Sega's six-month financial performance boosted by a 22% increase in gaming revenue

Sega has shared its financial performance for the period ending September 30, 2024, indicating a decline in overall sales compared to the previous year. However, the games segment delivered strong results, boosting the company’s entertainment division for the first half of fiscal year 2025.

Financial Details

• Net sales: ¥211.6 billion ($1.39 billion), a decrease of 4.5% from last year
• Entertainment Contents net sales (includes games): ¥141.7 billion ($931 million), up 16.4% from the previous year
• Games segment sales: ¥95.6 billion ($628 million), a growth of 22% year-on-year

Key Insights

Revenue in Sega's Entertainment Contents section flourished, with game sales exhibiting a 22% rise. This increase is attributed to higher-than-expected DLC sales and robust repeat sales, with "Unicorn Overlord" being notably successful. The consolidation of Rovio's sales also played a part in the revenue gains.

Exchange rate trends positively affected results, and cost improvements in Europe surpassed expectations. In contrast, the launch sales of new titles in the first quarter performed below projections.

Specifically, new titles generated ¥5.6 billion ($36.8 million) in the first half, down from ¥6.2 billion ($40.7 million) the year prior. Meanwhile, repeat sales stood at ¥22.1 billion ($145 million), rising from ¥17.1 billion ($112 million) in the same timeframe of the previous year.

Total sales from full games for this timeframe were ¥27.7 billion ($182 million), increasing from ¥23.4 billion ($154 million) the previous year. The company's free-to-play offerings performed as anticipated, with revenues of ¥23.1 billion ($152 million), compared to ¥26.9 billion ($177 million) in fiscal year 2024.

Looking forward, Sega projects overall annual sales to reach ¥445 billion, nearly $3 billion, marking a 5% reduction compared to the prior fiscal year. The games division specifically is anticipated to see revenues of ¥235 billion ($1.5 billion), roughly a 5% rise. New releases like "Metaphor: ReFantazio," "Sonic x Shadow Generations," and the rescheduled "Football Manager 25" are expected to influence outcomes. Additionally, the company foresees a boost in character licensing income related to Sonic's transmedia ventures.

Sega also announced the return of autonomy to Amplitude Studios, completing extensive structural adjustments within Sega Europe, which included halting Creative Assembly's "Hyenas," selling Relic, and executing significant job cuts in various UK studios.

Earlier this year, we explored these changes with Timo Rahkonene, the vice president of strategy at Rovio, marking one year since their €706 million acquisition by Sega.