SEGA-Sammy Q1 £50m Loss News

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Following a poor performance last fiscal year, SEGA-Sammy today reported a net loss of ¥10.53 billion (£49.84 million) for fiscal Q1 period ended June 30th 2008. During the three-month period SEGA-Sammy recorded net sales of ¥74.60 billion (£353.08 million) compared with ¥95.42 billion (£451.62 million) in the same period last year, leading to an operating loss of ¥10.29 billion (£48.70 million) in contrast to an operating loss of ¥2.43 billion (£11.50 million) in the same period last year.

SEGA-Sammy attributed the poor performance to continued uncertainty surrounding the Japanese economy, blaming the food and fuel crisis for causing global instability. The number of pachinko parlours and players continues to drop, which is a key element to SEGA-Sammy business strategy, as a result of the new legislation forcing models to meet new standards. The sector recorded ¥12.29 billion (£58.17 million) in net sales, resulting in an operating loss of ¥4.35 billion (£20.59 million).

In the arcades SEGA-Sammy continues to report strong demand for large-scale units and cards based systems, resulting in net sales for the section amounting to ¥14.52 billion (£68.72 million) and operating income of ¥703 million (£3.33 million).

The company's amusement centre sector continues to be sluggish, largely as a result of rising oil prices. As a result the company plans to close seven low-performing amusement centres throughout Japan, in an attempt to redcue the losses. Section net sales were Section net sales were ¥17.42 billion (£82.45 million), bringing an operating loss of bringing an operating loss of ¥1.58 billion (£7.48 million).

Equally, the home videogame section reports increased demand due to the rapid increase of PlayStation3, Xbox 360 and Wii. Strong overseas sales of Mario & sonic at the Olympic Games, Iron Man, The Incredible Hulk and Valkyria Chornicles in Japan buoyed the sector, however with many titles slated for release for the second half of the year, the segmented recorded net sales of ¥30.53 billion (£144.50 million), resulting in an operating loss of operating loss of ¥4.12 billion (£19.50 million).

SEGA-Sammy made no further changes to the company's forecasts for the next period of full fiscal year