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Report: Former Index president arrested for fraud
Masami Ochiai, former president and CEO of Atlus parent company Index Corporation, has been arrested by Japanese authorities who claim Ochiai fraudulently boosted Index's financial records prior to its sale to Sega Sammy Holdings last year. News of the arrest comes from Japanese business periodical Nikkei (via a Gematsu translation), which claims that the 4 billion yen profit shown on Index's records of the third fiscal quarter of 2012 doesn't actually exist. Investigators believe Ochiai fraudulently reported business transactions that never occurred in order to avoid the removal of Index from JASDAQ (the Japanese analogue to the American NASDAQ stock exchange). Unfortunately for Index, even that profit (the first Index had shown in six years), couldn't save the company from bankruptcy, and it was while sorting out that mess that authorities picked up on Ochiai's reported attempts to make his company look a few million yen better than it otherwise would have. Though Ochiai claims that he has "not been engaging in fraud," investigators plan to delve deeply into Index's financial records under the belief that Ochiai wasn't alone in his deception, and that these financial hijinks were systematically plotted out by Index management. [Image: Sega]
Sega slashes profit forecasts by 36 percent
Sega announced an adjustment to its earnings forecast for the fiscal year ending March 31, cutting its expected net income by 36.2 percent. The company adjusted its projected net income to be 30 billion yen ($293.5 million), down from its previously-reported amount, 47 billion yen ($459.8 million). Additionally, it expects its net sales to be 377 billion yen ($3.69 billion), a 22.3 percent decrease from its original projection of 485 billion yen ($4.75 billion). Sega cited a decline in its pachislot and pachinko machine business for the change in projections. The company cut its pachislot machine sales projection by 171,000 units and its pachinko machine sales projection by 304,700 units for the fiscal year. The biggest cut comes to Sega's projected operating income: a 49.3 percent slide from 73 billion yen ($714.2 million) to 37 billion yen ($362 million). Should Sega meet its new projections, it would amount to a year-on-year increase in net sales and operating income by 17.3 percent and 94 percent, respectively, but would also represent a 10.3 percent decrease in net income. [Image: Sega]
Sega Sammy sees losses in gaming sector, StarHorse3 sales continue unabated
Sega Sammy Holdings is a ginormous company; one that, on the whole, is doing pretty well for itself, having ended the first quarter of fiscal 2013 in the black to the tune of ¥2.544 billion -- a massive increase over the ¥2.224 billion loss the company reported last year. When broken down by section, however, Sega Sammy's "Consumer Business" segment didn't fare as well as the company's pachinko/pachislot and amusement center-oriented segments.The Consumer Business division, the part of the company responsible for console and handheld gaming, posted an operating loss of ¥1.559 billion for the three month period ending on June 30, but that's actually up 59 percent from the ¥3.856 billion loss reported for the same period last year. Consumer Business shipped a total of 1.3 million units during Q1, with more units shipping to Europe (700,000) than to the US, Japan and elsewhere combined (400,000 and 230,000 respectively).Honestly, we think it'd do wonders for Sega Sammy's bottom line if they'd start selling the convertible horse racing loveseats they make for "StarHorse3 Season Ⅰ A NEW LEGEND BEGINS" (above) on their own, or license out the design to movie theaters.
Sega canceling games, cutting jobs in US and Europe to restructure [update: SOA statement]
Sega's forecasts for the fiscal year ending March 31 have been adjusted down -- expected net income is down 47.4% -- and Sega Sammy's board of directors have enacted a drastic plan to reduce operating costs in the future.Sadly, this plan involves the "streamlining" of Sega's operations in the US and Europe, to "create a smaller company positioned for sustained profitability." There is currently no word on how many jobs are being cut, or where, to create this smaller company.The plan also includes a narrowing of Sega's lineup, to focus on franchises that the company expects to sell in the US and Europe, including Sonic, Football Manager, Total War, and Aliens. That refocusing means some games have been canceled, though specific titles were not announced.Sega's "extraordinary loss" (caused in part by costs from this restructuring) will see the company's expected profits drop from 38 billion yen ($462 million) to 20 billion yen ($243 million,) with sales revenue dipping about a half-billion dollars. The cancellation of these projects and this reform is estimated to have a 7.1 billion yen ($86.5 million) price tag.Update: After the break, find Sega of America's full statement.
Sega signs distro deal with Atlus parent company Index Holdings
Index Holdings, parent company of developer and publisher Atlus, is looking to take advantage of Sega's significantly larger distribution network in Japan, announcing intentions to partner with the Japanese publisher for future distribution. The deal kicks off in April 2012 and will see games across Atlus' various properties distributed under the Sega moniker in Japan.The deal doesn't apply to digitally distributed titles, and it's unclear if this will affect Atlus' distribution in other parts of the world. It seems that the distribution deal arises from Index Holdings' consistently declining revenues and an inability to support Atlus' growth in its most important market. We've reached out to Atlus for further comment.
Sega Sammy posts profitable third quarter, Vanquish moves 820K
Sega Sammy's financial results for the nine months ending December 31, 2010 showed marked upswings in overall sales and profit for the company. While the majority of money came through its pachinko and amusement arm, game publishing saw ¥67.4 billion ($826 million) in revenue and ¥2.8 billion ($34.3 million) in profit -- both notable increases since the company's last check-in. Hidden among the many, many financial numbers was news that Platinum Games' fourth effort, Vanquish, had sold 820,000 copies since its release in late October, while Sonic Colors had moved a whopping 1,850,000 by the end of 2010. That's alotta hedgehog! The majority of the company's overall sales took place in Europe (owing to sales of Football Manager 2011), with the US following closely behind and Japan in a distant third.
