SEGA has just put out their latest financial report for the last three months that ended on June 30 and outlined why the last few months have been a solid quarter. We shall go into detail on what did well, how much cash they made and what SEGA-Sammy are planning for the future (at least what they let us know).

So let’s get to it.

The Games

This SEGA financial report sadly mostly focus on titles that do well in Japan, unless they do really well. For example one of their biggest re-launches was with Phantasy Star Online 2 on the PlayStation 4 which as considered a massive success for SEGA (in Japan) with it getting 130,000 players simultaneously. Doesn’t seem like a whole lot, but if they are happy. SEGA says that the game celebrated its fourth anniversary on July 4, 2016 and that Phantasy Star Online 2 still remains a popular online game within Japan. Now we complain in the comments about how we are still waiting for it.

Since smartphone gaming is huge in Japan, we obviously have to talk about games that are popular over there. SEGA notes that their new title “Liberasion of Azure” has robust sales and major titles they held many events for like Chain Chronicle, PuyoPuyo!! Quest and Hortensia SAGA continue to do well.

SEGA stated that their package game software sales amounted to “2,410 thousand copies”, which is hard to understand. 2,410 units (EDIT: It means 2.4 million units), especially when they had some big titles released, seems rather on the low side. I mean, even if they just released one game in the last 3 months, world wide, its low. But they said its higher than the same period last year and that sales have been strong in the overseas markets (that’s us). One of the stand out sellers was Total War: WARHAMMER, while they didn’t go into specifics on how much that game sold, they did say that the Total War franchise has sold over 20 million units.

This means that net sales in video games were ¥46,700 million ($462,431,339 USD) an increase of 17.9% from the same previous fiscal year. Operating income was ¥4,941 million (48,926,869 USD) which is a operating loss of ¥4,941 million ($48,926,621.97) for the same period from the previous fiscal year.

Pachinko/Pachislot Machines

Titles like “Pachislot CODE GEASS Lelouch of the Rebellion R2” had strong pachislot sales of over 29k units. Which is above the results from previous fiscal year. As for pachinko machines business, the title “CR BIG DREAM ~ SHINGEKI 99Ver.” had strong sales which lead to an overall sale of 20,000 units of pachinko machines. Pachinko slot machines sold a little less than they did the same time last year (by a decrease of 1,000 units). That to me is solid in a business prospective, considering that SEGA-Sammy are the leaders in Pachinko/Pachislot sales around Japan.

Net sales in the pachinko/pachislot machines business were ¥21,239 million ($210,312,188.63 USD) which is a increase of 114.8% from the same period in the previous fiscal year. Someone is going to get a raise, huh? Operating income was (3,396,461.46 USD) which is a operating loss of ¥6,759 million ($66,928,767 USD) compared to the same period last year.

Resort Business

Seems that the biggest stinker in this financial report is the resort business and that is mostly due to cancellation of lodging, golfing and banquets in one of their leading resorts due to the Kumamoto Earthquake that happen earlier this year near Phoenix Seagaia Resort. Over at the Orbi Yokohama resort it was also slow even after they did their ‘Shaun the Sheep‘ event during Golden Week. Though indoor theme-park ‘Tokyo Joypolis‘ had a good time thanks to anniversary events and collaborations with popular manga Detective Conan (aka Case Closed in the USA). SEGA didn’t talk much but mentioned that they operate casinos in Incheon, South Korea through PARADISE SEGASAMMY Co.,LTD but didn’t get into if they are successful.

The resort business net sales were ¥2,694 million ($26,664,430.74 USD) which is a decrease of 21.7% for the same period last fiscal year. They also had a operating loss of ¥898 million ($8,888,233.38 USD) which is a loss of ¥591 million ($5,851,461.45 USD) for the same period last fiscal year. Not very good, but how much can be blamed on one resort?

The Future

SEGA says that there has been a ‘slowdown’ in spread of smartphones in Japan and that predominance top titles are accelerating the market of digital games on smart devices. This means that SEGA will need higher-quality content and will result in longer development lead times and higher operating costs. SEGA has also stated that their overseas business has seen a growth, but mostly comes from Asia, but this could also be due to them getting more packaged titles then we have gotten in the West. For example, they already got Yakuza 0 a little after its release, while we won’t get it until next year.

SEGA also sees their software packaged titles growing mostly due to ‘next generation consoles’ which I don’t know if they are talking about PlayStation 4 and Xbox One, considering they have been out years or they are talking about the Nintendo NX. They talk about having PC games in development for Europe, USA and Asian markets, which is a positive thing. A increase in package release sales isn’t really out of the question for next year seeing as they will finally launch their next big Sonic game with Project Sonic 2017.