Sega Sammy returns to profit in H1, but Pachinko operations still in the red

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The figure represents a 22.4% increase on the corresponding period last year. The entertainment portion of the business generated JPY107.4bn, up 10.7% from last year. Pachislot and pachinko machines raised JPY23.0bn, while resort operations added JPY3.8bn.

Costs of sales came to JPY77.48bn, up 14.9% year-on-year and leaving gross profit at JPY57.42bn, up 32.6%.

Other expenses amounted to JPY42.74bn. Among these figures, combined content production expenses for all three divisions came to JPY15.7bn, advertising expenses were JPY4.7bn, and depreciation accounted for JPY1.8bn.

As a result, perating income for the company came to JPY14.7bn, up from a JPY3.1bn loss last year. The entertainment sector contributed JPY22.2bn of that total, while the resorts business, pachislot and pachinko machines and other sources lost a combined JPY7.6bn.

Non-operating income totaled JPY2.69bn, which were effectively cancelled out by non-operating expenses of JPY2.61bn. Pre-tax income came to JPY15.16bn, up from a JPY23.1bn loss last year. Losses from the novel coronavirus (Covid-19) decreased to JPY108m, after totalling JPY2.61bn in 2020.

Sega Sammy said the business was recovering, but was still far from full capacity: “With diversified revenue opportunities expected from new business models and services, there has been a growing interest in the revitalization and growth of the game market on a global scale.

“As for amusement machines, although the market has entered a recovery trend with a focus on prize category, facility operations have not yet reached a full-fledged recovery due to the impact from the spread of Covid-19.”

Sega Sammy had also been a part of the bidding process for an integrated resort in Yokohama, a process which has since been cancelled. The business had been part of a consortium led by resort operator Genting, which had been selected as the winning bid after beating out a Melco-led rival.

Other integrated resort bids in Japan have faced their own drama. In Nagasaki, Casinos Austria International was selected as the winning bidder, but only after Oshidori International Development, which had partnered with US-based Mohegan Sun announced its withdrawal from the bidding process.

Oshidori said it did not approve of the development and operation rules imposed by the prefecture and that the request for proposals process was not being implemented ethically or fairly.

Meanwhile, in Wakayama, a bid led by Clairvest was selected. However, last month, a number of anonymous documents emerged in Japan, arguing that William Weidner – president of Gaming Asset Management, which is advising Clairvest – is unsuitable to be involved with the bid due to conduct during his time as president of Las Vegas Sands.

The documents were addressed to Japan Casino Regulatory Commission, Wakayama Prefecture Government, Clairvest and its Wakayama arm Clairvest Neem Ventures. However, ICE365 has confirmed that three addressees did not receive them and did not get a response from JCRC.

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