Sega Sammy Holdings posted its first quarterly operating loss in recent memory, with revenue falling sharply as the gaming machine division struggled and foreign exchange headwinds intensified. The Japanese entertainment conglomerate reported an operating loss of ¥519 million ($3.5 million) for the April-June quarter, a dramatic reversal from the ¥19.3 billion profit posted a year earlier.
Revenue declined 22.7% to ¥81.0 billion ($542 million), while ordinary losses ballooned to ¥2.1 billion ($14.2 million) compared with a ¥21.8 billion profit in the prior year period. Net losses reached ¥3.4 billion ($22.7 million), contrasting with the ¥24.5 billion profit recorded twelve months ago.
The entertainment content division, which houses popular franchises like Sonic and Persona, saw revenue drop 6.7% to ¥67.7 billion ($453 million). Despite launching Persona 5: The Phantom X in late June and maintaining steady performance from existing titles, ordinary profit tumbled 59.9% to ¥5.0 billion ($33.6 million). The Persona series sold approximately 1 million units worldwide during the quarter, yet this failed to offset broader market weakness.
The gaming machine business delivered the most severe disappointment, with revenue plummeting 61.8% to ¥11.0 billion ($74 million). The division swung to an ordinary loss of ¥3.6 billion ($24.3 million) from a ¥10.7 billion profit last year, as the company released no new pachislot titles during the quarter. While pachinko offerings like “Digi-Hane P Hokuto no Ken Jiho” and “P Zombie Land Saga” showed initial promise, they couldn’t compensate for the pachislot void.
Foreign exchange movements compounded the company’s difficulties, with currency losses recorded as non-operating expenses contributing to the widening ordinary deficit.
One bright spot emerged in the gaming segment, where revenue nearly doubled to ¥1.4 billion ($9.1 million) on strong sales of gaming equipment, particularly the “Railroad Riches” video slot machine series in North American markets. However, M&A-related costs from recent acquisitions of Dutch firm Stakelogic and U.S.-based GAN limited profit growth.
The company maintained its full-year guidance, projecting revenue of ¥475.0 billion ($3.2 billion) and operating profit of ¥53.0 billion ($355 million). Management expects the release pipeline to strengthen significantly from the second quarter, with titles including “Sonic Racing: CrossWorlds” scheduled for September and new Football Manager and free-to-play games planned for later in the fiscal year.
