Sega announces a net loss of $31.6 million for fiscal year 2026 and discontinues the 'Super Game' project as part of a strategic shift
Sega Sammy's fiscal report for the year that concluded on March 31, 2026, shows a rise in net sales by 13.6%, despite a drop in operating profits in its entertainment division, which includes video games. The operating income for this sector decreased from ¥40.8 billion ($259 million) to ¥32.4 billion ($205.5 million).
This reduction was largely attributed to a $200 million impairment loss for Rovio during the third quarter. Business development didn't progress as expected, leading to lower-than-forecasted profits.
The company posted a net loss amounting to ¥5.7 billion ($31.6 million), a result of impairment losses related to Rovio and Stakelogic, a company dealing in online slots and live casino games that Sega acquired in 2024.
Financial Overview:
For the fiscal year ending March 31, 2026
- Net Sales: ¥487.5 billion ($3.09 billion, a 13.6% increase compared to the previous year)
- Operating Income: ¥47.1 billion ($299 million, a 2% decrease year-on-year)
- Ordinary Income: ¥54.2 billion ($344 million, a 2% increase year-on-year)
Significant Insights
The entertainment contents division experienced a "soft" performance, with sales climbing 1.5% to ¥326.6 billion ($2.07 billion). Meanwhile, complete game sales dropped 12% to ¥67.2 billion ($426 million), even with new game launches like Sonic Racing: CrossWorlds and Football Manager 26.
The company pinpointed several factors for these declines, including disappointing results from certain games, weaker performances from existing franchises, and delays in launching new Rovio titles.
The revenue for free-to-play games rose 14% to ¥53.7 billion ($341.1 million) with titles like Persona 5: The Phantom X and Sonic Rumble Party entering the market. However, Sonic Rumble Party did not meet expectations and yielded limited economic returns in its partnership with Rovio.
Sega has canceled its 'Super Game' project, initially aimed at creating an "online AAA global hit." No extra costs accompanied this cancellation. Originally announced in 2021, Sega had intended to allocate nearly $1 billion for internal development and acquisitions to achieve this ambitious project.
Going forward, Sega plans to focus more on long-term and medium-term growth strategies, de-emphasizing free-to-play games. Over 100 developers from that segment will now work on full game development to bolster mainstay intellectual properties.
The strategy for Rovio remains intact as part of Sega's overall games-as-a-service plan, but Rovio's focus will shift toward its internal priorities first.
GamesIndustry.biz had a discussion with Angry Birds' creative director Ben Mattes about Rovio's progress following its 2023 acquisition by Sega.
Mattes highlighted that Sega is aware of Rovio's strengths as a transmedia and mobile-first company and aims to develop Angry Birds' reach to match Sonic's, while enhancing mobile and free-to-play expertise across Sega's offerings.
In the upcoming fiscal year, Sega plans to grow by releasing new full game titles from its core franchises and enhancing sales and promotional capabilities. There are also plans to broaden transmedia ventures by licensing its IPs and promoting films like Sonic and Angry Birds adaptations.
The company predicts a 4.6% rise in sales to ¥510 billion ($3.2 billion) for the next financial year but anticipates a 5.6% drop in operating income to ¥44.5 billion ($282.4 million).
A previous version of the text incorrectly stated Rovio was "restructuring"; it has been revised to "rebuilding" per the original Japanese materials.