Sega Reports Q1 Revenue Increase Despite Underwhelming Game Sales

Sega Sammy's Q1 financial results show a significant increase in revenue, despite new game sales falling short of expectations. The company's overall revenue for the quarter ending June 30 rose by 63% to ¥108 billion ($756.9 million), with operating income surging 712% to ¥22.5 billion ($123 million). The main driver behind this growth is the strong recovery of the Paschinko and Pachislot machines business, which saw sales skyrocket by 385% year-on-year following the COVID-19 pandemic. In contrast, Sega's video games division experienced a modest decline in game sales of 3%, while operating income plummeted 45%. The company attributes this to lower-than-expected sales of new titles and repeat sales of older games, citing the post-pandemic downturn as a contributing factor. New game releases during the quarter, including Etrian Odyssey Origins Collection and Sonic Origins Plus, collectively sold 740,000 units. Meanwhile, legacy game sales totaled 4.87 million, representing a decline from the 5.12 million sold in the previous financial quarter. Despite this, Sega remains optimistic about its prospects, forecasting a 9% growth in game sales over the full financial year. This confidence stems from a robust release schedule for the next nine months, featuring titles such as Persona 5 Tactics, Total War: Pharaoh, Like a Dragon Gaiden, Hyenas, and Sonic Superstars. The company is also poised to finalize its acquisition of Rovio in the coming week.