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Sega laments "weak" game sales even as hard numbers rise

By Matthew Handrahan

Sega laments "weak" game sales even as hard numbers rise

Mon 11 May 2015 9:24am GMT / 5:24am EDT / 2:24am PDT

Full-year unit sales up 41 per cent, Consumer revenue up 11 per cent, but Alien and Sonic failed to perform

Sega boosted its packaged software sales by 41 per cent in the financial year ended in March, though that 12.3 million units was still categorised as "weak" by the company's management.

It is important to note that, when Sega refers to "packaged games," it is principally to distinguish certain products from those that only received a digital release. To that point, Alien: Isolation's sales figures included both physical and digital sales, and yet The Creative Assembly's well regarded AAA project managed only 2.1 million units by the end of March, 2015. Alien: Isolation was in development for more than three years, so that is a relatively poor return on what was no doubt a large investment.

And not all of those units were sold at full price, either. SteamSpy puts the game's owners at around 440,000, but it has been available for as little as 7.99 or $12.49 within the recorded period.

That observed weakness wasn't all down to Alien, of course, with the company's dual Sonic Boom releases - Rise of Lyric on Wii U and Shattered Crystal on 3DS - only selling a combined 620,000 units. They are the lowest selling major Sonic titles in the series' long history.

In terms of hard numbers, though, Sega made progress in every area of its Consumer business, which covers console, PC and mobile games.

Overall, it sold 12.3 million units of its packaged games, up 41 per cent year-on-year and 1 million units more than the February forecast. The division earned 111 billion ($925.7m) in revenue, up 11 per cent year-on-year, with 44.8 billion from physical sales and 44.7 billion from digital. Operating income was 4 billion ($33.4m), hardly a fortune, but still twice as much as the year before.

For the most part, Sega's packaged games strategy is its international strategy, with just 2.1 million of those 12.3 million sales made in its native Japan. In March, the company made it clear that it regards Japan as principally a mobile market now, and this financial report only reinforces that idea. On March 31, 2015, Sega was distributing 117 mobile games in Japan, and while some of those will be shuttered, it expects to add another 47 by the end of March, 2016.

Among that group of 47, just one will be "pay-to-play." Compare that to the 65 pay-to-play games among the existing 117, and there can be no doubt about the business model Sega is putting its weight behind.

As a whole, Sega Sammy earned 355 billion ($2.96b) in revenue, down 6.1 per cent year-on-year. It made a net loss of 11.3 billion ($94m), versus a profit of 30.7 billion last year.

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