Seeing the Concrete Benefits of Establishing Separate Companies

In fiscal 2016, the year ended March 31, 2016, the new SEGA Group set out continuing to create moving experiences as its mission and took its first step. Although titles introduced in the digital game area did not garner sufficient market endorsement, other business areas saw the tangible benefits of the previous fiscal year's cost structure reform as profitability improved markedly.

In the amusement center operations area, existing amusement centers achieved industry-leading, year-on-year sales growth, while the amusement machine sales area finally produced hit products, such as the music game CHUNITHM. Further, in the packaged game software area business, results contributed to a sense of real improvement, with operations in Japan, the United States, and Europe moving into the black in fiscal 2016. In particular, steady establishment of local development capabilities in the United States and Europe through mergers and acquisitions has begun to bear fruit.

Structure reform efforts did not only entail reforming cost structures. We strengthened capabilities as an organization through efforts that included changing mindsets. Our sales growth testifies to the success of such efforts. As well as speeding up decision making, the establishment of separate companies has engendered a greater sense of responsibility and urgency in each independent business. I understand viscerally that senior management teams and individual employees have become intensely focused on growing their company.

Shifting Viewpoints Constantly to Take on Fresh Challenges

Aiming to reach operating income of ¥20.0 billion in the fiscal year ending March 31, 2020, we will keep our foot on the gas in revenue structure reform. We must focus strongly on realizing self-sustaining growth. Of course, that is the mission in the digital game area, which we view as a growth business. However, if businesses in which we hope to maintain earnings levels do not realize self-sustaining growth, even maintenance will become difficult. Therefore, in all business areas we intend to shift viewpoints constantly to take on fresh challenges. One example of a fresh challenge is our collaboration with Konami Digital Entertainment Co., Ltd., to develop digital e-money infrastructure, which will enable us to build business models that are not dependent on coin-based operations.

The SEGA Group will pursue a target profile based on continuing to create moving experiences. While we do not necessarily have to be as innovative as the former SEGA, I want us to keep our image as a group that does different, fun things. On the other hand, as the group's leader I am strongly committed to remaining focused on innovation in business management and achieving our targets for fiscal 2020.