Japan’s Sega Sammy Holdings reported a tripling of sales in its Gaming Business comparative to the prior year period to JPY1.8 billion (US$11.8 million) in the September quarter, driven by the strength of its “Railroad Riches” slot machine in the US.
“Railroad Riches”, the company explained, has been contributing to the strengthening of its relationship with casino operators as it looks to gain a foothold away from its traditional pachislot and pachinko segment. Sega Sammy said total unit sales across North America and Asia reached 478 in the quarter, up from 172 a year earlier, while leased units sat at 492 as of 30 September compared with 288 units in September 2023.
At Paradise City in Incheon, South Korea – the integrated resort of which Sega Sammy holds a 45% stake – equity method earnings reached JPY600 million (US$3.9 million) for the quarter with the company noting that casino sales have remained strong with the drop amounts of Japanese VIPs maintained at a high level and contributing to the group’s profit.
However, as merger and acquisition costs and foreign currency-based asset devaluation occurred due to the depreciation of Japanese yen, the company recorded a JPY 200 million (US$1.3 million) segment loss ordinary loss.
“Going forward, the Group will further promote sales of the video slot machine equipment … by continuing to introduce gaming equipment that will receive high evaluations from the market in North America and Asia, increasing the number of machines installed, developing new customers, and acquiring new licenses.
As for Paradise City, the drop amount by Japanese VIPs in August 2024 recorded the all-time high, and the company expects equity method accounting will continue [leading] to profits led by the casino sales mainly generated by highly maintained Japanese VIPs.”
Sega Sammy’s pachislot and pachinko business faced a more subdued market in the September quarter, with sales down 30% year-on-year to JPY64.7 billion (US$424 million) and Adjusted EBITDA almost halved to JPY23.2 billion (US$152 million) due to recent orders “trending weak”.
Group-wide, aided by strength in its entertainment contents business, Sega Sammy’s consolidated results for the September quarter saw sales down 4.5% to JPY211.6 billion (US$1.39 billion) and Adjusted EBITDA down 7.2% to JPY34.8 billion (US$228 million).
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