Sega Sammy profit plummets 93 percent

News from Gamespot

Sluggish sales of Sega Sammy's Pachinko slot machines dropped the company's profit almost 93 percent during its first quarter, the company announced today.

Japan-based Sega Sammy Holdings Inc., which owns both Sega Corp. and Sammy Corp., reported a profit of 779 million yen (about $6.8 million). It was a sharp drop from its 10.7 billion yen ($93 million) take during the same time last year. Pachinko slot machines accounted for just 2.2 billion yen ($19.1 million) of the company's earnings this quarter, compared with 18.2 billion yen ($158.9 million) last year. The company's overall revenue, however, slipped less dramatically--a 15 percent dip to 85.6 billion yen ($746 million).

Sega Sammy blamed higher "upfront development costs" in making games for a loss of 4.06 billion yen ($34.9 million) in its games division--about twice the amount it lost last year. Sales of its video games--particularly those in the Sonic franchise and Noryoku Trainer Portable 2--increased this year to 16.5 billion yen ($143.8 million) from 11.6 billion yen ($101 million). But the company's game-development expenses rose 7 billion yen ($61 million) from a year ago, eclipsing any profit it would have otherwise made.

Sega Sammy insisted that despite the financial setbacks, its previous full-year earnings commitments are still on track.

Yeah, go go Sega :)

One reason sega should just develop for the Wii from here on out. The cost to make games for the ps3 is going to be rediculous. Even for Microsoft it can be pretty pricey. The market for games now either way is going to be bad. The cost to develop is so high and I think less and less people are buying their games now. Everyone thinks it doesn't hurt, but this just goes to show that it really does. Not just the companies but people like me who are in the business. Sales don't do good for a game then bam! Bye bye people on the production team. That's how EA is anyways. :mad:

That is the most ridiculious plan I have ever seen, Your idea is completely based around the wii as a major sucess. The wii is a gamble even for nintendo, the best thing any company can to is to cover as much ground possible and still be able to defend your borders from angry neighbors.

Im not endorsing companies like sony and microsoft, Im just saying that Pachinko machines are a major income for sega/sammy and shouldnt be droped as long as they are the big dog in the yard.