• November 12, 2003    Home > Games News > Article

    Sega's Profitability Secret Revealed

    Are the plans of Oguchi's 'Excitement Company' paying off early? No, but everyone is going crazy for UFO Catcher 7. Why? Details inside.

    Champagne time at SOJ?
    Sega today announced that its net profit has rocketed 485 percent, thanks to the performance of its amusement division. From April to September, the company with newfound survival blood took around $55 million in profit, compared to around $9.2 million in the same period last year.

    The latest positive Sega news is less indicative of early progress being made by president Hisao Oguchi's 'New Sega' than of an absolutely hysterical craze for UFO Catcher 7, commonly found at the very front of every amusement machine center in Japan as well as shopping malls and leisure centers - anywhere you'll find customers with some spare cash, essentially.

    "Arcade operators have an entire catalogue of enticing products to fill the machine with."

    The 'grabber' machine costs ¥100 (just under a dollar) for a couple of attempts to bag a cool prize - such as awesome Sonic plush toys. But arcade operators (the largest of which, remember, is Sega itself) have an entire catalogue of enticing products to fill the machine with. During our recent visit to Japan for TGS, we spent about ¥4,000 trying to win a fantastically sexy Chun-Li figure, and it would have been a damn sight more had we not eventually bagged her.

    It's the latest upbeat news to come from Japan, following Konami's projected 150 percent profit increase and Koei's reported 47 percent increase. Sega has surprised its shareholders, outperforming its own revised forecast of ¥5.7bn from last month.

    We spent about ¥4,000 trying to win a fantastically sexy Chun-Li figure."

    However, the consumer videogame arm of Sega's business made an overall loss of ¥1.8bn, with Oguchi explaining, "We expect the consumer game division will post a 1.5 billion yen operating loss in the full year, but the profitability of the operations has improved thanks to restructuring and cost cuts."

    And, despite the loss-making Sega Sports products, Oguchi wants to carry on trying to compete with EA. "We have made it clear that we will stay in the U.S. sports game market. We need to carefully plan how to compete with EA in terms of marketing, but we believe our games can win more market share because of their high quality." Bless.

    Despite the loss-making Sega Sports products, Oguchi wants to carry on trying to compete with EA."

    Perhaps Yu Suzuki's newly formed Digital Rex studio will help to improve the performance of Sega's home software business.

    Generally speaking though Sega is far healthier than three years ago, when it had debts of ¥120bn. Now it only has half that sum payable. In more exciting news for shareholders, Oguchi also confirmed that dividend payments will be resumed "in the next three years". Awesome!

    Keep it here for more Sega obsession.

    Adam Doree
    Director, Kikizo.com

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