SEGA back in black but moving towards social games

Japanese publisher SEGA's parent company has enjoyed a dramatically better first financial quarter than 2009, hauling in an operating income of ¥14,951 /$173 million for April to June 2010.

For the same period last year, SEGA Sammy Holdings suffered an operating loss of ¥7820 / $90.5 million. Net sales totalled ¥91,340 / $1058 million, up 51.1 per cent on last year's ¥60,641 / $702 million.

While the company is generally in better health than 2009, its consumer business remains at an operating loss of ¥636 / $7.4 million. That said, it is a significant recovery from last year's first quarter loss of ¥4500 / $52 million.

In total, the company sold 3.3 million units, which primarily constituted recent releases Iron Man 2 and Alpha Protocol - neither of which were received entirely favourably by critics.

The company prescribed its ongoing struggle in the consumer field to diminished overseas sales, and intended to address this by moving further into social and mobile gaming.

"In the home video game software industry, the demand was generally weak in the U.S. and European markets due to the headwind like sluggish personal consumption," read a SEGA statement to investors.

"The Group needs to adapt to changing business environment in which the market demand for new content geared to social networking service (SNS) and smartphone is expanding."

Nonetheless, overseas territories remained Sega's biggest earners for consumer software. North America pulled in 1.68 million units, Europe 1.33 million and the rest of the world (including Japan) mustered just 270,000 sales for April to June.

The arcade and amusement machine arm of the company was SEGA's major helping hand out of the red. For Q1 2010, it earned ¥1399 / $16.2 million - having lost ¥1077 /$12.5 million at this time last year.

SEGA's current fiscal year ends in March 2011.