Sega Sammy shows increased profits ... without games

by Justin Murray { Nov 11th 2006 at 3:00PM }

More good gaming biz news keeps rolling in, though this silver cloud comes with a gray lining. Sega Sammy (more commonly known as just Sega) announced a 52% increase in profits of $322 million for the first six months of the year, compared to $211 million last year. Before gamers stop and cheer, the profits aren't helped any by the actual video game division.

Sega Sammy's game division was hampered by R&D costs resulting in a $57 million loss despite an increase in software sales. The full year forecast is also lower due to problems with the company's pachinko division. This just goes to show you how minimally actual video games impact the company.

Video games only make up 14% of Sega Sammy's $2.4 billion in sales. Since they're pulling a loss, holding onto the game division may start looking like a bad idea. Will Sega be able to make a transition into the next-generation era, or will they start feeling the pressure? No other company is showing similar financial difficulties moving into 360 and PS3 development. No company can last forever, but let's hope Sega manages to stay in the game a bit longer ... we still have a soft spot for the Dreamcast.

Tags: Phantasy Star, PhantasyStar, Sammy, Sega, Sega Sammy, SegaSammy, Sonic

Reader Comments (Page 1 of 1)

matt @ Nov 11th 2006 4:36PM

Long live the DC!

guises @ Nov 11th 2006 4:57PM

So... why does Sega do so poorly anyway? They put out a fair number of really excellent games and they have franchises that are almost as big as Nintendo's. I realize that the games industry is tough, but they have to be fucking up pretty royaly, given the position that they are in.

Korexz @ Nov 11th 2006 5:24PM

They could make a whole barrel of money if they put the Dreamcast games up on the Virtual Console for the Wii... ;)

Sponge @ Nov 11th 2006 9:31PM

If they die, I hope to God that they sell Sonic and the rest to Nintendo. Only Nintendo would treat them right.

Mabui @ Nov 11th 2006 9:12PM

I would feel very sad if Sega's game division (despite its resent lumps) went under. I could only hope that Sonic team would find a place with Nintendo (Like minded sorta game types)

Though my biggest worry if that would happen, would be that Sonic Team couldn't carry their franchises with them, and Nintendo would just have them making Nintendo IP games instead (Which, would be a waste of their talent)

I'm still hoping for Skies of Arcadia 2 to come out.. at some point.. :/

It'll be really sad if they ditch their video game division, I mean, it'll hardly be sega if they aren't making games anymore, may aswell drop the whole "Sega" name and just go with Sammy after that.

reppy @ Nov 12th 2006 2:41AM

I don't think their flagship title, Sonic, was able to make the jump to the 3D world. Sonic was all about speeding through hoops. It doesn't really translate well in the 3D world. You end up feeling like you're watching the game, with occasional input required to move onto the next flying through hoops sequence.

Compare to Nintendo's Mario and Zelda series.. both of which have had huge success in the 3D world.