Sega Sammy has released its consolidated financial statements for the six months ending September 30. The company exceeded expectations and reported sales of 283.5 billion yen ($2.4 billion), up 14.1 percent from the same period last year, and a rise in net income to almost 38 billion yen ($322 million), up 52.3 percent. The company attributed the better-than-predicted financial results to the "main old-regulation" pachinko slot title Hokuto No Ken SE, which sold close to 320,000 units. Another factor cited was strong sales of long-selling amusement machine products.
Despite the positive numbers, Sega Sammy remained cautious and downsized figures for the full fiscal year's predicted sales and income. It slashed its sales forecast for pachinko machines from 570,000 units to 301,000. This is due to Japan's July 2004 revision of regulations for gaming machines, the company stated, and that the new regulation-compliant machines will be expected to take a while to gain popularity. The number of pachinko parlors and players in Japan has been in decline, making the company cautious about predicted earnings in the future.
Sega Sammy holdings also revised its forecasted operating results for the fiscal year 2006 and reduced its expected net sales by 102 billion yen ($867 million) to 580 billion yen ($4.9 billion) and net income by 15 billion yen ($130 million) to 60 billion yen ($635 million). Full-year net profits were expected to be down 60 billion yen ($507 million).
Software sales were considerably up, with sales of 5.8 million units compared to 1.3 million copies in the previous six months. The company is predicting game revenue for the fiscal year ending March 2007 of at least 6.7 million copies in Japan, 6.3 million in the US, and 8.9 million in Europe. In its amusement center business, Virtua Fighter 5 was billed as strong selling, although the children's card game machines Oshare Majo Love and Berry and Mushiking: The King of Beetles were reported as being slightly down year on year.
The emergence of next-generation game consoles is a "prime opportunity" to capture a greater share of the home video game market, according to the report. The company also stated its intention to "establish local product development bases in overseas markets" through "aggressive" mergers and acquisitions with development studios.
