The new gaming business segment of Japan’s Sega Sammy Holdings showed positive signs in its first year of operations, generating sales of JPY5.4 billion (US$36.4 million) and Adjusted EBITDA of JPY1.0 billion (US$6.7 million) for the year ended 31 March 2025.
However, it was a different story for the pachinko and pachislot segment where sales fell 27% year-on-year to JPY97.1 billion (US$654 million) and Adjusted EBITDA by 46% year-on-year to JPY24.2 billion (US$163 million).
Those woes in pachislot and pachinko ultimately saw group-wide sales fall by 8.5% year-on-year to JPY428.9 billion (US$2.89 billion) despite locking in some year-on-year growth in its core entertainment contents, or computer gaming, business. Group-wide Adjusted EBITDA grew by almost 14% to JPY62.2 billion (US$419 million) thanks to extraordinary income generated by the sale of shares in its non-gaming Japan resort Phoenix Resort.
Sega Sammy said in its FY25 results release that the decline in pachinko and pachislot was due to a decline following a previous post-COVID rebound. It also pointed to its decision to postpone the release of key titles until the next fiscal year and beyond to enhance product quality in recognition of changing user preferences.
Sega Sammy’s gaming segment, comprising slot machine supplier Sega Sammy Creation, its 45% stake in South Korean integrated resort Paradise City and the development of an online gaming platform, was developed in May 2024 and has included the recent acquisitions of B2B software provider GAN Ltd and iGaming content developer Stakelogic.
The company said Monday that this new gaming segment had since its creation 10 months ago seen an increase of sales, with ordinary income turning positive.
“In the gaming device area, ‘Railroad Riches’ – a new video slot machine … which was introduced for the US market in January 2024 – recorded high utilization and sales were favorable due to its high reputation in the market,” Sega Sammy explained.
“In Paradise City in South Korea, the casino maintained a high level of drop (purchased amount of chips by customers at the table) led by Japanese VIP customers, and the hotel also performed well, maintaining high occupancy rates and room rates due to the continued increase in demand in South Korea.
“As a result, in the year of 2024, [Paradise City] recorded the highest sales and operating income since its opening, and with recording the deferred tax assets, its equity gains of affiliates contributed and exceeded the company’s expectation.”
Sega Sammy is forecasting further growth in sales in its gaming segment to around JPY6.0 billion in FY26 although it noted in its FY25 results announcement that there could be some minor impact from the US tariffs, specifically relating to the sale of slot machines.
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