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.

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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.
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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