Sega Sammy attributes the decline to "turmoil in the global financial markets, mainly in Europe, and the economic slowdown of emerging nations." As a result, sales of amusement machines (pachinko, etc) slowed, as did the sale of packaged video games.
It's not all bad news, however, as Sega's consumer video game business is one of the few sectors of the company to see some growth. The division posted an operating loss of ¥780 million ($9.7 million), a dramatic improvement over the ¥6 billion loss ($74.7 million) posted during the same period last year. Part of this growth is attributed to strong Japanese sales of Hatsune Miku Project Diva F for the PlayStation Vita. Phantasy Star Online 2 has also done well, registering over a million players and exceeding Sega's in-game purchase forecasts.
Earlier this year, the company announced plans to restructure and streamline its consumer video game business, resulting in staff cuts in Europe and America and the closure of offices in Europe and Australia. Going forward, the publisher plans to focus on digital distribution and its core brands, including Sonic the Hedgehog, Total War, Football Manager and Aliens.