Revenues up at Sega, but arcade closures hit profits

Japanese firm Sega Sammy Holdings has announced its first set of group results since it was formed in a merger last October, with the Sega division revealing increased sales offset by a major drop in operating profit.

Sega's revenues for the nine-month reporting period, which ended on December 31st, were up marginally on last year's figures, rising 1.4 per cent to 146.5 billion Yen (1.1 billion Euro), but the division's operating profit fell 54.9 per cent to 3.45 billion Yen (25.4 million Euro).

The company praised strong sales performance in North America and Europe for its improved sales, with Sonic Mega Collection Plus fingered as a key product in the US market, while Sports Interactive's Football Manager 2005 proved to be the firm's biggest ever launch in Europe.

However, the operating profit for the division was affected adversely by what were described as "unexpected closures" of game arcades - reversing the situation over the past few years where the performance of the arcade sector has made up for disappointing results from home console games.

The overall results for the Sega Sammy Holdings group were more positive, with Sammy's gambling machine and arcade division reporting significant success and helping the firm to realise almost 400 billion Yen (2.94 billion Euro) in sales during the period.

Group net profit for the combined company totalled 46.2 billion Yen (340 million Euro), and the company restated its projections for the full year to March 31st, with 53.5 billion Yen (394 million Euro) net profit anticipated on sales of 528 billion Yen (3.89 billion Euro).