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Profits tumble at Sega Sammy

Financial report calls for greater focus on smartphones and social networks

Sega Sammy Holdings Inc. reported declining revenue and profits for the six months ending September 30, 2011.

The company's overall revenue fell 29.9 per cent year-on-year to ¥152.6 billion ($1.94 billion/£1.21 billion). Net profit declined 83.7 per cent to ¥3.9 billion ($49.7 million/£31 million).

The report cited the aftermath of the Great East Japan Earthquake as key to its financial performance. The supply chain for the company's pachislot and pachinko machine business was "devastated" by the event, and prolonged electricity shortages also harmed the business.

Sega's consumer games division posted revenue of ¥33.8 billion ($431.8 million/£269.6 million), a year-on-year drop of 13.1 per cent. It reported an operating loss of ¥6 billion ($76.6 million/£47.8 million), up from ¥1.3 billion in the same period last year.

The games division sold a combined total of 4.8 million copies worldwide: 1.65 million in the US, 2.12 million in Europe, 1.06 million in Japan. The report noted that this is "below the performance level" of the same period last year.

"In the home video game industry, demand was generally weak in the US and European markets due to the headwinds such as sluggish personal consumption." the report states. "The Group needs to adapt to a changing business environment in which the demand for new content geared toward social networking services and smartphones Is expanding."

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Matthew Handrahan avatar
Matthew Handrahan: Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.
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