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Sega profits rise as console game division approaches break-even

Japanese publisher Sega has seen a massive boost in its first half profits thanks to better than expected performance of its arcade division, while the loss-making console games division is rapidly approaching break-even.

Japanese publisher Sega has seen a massive boost in its first half profits thanks to better than expected performance of its arcade division, while the loss-making console games division is rapidly approaching break-even.

The company recorded net profits of 5.93 billion Yen (â'¬46.7 million) for the six months ended September, a massive increase over last years profit figure of 1.01 billion Yen (â'¬8 million) and even slightly ahead of the company's forecast last month, which upgraded its expectations from 200 million Yen (â'¬1.6 million) to 5.7 million Yen (â'¬44.9 million).

The boosted profits were due to strong performance of the company's arcade division, which enjoyed significant success for its "Key of Avalon" arcade machine, as well as "UFO Catcher 7" - the latest version of Sega's hugely popular "toy-grabber" arcade games, which are known as UFO Catcher machines in Japan. Sega also manufactures many of the toys which are found in these machines, either from its own properties or under license from other anime and game companies.

The company reported a loss of some 1.8 billion Yen (â'¬14.2 million) in its console game division for the first half, but this loss was lower than expected as sales of its J-League soccer management title and car racing title Initial D exceeded expectations. The console division is rapidly approaching break-even, and Sega hopes to realise a profit in this division next year.

For the full year, Sega expects to see profits of 8 billion Yen (â'¬63.1 million), up some 162 per cent over the previous year's figures, on revenues of 196 billion Yen (â'¬1.6 billion). These figures would represent the company's strongest yet since it took the decision to leave the console hardware business three years ago, and come as the company is also slashing its debts - dropping its interest bearing debt load to 60 billion Yen (â'¬474 million) in March, down from a figure of 120 billion Yen (â'¬948 million) around two and a half years ago.

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Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.

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