Sega Sammy Holdings is set to divest its Phoenix Seagaia Resort to U.S.-based Fortress Investment Group, according to Nikkei sources. This move is part of Sega Sammy’s strategy to concentrate its efforts on video games and digital entertainment sectors. The resort, situated in Miyazaki and featuring amenities such as hotels and golf courses, has recently rebounded financially, showing a significant recovery with a 30% increase in overnight stays in the year ending March 2023, and achieving positive ordinary income for the first time in 13 years.
Fortress Investment Group, known for its extensive holdings in the hospitality sector, including about 30,000 hotel rooms in Japan, will acquire all shares of Phoenix Resort. Sega Sammy will retain a 20% voting stake in the resort through newly issued shares, maintaining a minor yet strategic involvement in the property’s operations.
The Phoenix Seagaia Resort, opened in 1993 and once backed by local government, has a tumultuous financial history, including filing for bankruptcy in 2001 due to high operational costs and economic downturns in Japan. However, it turned profitable under previous U.S. ownership by Ripplewood before Sega Sammy’s acquisition in 2012.
This sale aligns with Sega Sammy’s revised focus outlined in their 2021 medium-term plan, which included scaling down on integrated resort ventures such as the proposed casino project in Yokohama. The company’s shift to digital platforms was further emphasized by its recent acquisitions, including the purchase of Rovio Entertainment and U.S. online casino operator GAN.
This strategic realignment allows Sega Sammy to better allocate resources towards its core businesses, aiming to bolster its position in the global gaming industry. Meanwhile, Fortress’s acquisition enhances its footprint in Japan’s flourishing tourism and hospitality market.
