Japan’s Sega Sammy Holdings saw its net sales plummet in the three months to 30 June 2018, down 35.8% year-on-year to ¥68.8 billion (US$616.2 million) due primarily to big declines in the pachislot and pachinko business.
Group-wide operating income was down 94.4% on the same period last year to ¥935 million with profit falling 97.1% to ¥337 million (US$3 million) as Sega Sammy sold just 9,000 pachislot and 40,000 pachinko units compared with 25,000 and 97,000 respectively in the 2017 quarter.
Net sales in the segment declined 60.9% to ¥21.5 billion.
The company’s video and arcade game segment also struggled, down 10.5% to ¥45.0 billion, however there was better news in the resorts business where net sales grew 12.5% to ¥2.3 billion. Operating loss for the segment narrowed from ¥735 million last year to ¥674 million in the three months to 30 June 2018.
Sega Sammy operates non-gaming holiday destination Phoenix Seagaia Resort in Miyazaki Prefecture and is a 45% partner in South Korean IR Paradise City, which it is using to gain experience in IR operations ahead of a planned bid for one of the three Japanese IR licenses on offer following passage of the IR Implementation Bill in July. Phoenix Seagaia Resort saw a 33.3% year-on-year increase in guests for the quarter.
The company didn’t provide any revenue figures for Paradise City but said “signs of gradual improvement in profitability were seen.”
“The group will continue to strive to improve the value of facilities in Paradise City, where Phase 1 Stage 2 development facilities, including the club and spa, are scheduled to open in September 2018 or later,” Sega Sammy said. “The group will continue to endeavor to accumulate further integrated resorts development and operational know-how through dispatching personnel to Paradise City.”
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