Sega-Sammy financial results beat all expectations

Sega-Sammy Holdings has released its half-year financial results, revealing a massive increase in both revenue and net profit that doubled the company's initial forecasts for the period.

The holding company oversees the hugely successful pachinko operations of Sammy Corporation, Sega's international arcade, PC and console businesses and controls a number of subsidiary developers, all of which have contributed to the substantial growth in revenue and profit margins for the first half of the year.

Revenue for the period ending 30th September was posted at Yen 24.9 billion (EURO 178.9 million), substantially higher than the Yen 18 billion (EURO 129.4 million) forecast earlier in the year. Significantly, the company's earlier prediction was in itself almost double initial forecasts, which Sega-Sammy revised following huge profit boosts from sales of coin-operated pachinko gambling machines during the first quarter.

Profit was reported as Yen 14.2 billion (EURO 102 million), almost doubling earlier predictions. The company attributes the increase largely to a continued surge in sales of pachinko machines, fuelling the immense popularity of Japan's legalised gambling system. Research and development costs have decreased, as the company begins to re-use key components in new machines, a new product line for which is due to launch next month.

Sega-Sammy's videogame division is also seeing noticeable increases in revenue, as several titles hit stores earlier than initially scheduled and the arcade and console business in the West continues to expand and diversify during the next generation hardware transition.

As a result of the six-month figures, combined with the impending launch of its new pachinko machines and the continued expansion of its arcade operations and console development in the West, Sega-Sammy may make further revisions to its full fiscal year forecasts.