Sega's revenues have decreased by 8%, reaching $2.1 billion
Sega Sammy released its financial results for the period ending December 31, 2024, revealing that Football Manager 2025 has been scrapped.
The game, produced by Sports Interactive, faced a delay last October due to challenges in meeting the anticipated quality for a March release, prompting Sega's decision.
Overall, Sega encountered a drop in net sales and profits. Nonetheless, its Entertainment Contents division saw an 88% surge in profits, partly credited to the success of Sonic the Hedgehog 3.
Financial Figures:
For the nine months ending December 31, 2024
- Net sales: ¥322.3 billion ($2.1 billion, an 8.1% decline from the previous year)
- Operating income: ¥43.7 billion ($287.9 million, a 20.8% drop from the previous year)
- Ordinary income: ¥49.4 billion ($325.4 million, a 13.9% decrease from the previous year)
Key Developments:
Sega partly attributed its reduced net sales and operating income to the sale of Amplitude Studios, an overseas developer, in November 2024, which resulted in a ¥6.1 billion ($40 million) loss following a management buyout.
However, Sega's Entertainment Contents sector performed well, with net sales rising by 8.2% to ¥238.6 billion ($1.5 billion) and profits growing by 88% to ¥37.5 billion ($246.9 million).
During this period, two major games were launched: Metaphor: ReFantazio on October 11, 2024, and Sonic X Shadow Generations on October 22.
Metaphor: ReFantazio surpassed expectations, while Sonic X Shadow Generations achieved over two million units in global sales.
In Q3, Sega decided to cancel Football Manager 2025, previously set for a March release, resulting in a "loss associated with a write-down of inventory assets."
This decision was made because despite efforts to advance the series substantially, ensuring the required product quality by March was deemed challenging.
Development resources from Football Manager 2025 will be redirected to a future installment.
Additionally, Sega's animation division thrived following the December 20, 2024, release of Sonic the Hedgehog 3.
The film has generated $460 million globally, ranking as the second-highest-earning video game movie ever.
Sega views the Sonic media franchise as a crucial part of its transmedia strategy, discussed last year with global transmedia head, Justin Scarpone.
Reflecting these outcomes, Sega has adjusted its Entertainment Contents segment forecast. The estimated FY net sales, originally ¥335 billion ($2.2 billion), have been revised to ¥320 billion ($2.1 billion).
In the Entertainment Contents consumer division, net sales were ¥164.8 billion ($1.08 billion), with operating income at ¥34.6 billion ($227 million).
Sales of new games in the concluding nine months of 2024 totaled 4.7 million units, down from 5.2 million in the prior year. Catalogue title sales increased to 20 million from 13.8 million, with full game sales rising to 24.8 million units from 19.1 million.
Looking forward, Sega revised its FY25 outlook, now anticipating ¥445 billion ($2.9 billion) in net sales, up from a previous projection of ¥425 billion ($2.8 billion), and operating income expected to be ¥46 billion ($303.1 million) instead of ¥45 billion ($296.5 million).