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Sega's revenues slide amidst restructuring

Sega's revenues slide amidst restructuring

Fri 02 Nov 2012 9:32am GMT / 5:32am EDT / 2:32am PDT
PublishingDevelopment

Games division makes an operating loss of 780 million as publisher reduces number of releases

Sega's games division was the source of less than a third of the company's total revenue in the first-half of FY12.

In the period ending September 30 2012, Sega's consumer business generated revenues of 35.7 billion ($445/276m/€346m), an increase of 5.6 per cent over the same period last year. Despite the rise in sales, the division made an operating loss of 780 million ($9.7m/6m/€7.6m) - a significant improvement over the 6 billion loss the previous year.

Sega has drastically reduced the number of games it produces in an effort to restructure the business. As a result, it sold 2.7 million units in the first half of the financial year. In the digital space, Phantasy Star Online 2 reached 1 million registered users, and out-performed Sega's revenue estimates.

Revenues for the entire company were down 10 per cent year-on-year to 136.6 billion ($1.7b/1.1b/€1.3b), but cost-cutting measures led to a 2.7 per cent increase in profits to 3.9 billion ($48m/30m/€27m).

8 Comments

Bruce Everiss Marketing Consultant

1,692 594 0.4
6 billion yen loss in one year from the game division. That's about 75 million dollars. Not an industry record, but still impressive.
Obviously Sega have fixed the problem.
It would be nice to see this iconic gaming brand make the most of their storehouse of IP right across the platform diversity that we now enjoy. The potential is massive.

Posted:2 years ago

#1

Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.

2,287 2,507 1.1
The Yen simply isn't being kind to any Japanese exporter.

Posted:2 years ago

#2

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Jim
A lot of Sega games were developed in the West. And the plastic and cardboard manufacture also in the West.
So I don't see the high Yen causing a $75 million loss.

Posted:2 years ago

#3

Keldon Alleyne Handheld Developer, Avasopht Ltd

471 479 1.0
If I hear another mention of plastic and cardboard on GI.biz just one more time I swear to God I'm going to transfer an MP3's to vinyl! Don't make me do it Bruce!!! >:(

Posted:2 years ago

#4

Keldon Alleyne Handheld Developer, Avasopht Ltd

471 479 1.0
On a more serious note this concerns me:
Games division makes an operating loss of 780 million as publisher reduces number of releases
What are we to make of this?

Focusing on cost cutting tends to bother me when it takes priority over the increase of profit making tasks activities. I won't parrot my opinion on what I think should happen with the industry as a whole, that's just lame and off topic, but I really feel that R&D is a valuable investment and Rovio is a clear example of casting the net wide and yielding a massive gain.

p.s. wasn't the 6Bn loss last year? and does the $9.7m loss include the $83m cost of restructuring?

Posted:2 years ago

#5

Bruce Everiss Marketing Consultant

1,692 594 0.4
@Keldon Alleyne

Perhaps this tells you what they cut and why: http://www.metacritic.com/search/game/sega/results

Posted:2 years ago

#6

Keldon Alleyne Handheld Developer, Avasopht Ltd

471 479 1.0
@Keldon Alleyne

Perhaps this tells you what they cut and why: http://www.metacritic.com/search/game/sega/results
:) well I've always been a firm believer of reform over demolition when possible. Of course immediate financial crisis' make it difficult to make that call, which is why you should never play poker with 10 if you aren't willing to go all in.

Posted:2 years ago

#7

Ian Brown IT Developer / IT Infrastructure

107 26 0.2
Hmm I wonder when/if PSO 2 makes an appearance in Europe as I really was a fan of the original on Dreamcast and if anything its a game that introduced me to co operative online play. The footage I've seen of it is doing a good job to keep my interest in this climate of realistic warfare and western fantasy games.

Posted:2 years ago

#8

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