Management Policy
Business Strategies
Business Summary
The SEGA SAMMY Group is mainly comprised by the Entertainment Contents Business, which offers a diversity of fun through consumer and arcade game content, toys and animation; the Pachislot and Pachinko Machines Business, which conducts everything from development to sales of Pachinko/Pachislot machines; and the Gaming Business, which operates integrated resorts and develops casino gaming products and software.
Business Plan
| FY2024/3 Results | FY2025/3 Forecast | |||
|---|---|---|---|---|
| Net sales | Overall | 467.8 | 445.0 | |
| Entertainment Contents | 318.7 | 335.0 | ||
| Pachislot and Pachinko Machines | 133.2 | 105.0 | ||
| Gaming | 1.9 | 3.0 | ||
| Other / Elimination | 14.0 | 2.0 | ||
| Adjusted EBITDA | Overall | 54.7 | 62.0 | |
| Entertainment Contents | 22.0 | 50.0 | ||
| Pachislot and Pachinko Machines | 44.5 | 26.5 | ||
| Gaming | -0.4 | -1.5 | ||
| Other / Elimination | -11.3 | -13.0 | ||
(Billion yen)
Sales Composition
Business Plan by Segment / External Environment
1. Entertainment Contents Business
Business Plan
| FY2024/3 Results | FY2025/3 Forecast | |
|---|---|---|
| Net Sales | 318.7 | 335.0 |
| Operating Income | 28.9 | 38.0 |
| Ordinary Income | 30.8 | 40.0 |
| Adjusted EBITDA | 22.0 | 50.0 |
(Billion yen)
FY2024/3 Results
Sales Increased and profit decreased YoY
・Sales increased due to steady performance of Japan and Asia CS, and Rovio’s entry into the group
・Profit decreased mainly due to weak performance of CS in Europe
FY2025/3 Forecast
Expect the increase in sales and profits YoY due to growth in the Consumer area
・Repeat sales expect to be high level since FY2021/3 (CS)
・ F2P expects to grow driven by global mobile titles (CS)
・ Expect the increase in sales and profits YoY in AM&TOY due to the increase in sales of prize products (AM)
External Environment
Consumer area
Strong ongoing growth expected in the global video games market
The global game content market continues to grow against the backdrop of rising download sales and the proliferation of game distribution platforms. Although the Amusement Machine Sales and Amusement Center Operations markets were hard hit by COVID-19, the prizes began to rally in 2021 and the market is recovering gradually.
Diversification of the way to interact with games and expansion of eco system
The acceleration of Digital Transformation (DX) and the emergence of new technologies such as 5G and cloud services have greatly influenced and shaped the entertainment industry. Traditionally, games and other kinds of entertainment-related content were distributed separately by device and by region in a form of package. Nowadays however, it is easier than ever for our products and services to reach users all over the world via digital distribution channels.
The way people interact with games is also becoming far more diverse than in the past. Game players are naturally at the center of the ecosystem. The broader ecosystem is also expanding, though, as games draw together many people on a global scale, to encompass not only game players but also, for example, streamers who broadcast their games and their viewers. These factors are also expected to fuel growth in the game population going forward.
Example of an ecosystem based on video game
Amusement Machine Area
| FY2014 | FY2021 | |
|---|---|---|
| Amusement machine sales | ¥161.1 billion | ¥152.0 billion |
| FY2014 | FY2021 | |
|---|---|---|
| Revenues from amusement center operations | ¥422.2 billion | ¥449.2 billion |
The Amusement Machine and Amusement Center Operations markets were in tough situation as they were hard hit by COVID-19, but they are in gradual recovery trend due to the strong performance of prizes since 2021. On the other hand, the impact of supply chain disruptions and raw material price hikes becomes apparent recently.
2. Pachislot and Pachinko Business
Business Plan
| FY2024/3 Results | FY2025/3 Forecast | |
|---|---|---|
| Net Sales | 133.2 | 105.0 |
| Operating Income | 41.6 | 23.0 |
| Ordinary Income | 41.9 | 23.5 |
| Adjusted EBITDA | 44.5 | 26.5 |
(Billion yen)
FY2024/3 Results
Significant increase in sales and profit from the
previous fiscal year
・Strong sales centered on pachislot
・ Moved the installation timing of some titles to the next fiscal year
・ Major titles sold:
Smart Pachislot Hokuto No Ken
P Hokuto No Ken Bokyosei, etc.
FY2025/3 Forecast
Expect the decrease in sales and profits YoY due to a reactionary decline centered on Pachislot
・Pachislot: Expect the reactionary decline from the strong sales of Smart Pachislot Hokuto No Ken in previous fiscal year
・Pachinko: Unit sales increase from the previous fiscal year due to the introduction of e Hokuto No Ken 10, our first smart pachinko, and other factors
External Environment
Along with the slow decline of the player population since 1995, there has been a long-term downtrend in the overall number of pachinko halls, as well as in the number of machines installed and in annual machine turnover. On the other hand, the opening of large pachinko halls and an increase in locations of major hall operators has caused a rise in the number of machines installed per pachinko hall.
Pachinko and Pachislot—Player Numbers and Market Size
Source: White Paper on Leisure Industry 2022, Japan Productivity Center
Pachinko and Pachislot Machines—Unit Sales and Market Size
Source: Yano Research Institute Ltd. “Pachinko Manufacturer Trends 2022” (Research of Japanese Market)
Annual Turnover* and Pachinko Hall Numbers
Source: Annual turnover is in-house calculation. Pachinko hall numbers are from the National Police Agency.
* Annual turnover = Annual unit sales ÷ Machine installations
Utilization Time*
Source: Daikoku Denki Co., Ltd., DK-SIS data
* Number of hours per business day that pachinko or pachislot machines are utilized
In the pachislot and pachinko industry, while the number of pachinko parlors is trending lower amid significant changes in regulatory and market environment, the size of pachinko parlors continues to become larger. As a result, the number of machines per parlor is growing. Removal of pachislot and pachinko machines comply with previous regulations was almost completed by the end of January 2022, as the market completed the migration to machines that comply with current regulation. In pachinko , a number of popular new pachinko machines that conply with new regulations were introduced and in pachislot, the relaxation of voluntary regulations continues intermittently. Concerns have emerged for rising raw materials prices due to the effects of factors such as the global chip shortage, logistics disruptions, and rising oil prices.
Given these circumstances, the Group must strive to maintain and grow its market share by developing and supplying products that offer innovative gameplay; meet market needs; and comply with regulations. Another management issues is the need to improve profitability in various ways, including promoting the standardization of pachislot and pachinko machine components, reducing costs through reuse of components and other measures, and more efficient development.
3.Gaming Business
| FY2024/3 Results | FY2025/3 Forecast | |
|---|---|---|
| Net Sales | - | 3.0 |
| Operating Income | - | -2.0 |
| Ordinary Income | - | -1.5 |
| Adjusted EBITDA | - | -1.5 |
(Billion yen)
New segment from FY2025/3