Sega Reports 22.7% Drop in Q1 Net Sales to $548 Million

Sega Sammy has released its Q1 financial results, revealing a decline in net sales to ¥81 billion ($548 million) and an operating loss of ¥519 million ($3.5 million). Although the company had few new titles in its portfolio for the quarter ending June 30, 2025, its overall net sales surpassed expectations, with the Entertainment Contents segment performing as anticipated. Key financial highlights for the quarter include: net sales of ¥81 billion ($548 million), down 22.7%, and an operating loss of ¥519 million ($3.5 million), compared to an operating income of $130 million in the same period last year. The Entertainment Contents segment saw a 6.7% decline in net sales to ¥67.7 billion ($458 million) and a 39% decrease in operating income to ¥7.1 billion ($480 million). Despite a limited number of new releases, the segment's net sales were largely in line with expectations, while the drop in operating income was narrower than anticipated. However, sales of catalogue games and Rovio titles underperformed, although new title sales remained steady. The company's recent free-to-play release, Persona 5: The Phantom X, exceeded expectations with over 1.5 million downloads on its launch day. In the quarter, sales of new titles reached 610,000 units, down from 710,000 in the same period last year, while catalogue titles sold 4.3 million units (down from 5.1 million) and full game sales totalled 4.9 million (down from 5.8 million). Sega is committed to its transmedia strategy, aiming to create a cycle of IP value enhancement and revenue expansion. The company plans to diversify its IP portfolio globally, including Sonic, and engage in various businesses such as game sales, animation, production, and character licensing. As part of this strategy, Sega opened its first physical store in Japan, Sega Store Tokyo, last month. The company has not revised its fiscal year forecast announced in May 2025.