Sega Sammy, the parent company of Sega, didn’t have the best Q3. In fact, its financial year hasn’t been very strong in general.
Regarding the nine months ending on December 31st, 2018, the Sonic publisher reported a decline in overall revenue at 6.8% or $2.27 billion. This news is on top of a $24.5 million drop in digital games profits. That said, this area did bring in $267.2 in revenue. Packaged games did okay, bringing in $73.6 million from $397.3 in revenue. Unfortunately, Sega also reported a 20% dip in its pachinko and pachislots machines as well. According to calvinayre.com, the company predicted the drop in interest and are getting into the casino industry to compensate.
That’s right, Sega has partnered with a South Korean group, Paradise City, to bring gambling to Japan. This move is in anticipation of Japanese gambling licenses hopefully issuing come 2020. Despite this, the group had to revise their pachinko sales projections from $1.1 billion down to $929.4 million.
The company was also set to release 12 titles this fiscal year, but that number has been reduced to nine. However, Sega believes they will make up for these operating losses. Games like Football Manager 2019 are serving the company well in the packaged department, too. That said, numbers are still down from Q2 as sales from previous titles slowed.
Overall, the entertainment division of Sega brought in $1.51 billion, with both digital and physical games bringing in a combined $664.7 million of that number.
According to the release, none of Sega’s newer games have lived up to sales expectations. This is due in part to the Japanese mobile scene, and a weaker quarter thanks to game delays. Their ongoing mobile titles were particularly disappointing for Sega. As a result, the group had to issue revised projections, but are hoping that upcoming releases can make up a decent Q4.
Revenue predictions are now 13.6% lower than before, with operating income projects dropping 38.1%.