Physical sales up, digital down in Sega Sammy's Q1 results

Video games business contributes to 50.2bn sales, but download sales down 21% year-on-year

Sega Sammy has released results for the first quarter of its fiscal year, and it shows a marked increase in boxed product sales.

For the three months ended June 30th, 2017, Sega's packaged titles generated 14.4bn - a 35% year-on-year increase over the 10.7bn made in Q1 2016, GamaSutra reports. The bulk of physical sales is reportedly back catalogue, with titles released before this quarter accounting for 71% of units shifted.

A notable sales drive for the packaged business was Persona 5, by Sega Sammy-owned developer Atlus, which has shipped over 1.5m copies since releasing in Japan in September 2016. It was released worldwide in April 2017.

Digital sales, meanwhile, actually saw a 21% decrease, down from 12bn to 9.5bn. It's a surprising drop given how digital centric Sega's games portfolio has become through its focus on PC titles like Total War and Football Manager, plus its push towards a stronger mobile business.

In the report's overview, Sega Sammy notes that the digital decrease may be down to both the slowdown in Japan's smartphone market and the growing dominance of leading publishers in that area.

"Provision of higher-quality content is expected, resulting in a trend of longer development lead times and higher operating cost," the company added.

Overall, Sega Sammy's Entertainment Contents segment - which include video games - saw sales rise by 7% year-on-year to 50.2bn.

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