Sega's game division holds strong despite 54.5% cut to company-wide profit forecast

Operating income for games up by $35 million despite net sales decline

By Haydn Taylor.Published Thursday 30th November 2017, 12:08pm GMT

Sega has made an adjustment to its forecasted financials for the year ending March 31, 2018.

The initial forecast, published on May 12, 2017, saw net sales projected at $3.38 billion for the period, up from $3.26 billion from 2016.

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However, following the adjustment net sales are expected to go down by $445 million to $2.93 billion, a decrease of 13.2%.

Things are looking even worse in terms of profit, with an expected decrease 54.5%. Original projections estimated profit for the period to hit $97.9 million, but new figures have it at $44.5 million. This is worsened by the fact that profits for the same period last year were $245.7 million.

Sega's game division appears to be performing reasonably well despite this stark decline. Net sales for games were only adjusted by $44.5 million, down to $1.9 billion. Additionally, operating income generated by games is actually expected to rise from the previous estimate, up from $89 million to $124 million.

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In a statement, Sega said: "As to the entertainment contents business, strong performance is evidenced by operating income as of the end of the first half surpassing the previous full year forecast and such.

"Although launch of new titles for digital games field might delay compare to initial plan, several new titles include mainstay titles are scheduled to be released in packaged games and amusement machine sales field of the entertainment contents business in the second half, operating income is expected to surpass the previous forecast."

Sega's woes lie primarily with its Pachislot and Pachinko machine business, which hemorrhaged cash, plummeting around 30% from a projected $1.3 billion to $934 million.

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