SEGA Gaming Blamed for Parent's Losses

Sega Sammy Holdings Incorporated - the company that owns the SEGA we video gamers know and love (well, some bitter Nintendo old-schoolers might still be fighting ancient battles) - has posted a loss. That loss is apparently down to poor decision making when it came to a choice of PS3 over Wii development.

The video game (consumer games as opposed to arcade game) division saw an operating loss of 5.9 billion yen (£29.2 million) from the previous period's profit of 1.7 billion yen (£8.4 million) - this was apparently "due to slower sales of its video games in Japan."

Koichiro Ueda, head of Sega's public relations department, referred to the company's decision to release more games for the PS3 than Nintendo's best-selling Wii, saying, "As rebuilding our consumer video game business is crucial, we now need to review our game title strategy more flexibly to adapt ourselves to changes in the trend of the market".

The parent company has announced a 52.5 billion yen (£259.5 million) net loss for the year ending March 2008 - this is compared to its previous year's profit of 43.46 billion yen (£215.36 million). This turned into an operating loss of 5.8 billion yen (£28.7 million). This is down from a 76.53 billion (£378.8 million) profit in the year from April 2006 to March 2007.

Sega Sammy plans to close 110 of its 430 arcade outlets as well as cutting 400 jobs, "mainly at SEGA (the video game division)".

This must surely come as a blow to the operation in the UK at least, which has seen strong chart placings consistently with the likes of Mario & Sonic At The Olympic Games, Iron Man: The Official Videogame, SEGA SuperStars Tennis.

These figures were, however, foreshadowed in the company's own report for the nine months ended December 31, 2007. This included the text, "In the consumer business, overseas videogame software sales were up compared with the same period in the previous fiscal year with strong sales of Mario & Sonic at the Olympic Games.

"However, domestic videogame software sales were down year on year. Sales volume in Japan and other regions totaled 1,880 thousand copies during the first three quarters of the current fiscal year, while sales totaled 6,250 thousand copies in the U.S. and 6,520 thousand copies in Europe. Overall sales came to 14,650 thousand copies."

^{Sources: Hemscott
Thomson Financial}