Sega suffers slump in full-year profits

Sega Sammy Holdings has unveiled its financial results for the year ending March 05, revealing that falling videogames sales have resulted in a 79.8 per cent drop in net profits for the publisher.

However, Sammy's net profits rose by 50.9 per cent thanks to sales of Japanese pinball machines, known as "pachinko". The increase was enough to ensure that Sega Sammy's joint net profits rose to 50.3 billion yen (US$467.4) - up from 40.9 billion yen for the previous year.

Sega merged with the toy manufacturer last October after struggling to compete with gaming titans Sony and Nintendo. Industry analysts say the fall in the number of children in Japan is making it harder for toy and entertainment businesses to survive.

Sega Sammy also issued a forecast of 56 billion yen net profit for the year ending March 2006, with estimated revenue of 567 billion yen.