Sega Sammy Holdings, a prominent gaming conglomerate based in Japan, recently disclosed its financial performance for the fiscal year ending on March 31, 2024. Despite facing challenges in certain segments, the company showcased resilience and growth in key areas, contributing to its overall positive performance.
Overall Financial Performance:
Sega Sammy Holdings reported a notable surge in group-wide sales, amounting to JPY 467.8 billion (US$ 3.0 billion), representing a substantial 20% increase compared to the previous fiscal year. However, the profit attributable to owners of the parent witnessed a decline of 28.1% to JPY 33.0 billion (US$ 211 million). This decrease was primarily attributed to a loss from structural reform in its Europe operations and higher tax expenses. Despite the decline in profit, ordinary income surged by 20.8% to JPY 59.7 billion (US$ 382 million), driven by robust performance in various segments across Asia, including pachinko and pachislot, resorts, and consumer (video gaming) sectors.
Pachinko and Pachislot Segment:
Sales in the pachinko and pachislot segment witnessed remarkable growth, soaring by 44.3% year-on-year to JPY 135.9 billion (US$ 870 million). This surge was primarily fueled by the pachislot segment, which recorded unit sales of 180,090, significantly surpassing the figures of pachinko.
Ordinary income in this segment more than doubled, reaching JPY 41.8 billion (US$ 268 million), underlining the robust performance and profitability of Sega Sammy’s operations in this domain.
Paradise City Integrated Resort Joint Venture:
Sega Sammy’s partnership with Korea’s Paradise Co in the Paradise City integrated resort witnessed a significant recovery, with sales surging by 65.9% to KRW 448.7 billion (US$ 328 million).
Despite challenges, the company achieved a profit of KRW 900 million (US$ 658,500) from its 45% stake in the joint venture. The recovery in casino sales, particularly driven by Japanese VIP customers, along with strong performance in hotel sales, contributed to this positive outcome.
Future Projections and Outlook:
Sega Sammy Holdings anticipates a slight decline in sales for the fiscal year 2025, primarily attributed to the anticipated decrease in the pachinko and pachislot segment. Additionally, the impending transfer of its controlling stake in the non-gaming resort Phoenix Resort to an associate is expected to impact sales. However, despite the projected decline in sales, profit attributable to owners of the parent is forecasted to climb to JPY 39 billion (US$ 250 million), indicating the company’s strategic initiatives aimed at enhancing profitability and mitigating potential challenges.
Sega Sammy Holdings’ fiscal year 2024 performance reflects a blend of challenges and successes across its various business segments. While the company faced headwinds in certain areas, such as its operations in Europe, robust growth in segments like pachinko and pachislot, as well as the recovery of its joint venture in South Korea, underscore its resilience and strategic agility. Looking ahead, Sega Sammy remains focused on navigating market dynamics, capitalizing on growth opportunities, and delivering value to its stakeholders amidst evolving industry landscapes.