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Surge in packaged games drive Sega's full-year sales to $3.4bn

Boxed products were biggest revenue driver for games business, but future releases may be delayed by COVID-19

Japanese publisher Sega has released its full-year financial results, showing growth across the board.

The publisher reported net sales of ¥366.6 billion ($3.4 billion) for the 12 months ended March 31, 2020 -- up 10.5% year-on-year.

Operating income rose 111.3% to ¥27.6 billion ($257.8 million), while profit attributable to parent was up 421% to ¥13.8 billion ($128.9 million).

In the Entertainment Contents segment, which handles its video games business, sales were reported as ¥247.7 billion ($2.3 billion), up nearly 13% from the previous financial year.

Operating income for this business was reported as ¥14.8 billion ($138.3 million), up 51% year-on-year.

While digital games were largely to thank for this growth -- a trend Sega notes is continuing amid the COVID-19 pandemic -- the publisher also reported a "significant increase" in packaged games sales.

Over the course of the year, 26.7 million boxed games were sold, up from the 23.4 million shifted in the previous financial year. Packaged games sales generated ¥78.2 billion ($730.5 million), showing year-on-year growth of 43%.

In fact, packaged games were comfortably the largest revenue source for Sega's Entertainment Contents business, followed by amusement machine sales at ¥51.1 billion ($477.3 million) and digital games at ¥47.2 billion ($440.9 million).

By comparison, packaged games were second largest segment for this part of the business last year, just ¥1 million behind amusement machines at ¥54.6 million ($510 million).

The surge in boxed sales was attributed to the launch of several key titles, including Team Sonic Racing, Persona 5 Royal, Total War: Three Kingdoms, Football Manager 2020, Mario & Sonic at the Tokyo 2020 Olympic Games, and the Japanese release of Yakuza: Like A Dragon.

The publisher reiterated its response to the COVID-19 pandemic, with all employees working from home since the end of February. It has also temporarily closed certain operations, such as its amusement centres and resorts.

But the need to work from home is starting to delay its development schedule. Sega says there is "concern about the impact on external development partners" and warns that, "if the current citation is prolonged", future titles launched may also be delayed.

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