Sega Aims to Expand Sales of its Japanese Games in the West; Plans to Create New IPs

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Today Sega announced its financial results for fiscal year 2018, which ended on March 31st, 2017.

As you can see in the table below, all the relevant income figures are in the black. Unfortunately, the results for the company as a whole aren’t as positive as in the previous fiscal year.

The press release also included a breakdown of the performance of the publisher’s video game business.

“Regarding the environment of the Entertainment Contents Business, a slowdown in the spread of smartphones in Japan and the predominance of leading publishers are accelerating in the market for digital games for smart devices. Therefore, provision of higher-quality content is expected, resulting in a trend of longer development lead times and higher operating costs. Meanwhile, in overseas business, future growth is expected mainly in Asia. With regard to the packaged game software market, expectations are rising for future expansion of the market due to the penetration of hardware of home video game console. In the PC games market, game distribution platforms such as Steam are expanding.”

“In the field of digital game software, in addition to existing titles, the Group launched new titles such as “Magia Record : Puella Magi Madoka Magica Side Story,” that f4samurai, Inc. (a consolidated subsidiary of the Company) develops and operates and “D×2 Shin Megami Tensei Liberation,” the first title for smartphones in the packaged game software series “Shin Megami Tensei.” However, the number of new titles launched was lower than the initial estimate.

In the packaged game software field, in addition to launching new titles including “SONIC MANIA” and “SONIC FORCES” from the “SONIC” series, cumulative worldwide sales of “Persona5” which began overseas development in the current fiscal year exceeded 2,000 thousand copies. Also, through sales from previously launched titles (catalog titles), sales amounted to 17,330 thousand copies (10,280 thousand copies for the previous fiscal year).”

The press release also mentions the outlook for the video game segment of Sega’s business. Interestingly, we hear that Sega aims to continue strengthening global releases of Japanese games and to create new IPs.

“With regard to the Entertainment Contents Business, centering on the field of digital game software, multiple new titles including mainstay titles will be launched, with the aim of further growth in profitability.

In the field of digital game software, the Group plans to launch 12 new titles including the new series for smartphone devices “kotodaman,” and the soccer club management simulation game “Pro Soccer Club wo Tsukurou! Road to World.”

In the packaged game software field, on top of further strengthening the global development of domestic titles, the Group will continue aiming for growth in profitability through creating new IPs and sales of catalog titles.”

The table below shows a breakdown of the results of Sega’s gaming business. Sales were slightly higher year-on-year, but operating income showcased solid growth. The outlook for the current fiscal year shows much higher sales, but slightly lower operating income.

Interestingly, the company plans to launch 22 game SKUs next year, of which 22 in the west and 9 in Japan. The reason why the number is much higher for the west is that in this kind of report different platforms are counted separately, and North America and Europe often get additional platforms.

As mentioned above, Sega sold 17,330,000 units of its games in fiscal year 2018, which is considerably higher in comparison to the previous year. In the current fiscal year, they forecast further growth of unit sales, which are predicted to reach 20 million.

Sega Aims to Expand Sales of its Japanese Games in the West; Plans to Create New IPs

Recently, Sega made several interesting announcements, including the return of Shenmue I and II, a new Sakura Taisen JRPG, and the Mega Drive Mini.



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