but they have such poor management. If Sega were to listen to consumers and give them what they want, the world would be a much happier place. I suppose I should give Sega credit that they put games like Virtual On on Xbox Live Arcade. This made a lot of people happy. But a lot more people would have been happy if Sega would have made that game $10 instead of $15.

taylormadederek
taylormadederek

I say that ever since they got out of the console business they are a sinking ship. They have almost ZERO good IP's. Good luck to Sega but I can say that I would invest no money in them.

gatsbythepig
gatsbythepig

That is unfortunate only 4billion, poor guys.

Taegre
Taegre

Intrakitt, just because Sega has been losing money on developing/publishing games that are actually original and creative for decades doesn't mean it's going to bug me any less.

TheArcade
TheArcade

Aw nuts. -_-* Come on Sega and Sammy you used to make great Sonic games and Guilty Gear is still a wonderful IP.

Intrakitt
Intrakitt

Taegre: Of course MadWorld isn't going to push their sales. They probably lost money with that title. It's too different and artistic to sell a lot of copies. I think a lot of people were turned off by the whole black and white thing.

LindBergh2007
LindBergh2007

I guess you didn't hear me guys didn't hear me. Once again, Sega Sammy finacial outlook for 2009-2010: http://www.segasammy.co.jp/english/pdf/release/notice_accounting%20change_20090513_e.pdf In the amusement machine and amusement center industry, conditions remained difficult due to sluggish personal consumption. The industry awaits the development and launch of new game machines that will support amusement center operators and lead the market by addressing the diversified needs of customers, including families and casual players. (since when does families and casual players head to the Arcades to play?) In the home video game software industry, growth in demand for software has leveled off in Japan, due to widespread proliferation of the current generation of game platforms. Nevertheless, demand remains firm in Europe and North America.In this business environment, the SEGA SAMMY Group implemented business structure reforms aimed at reinforcing the earnings foundations of its various fields of activity.

paul25
paul25

[This message was deleted at the request of a moderator or administrator]

CHADbomb
CHADbomb

Is it OK if we can have Virtua Fighter 5 R for consoles! ^_^?

Redshark691
Redshark691

The Conduit was a sure buy for me... until I found out there was no local multiplayer. I guess Sega just can stand to release a game with nothing wrong with it.

Phylyn5151
Phylyn5151

What is with the thumbs downs? I was just kidding. Grow up people.

LindBergh2007
LindBergh2007

Got SegaSammy's finacial blueprint for fiscal ending March 31,2010: http://www.segasammy.co.jp/english/pdf/release/tanshin_final_20090513_e.pdf "In the amusement machine and amusement center industry, conditions remained difficult due to sluggish personal consumption. The industry awaits the development and launch of new game machines that will support amusement center operators and lead the market by addressing the diversified needs of customers, including families and casual players. (since when does families and casual players head to the Arcades to play?) In the home video game software industry, growth in demand for software has leveled off in Japan, due to widespread proliferation of the current generation of game platforms. Nevertheless, demand remains firm in Europe and North America.In this business environment, the SEGA SAMMY Group implemented business structure reforms aimed at reinforcing the earnings foundations of its various fields of activity." A new system called "RingEdge" is coming.

TexasAnMGrad2K
TexasAnMGrad2K

I hope we never see SEGA go away. I would feel as if part of my childhood had been stolen away from me. Kinda like I felt when I saw Transformers.

nurse_tsunami
nurse_tsunami

I bet they did pretty well with the release of Empire Total War this last year as well. Hopefully Creative Assembly won't see much in the way of cuts.

Taegre
Taegre

That's not nearly as bad as other losses we're seeing lately, but it's an injustice that Sega is losing money after releasing Madworld.

Phylyn5151
Phylyn5151

So.....No Genesis 2 in the near future?