Today Sega announced its financial results for the first nine months of the fiscal year, related to the period between April and December 2024.
First of all, we should mention that Sega Sammy has operated an absorption-type company split and has transferred its “Gaming Business” to its wholly owned subsidiary Sega Sammy Creations Inc.
I mention this with “Gaming Business” within quotation marks because what Sega refers to as “Gaming Business” as is common in Japan, has nothing to do with video games, and someone is bound to get this wrong.
Sega’s “Gaming Business” is actually its casino and gambling machines business. Sega’s video game business is actually called “Entertainment Contents Business.”
So, basically this news is completely unrelated to games and I’m mentioning it simply because someone’s bound to misinterpret this as some sort of revolutionary restructuring focusing on video games. It isn’t and it’s completely unrelated. It’s also unrelated to Pachinko, which has its own “Pachislot & Pachinko Machines
Business.”
Moving on, according to the official documentation, sales were 322.3 billion yen, down 8.1% year-on-year. Operating income was 43.7 billion yen (down 20.8% year-on-year).
That being said, the company defines the performance “Strong overall” focused on the Entertainment Contents Business (the actual video game business) and animation.
If we look at the Entertainment Contents Business (again, video games), sales were 238.6 billion yen (up compared to the 220.4 billion yen achieved the year before and Ordinary income was 37.5 billion yen, up against last year’s 19.9 billion yen.
The company also operated a change to its full-year forecasts with sales at 425,000 million yen, lower than the previously forecasted 445,000 million yen. Operating income is 46,000 million yen vs the previous 45,000 million.
The increased profit is due to the strong performance of video games and animation. It’s also worth mentioning that the loss of business related to the sale of Amplitude is causing the adjusted EBITDA to be forecasted as negative, specifically 1,300 million yen in the red.
The revised forecast for the Entertainment Business is 320,000 million yen in sales (down from 335,000 million yen) and 44,000 million yen in ordinary income (up from 40,000 million yen).
The reason why sales are lower than expected is the cancellation of Football Manager 25 and the delay of two free-to-play games. Ordinary income is higher due to “repeat sales in Full Game, strong sales of downloadable content, and the strong performance in the Animation area.”
We hear that Sonic X Shadow Generations and Metaphor: ReFantazio have “sold well.”
For the rest of the fiscal year, Sega is launching Like a Dragon: Pirate Yakuza in Hawaii “and other new titles” and expects steady repeat sales for previously released games. The company also expects revenue contribution from DLC sales and subscriptions.
The cancellation of Football Manager 25 was decided because the developers were aiming for a major evolution of the series by renewing the UI and graphics and adding new elements, but found out that they needed more time. So they’re skipping directly to Football Manager 26 and carrying over the development assets from 25.
If you’re interested in comparing today’s results with historical data, you can check out our article about the previous quarter’s financial results, announced in November.
Other gaming companies have also already announced their financial results this quarter, including Bandai Namco, Electronic Arts, Nintendo, Marvelous Entertainment, Koei Tecmo, Capcom, Microsoft, and Konami.