Japanese Pachinko company Sega Sammy has announced its financial results for the nine-month period ending on December 31, 2021. The company experienced a notable recovery from the impact of the Covid-19 pandemic, with a 12.6% increase in sales compared to the corresponding period in the previous fiscal year.
Sales Breakdown:
Sega Sammy’s entertainment content business, which includes the renowned video game company Sega, contributed significantly to its sales revenue. With sales totaling JPY178.34 billion, the holiday season played a vital role in driving growth. The company attributed a 6.0% year-on-year growth to the popularity of home downloads, as consumers sought entertainment options during Covid-19 lockdowns. However, physical game unit sales declined by 32.7%, with games like Shin Megami Tensei V, Football Manager 2022, and Super Monkey Ball Banana Mania being among the favorites.
Pachislot and Pachinko Machines:
The sale of pachislot and pachinko machines proved to be a lucrative segment for Sega Sammy, generating JPY52.06 billion in revenue, marking a substantial 38.4% increase from the previous year. Sales of the Pachislot Anemone Psalms of Eureka Seven Hi-Evolution machine saw a remarkable 300% year-on-year growth, reaching 48,000 units. Combined with sales from the P Hokuto No Ken Toushin machine, total machine sales for the nine-month period reached 64,000 units, showcasing an 8.4% improvement.
Resort Operations:
Sega Sammy’s resort operations contributed JPY6.81 billion in revenue, reflecting a significant 37.3% rise. The Phoenix Seagaia Resort in Miyazaki, Japan, experienced a notable increase of 111.4% in visitors compared to the previous year’s third quarter. However, the Paradise City property in South Korea encountered a decline of 47.8% in customer chip purchases.
Financial Performance:
Despite a year-on-year increase of 8.1% in cost of sales, Sega Sammy achieved a gross profit of JPY99.43 billion, up 19.4%. Selling, general, and administrative expenses decreased by 4.1% to JPY66.76 billion, resulting in an operating income of JPY32.66 billion, representing a substantial 141.5% improvement from the previous year. Non-operating income reached JPY3.66 billion, nearly offset by non-operating expenses of JPY2.93 billion. After factoring in other income and losses, the total pre-tax income amounted to JPY35.5 billion, showing a significant year-on-year increase of JPY26.71 billion.
Outlook and Future Projections:
Based on its performance during the first three quarters of the fiscal year, Sega Sammy has raised its full-year projections. The company expects total sales to reach JPY315.00 billion for the year ending March 31, 2022, indicating a 13.4% increase from the previous financial year. This optimistic outlook is driven by stronger-than-expected sales of entertainment products and increased demand for pachinko and pachislot machines. However, the resorts division may face challenges due to the lingering effects of Covid-19 on customer demand and visitation.
Sega Sammy’s financial report demonstrates a robust recovery from the pandemic, with a notable increase in sales during the nine-month period. The company’s entertainment content business, along with the sale of pachislot and pachinko machines, played a significant role in driving revenue growth.