Sega Profits Halved

A digital representation of ‘increased advertising expenditure’.

Normally, when a company posts a profit, it’s cause for celebration. However, when a company posts profits significantly less than the previous year, it becomes a point of investigation. Guess which camp Sega falls into. With a net profit of ¥5.5 billion ($53.4 million/£31.7 million) for the April-June quarter, Sega have suffered a rather dramatic year-on-year decrease of 57%, down from $125 million/£74 million. This rather large downturn comes despite a net sales rise of 13.3% (up to $207 million/£123 million), mainly based on a strong showing for Phantasy Star Online 2 in Asian markets. Sega themselves attribute the loss to an ‘increase in advertising expenses’ and sales of packaged games becoming ‘soft’. It should be noted that no key titles appeared globally during this period, only a handful of iOS games. Thus, the April-June quarter seems to have suffered from all the costs associated with building the hype-train for Sonic Boom and Alien: Isolation, without actually being able to cash-in on two of 2014’s most anticipated titles. Hopefully, with the heavy hitters due at the crease, Sega’s bottom line can start improving for the second half of 2014.

[Source: Gamespot]