The SEGA SAMMY Group identifies its problems and competitive advantages as well as emerging, or potential, opportunities and risks arising from changes in the business conditions that each of its businesses faces and establishes strategies accordingly. Furthermore, we reflect valuable feedback from shareholders and other investors in business management decisions.
- ● Clearer trend toward survival of the fittest in the pachinko and pachislot machine market
- The trend toward an oligopoly favoring leading companies is becoming more pronounced. Given its large share of the pachislot machine market and financial muscle, the SEGA SAMMY Group views this trend as an opportunity to strengthen its standing even further.
- ● Greater scope for market share expansion in the pachinko machine market
- Compared with the pachislot machine market, the pachinko machine market offers the SEGA SAMMY Group greater scope for market share expansion.
- ● Expansion and change in demand of online game content market
- As the market for online game content for smartphones and mobile phones grows rapidly, the Group's significant developmental capabilities and financial strength are establishing competitive advantages.
- ● Proposal of new products and business models in amusement arcade machine area
- We will acquire stable earnings and invigorate the market by offering amusement arcade machines and business models that reduce the capital investment of amusement center operators and strengthen our relationships with them.
- ● Bolstering of amusement centers' management capabilities and development of new business formats
- Strengthening the management capabilities of existing amusement centers and developing new business formats that go beyond the confines of traditional amusement centers will create fresh opportunities to grow earnings.
- ● Integrated resort business (the casino business)
- Currently under deliberation in Japan, integrated resorts including casinos could become a longterm growth opportunity for the Group.
- ● Earnings structure reliant on the pachislot and pachinko machine business
- The Group's business results are highly dependent on the Pachislot and Pachinko Machine Business segment. If the segment has difficulty securing stable earnings, this dependence could become a significant downside risk for the Group.
- ● Further strengthening of market oligopoly as player population declines
- In response to a declining player population, pachinko hall operators' purchasing of new pachinko and pachislot machines is increasingly focused on products with brand power. Therefore, the Group faces the risk of slumping sales if its brand power weakens.
- ● Bias of development schedules toward second half of fiscal years and licensing risk
- Due to an entrenched imbalance in development toward the second half of fiscal years, the Group faces the risk of being unable to launch products before the end of fiscal years, which could affect business results significantly. Furthermore, the actualization of licensing risk associated with new product launches could prevent the Group from launching products on schedule.
- ● Changes in market demand
- Manufacturing amusement arcade machines takes a comparatively long time. Consequently, the Group manufactures these machines based on demand estimates. However, changes in player preferences or in business conditions or uncertain growth prospects could affect the Group's business results.
- ● Lackluster earnings from existing amusement centers due to decrease in player numbers
- Reflecting stagnant consumer spending and society's aging, declining player numbers could cause a slump in the earnings of amusement center operators and reduce their investment capacity, which would directly affect the earnings of the Amusement Machine Sales Business segment.
- ● Contraction and seasonal fluctuation of packaged game software market
- The packaged game software market is shrinking as the online game content market expands. In addition, demand is susceptible to fluctuation due to seasonal factors. Consequently, lost sales opportunities due to the Group's inability to provide an adequate supply of new products could affect business results.
