Strong Performance in Pachinko and Integrated Resort Segments Drives Profits

May 2, 2023 Japan Earnings & Filings

Sega Sammy Holdings, a Japanese gaming giant, announced an increase of 24.1% in profit to shareholders of the parent of JPY45.9 billion (US$336 million) for the year ending 31 March 2023, helped by growth in its pachinko, integrated resort, and entertainment contents areas.

The improved results included an increase in net sales of 21.4% year over year to JPY389.6 billion ($2.85 billion), as well as a 46.0% increase in operating income to JPY46.8 billion ($343 million).

Sega Sammy reported overall sales of 94,000 units in FY23 for its pachinko and pachislot machine segment, up from 77,000 in the same period the previous year. This was made possible by the success of the “6.5 models” that were introduced in July 2022. The company noted a “high level of utilization” that resulted in “sales units significantly exceeding the business plan at the beginning of the fiscal year due to multiple additional sales.”

Ordinary income more than doubled to JPY20.7 billion (US$228 million), while net sales in the division increased year over year by 24.2% to JPY94.3 billion (US$690 million).

Net sales increased by 33.2% year over year in the resort industry, which includes Sega Sammy’s local non-gaming resort Phoenix Seagaia Resort and its 45% stake in the Korean integrated resort Paradise City. The ordinary loss decreased from JPY6.74 billion (US$74.3 million) in FY22 to JPY3.22 billion (US$35.5 million).

The company reported that since travel restrictions were relaxed in June 2022, casino sales at Paradise City have gradually recovered. However, after October 2022, “a rapid recovery of the drop amount (purchased amount of chips by customers) by Japanese VIPs was seen, [which] has exceeded the level before the spread of COVID-19.”

The industry-leading computer gaming, or entertainment contents sector, of Sega Sammy saw net sales increase 19.9% to JPY282.9 billion (US$3.12 billion) and an increase in ordinary income of 11.7% to JPY41.2 billion (US$454 million).