Sega announced its financial results for the full fiscal year which ended in March 2026, alongside some relevant changes in its strategy.
For the whole company, we learn that sales were 487.5 billion yen, up 13.7% year-on-year.
Operating income was 47,128 billion yen, down 2.1% year-on-year.
That being said, the company recorded impairment losses connected to Rovio (which we already knew about from the past quarter) and the online slot and live casino software provided Stakelogic, resulting in a net loss of 5.7 billion yen.
Among the factors contributing to these results were “soft” performance for full games, new free-to-play games, and Rovio. If you’re wondering, Sega defines “full games” those you buy traditionally and aren’t free-to-play.
Looking at the Entertainment Contents Business, which includes games, sales were 326.6 billion yen, up from 321.5 billion yen. Operating income was 32.4 billion yen, down from 40.8 billion yen.
We also learn that existing free-to-play games, DLC, and animation performed steadily, and licensing revenue grew steadily.
We also get the forecast for the ongoing fiscal year, which involves sales for the whole company at 510 billion yen and operating income at 44 billion yen.
For the Entertainment Contents Business, sales are expected to grow to 357 billion yen, while operating income is also expected to grow to 42.5 billion yen.
This is due to sales of new games expected to increase, in part due to the launch of new full games in mainstay IPs and the transmedia expansion and licensing revenue continuing to grow.
The company is reviewing its 3-year medium-term plan, which is supposed to end in March 2027, aiming for significantly lower results. For instance, now it expects 107.3 billion yen in EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortisation) instead of the planned 180 billion yen for the Entertainment Contents Business.
It still plans to achieve the improvement in development capabilities centered on its Japanese studios and growth in businesses related to licensing Sega’s own IPs.
On the other hand, there remain challenges in the “sales capabilities” of full games and delays in the release and underperformance of new free-to-play games for the global market, and the impairment loss related to Rovio.
Specifically, Sonic Rumble Party performed weakly, and a “Super Game,” which was an “online AAA global hit” that Sega has been touting for a while, has been canceled. It’s worth mentioning that Sega was planning or developing multiple of these “Super Games” and we don’t yet know whether they canceled only one or scrapped the whole concept.
For the future, Sega is lowering the priority of free-to-play games, and over 100 developers have already been transferred to the development of full games focusing on mainstay IPs, from the development of free-to-play games.
Rovio will continue its efforts towards achieving a global Game-as-a-Service, but will focus on its own restructuring first.
To address the issue of “sales capabilities” mentioned above, Sega plans to “review its marketing and sales strategy by introducing globally standardized KPI (key performance indicators) and management rules to promote overall optimization,” and by “clearly defining global common rules and the scope of local discretion.”
In the field of data and technology, the company plans to “integrate data assets previously dispersed across regions and redefine them as management and business assets” and to “build an analytics platform usable across global operations and optimize investment efficiency.”
In the field of organization and Process, Sega plans to “transform decision-making and operational processes through the use of data and technology, and promote their integration across frontline operations.”
This should be achieved by “reducing analytical and operational workloads and improving process efficiency through the use of AI and other technologies” and “standardizing individual-dependent decision-making and task execution to transition to reproducible operations.”
To this end, a plan is being formulated to maximise the initial sales of new games and improve the decay rates of their sales over time, while layering repeat sales of recent releases and older games. This plan should start sequentially with mainstay games launching in the current fiscal year (from April 2026 to March 2027).
Speaking of its full games leveraging mainstay IPs, Sega plans to release 4 in the current fiscal year by April 2027, 4 or more in the next, which will end in April 2028, and a focus on mainstay IPs in the following fiscal year ending in April 2029 as well.
It’s worth mentioning that Stranger than Heaven, Persona 4 Revival, Total War: Warhammer 40k, Total War: Medieval 3, the new Virtua Fighter game, Alien: Isolation, and the new games based on Crazy Taxi, Golden Axe, Jet Set Radio, and Streets of Rage are all confirmed.
If you’d like to compare these results with historical data, you can read our report about the past quarter, based on data released in February.
Other gaming companies have already announced their financial results this quarter, including Koei Tecmo, Microsoft, Sony, Nintendo, Konami, and Shift Up. You can expect more reports on this topic in the coming days and weeks.
