Sega Sammy earnings turn red in Q1

Sega Sammy is coming off a banner year in fiscal 2011, when profits were up 105 percent on revenues of ¥396.7 billion. Matching that pace in its in-progress fiscal year is proving to be a challenge, however.

Reporting on its first quarter earnings for the April-June period, Sega Sammy said net sales fell 28.5 percent year-over-year to ¥65.3 billion ($850 million). The Japanese company's bottom line dipped into the red during the quarter, with Sega Sammy posting a net loss of ¥2.22 billion ($28.9 million).

Sega Sammy saw hits across all its divisions, though its Japan-focused pachislot and pachinko business posted the biggest declines, due largely to the Great East Japan Earthquake, which struck the island nation on March 11. The segment's revenues were down 38.9 percent during the quarter, coming in at ¥29.9 billion ($384 million). Sega Sammy did note that it has seen recent signs of recovery in this division.

As for video games, Sega Sammy said sales in its home consumer business fell 22.7 percent to ¥16 billion ($208 million). The publisher attributed this decline to weak demand in the US and European markets, while also reiterating previous statements that the segment "needs to adapt to [a] changing business environment in which the market demand for new content geared to social networking [services] and smartphone is expanding."

Virtua Tennis 4 proved to be Sega Sammy's top release during the quarter with 670,000 units sold. Thor: God of Thunder and Yakuza: Of the End sold near-equivalent amounts at 400,000 units and 430,000 units, respectively.

In the US, Sega Sammy sold 700,000 total units, while Europe sales came in at 1.02 million units. Sega Sammy's Japanese sales amounted to 600,000 units, while all remaining regions accounted for 2.33 million units.