'Game over' for Sega after Sammy merger
Friday, February 14, 2003 at 09:20 JST
TOKYO ?Sega Corp and Sammy Corp said Thursday they will integrate
operations by Oct 1, essentially bringing up the "game over" screen for
Sega which once boasted a global presence as one of the three biggest
video-game makers along with Nintendo Co and Sony Corp.
Sega and Sammy, a major producer of pachinko slot machines, said they are
aiming to eventually create an internationally competitive entertainment
But industry analysts said the deal is effectively a bailout of Sega which
has suffered from dwindling sales of game software and its withdrawal from
the household game console market in 2001 as its Dreamcast lost out to
heavyweight products from Nintendo and Sony.
The two companies said they plan to decide on details of the business
integration by the end of March, including a possible merger.
If the two decide to merge, the president of the new company is expected to
be Sammy President Hajime Satomi, a Sega official said.
The merger allows Sammy to absorb Sega's technological prowess in
developing game software to boost business in commercial-use amusement
equipment, an arena it recently entered.
"With the merger, we will be able to raise our presence in the world
market," Satomi told a joint press conference with Sega President Hideki
The two executives said the companies began considering the integration
Sega also said it has revised downward its earnings forecast for the year
to March 31 mainly due to worse-than-expected software sales for home video
games especially in the United States.
It expects a group net profit of 500 million yen, down from the 5 billion
yen projected Nov 20, on group sales of 195 billion yen, down from the
earlier projected 200 billion yen.
Sega also expects a consolidated pretax profit of 6 billion yen, down from
the earlier projected 9 billion yen.
Sammy posted a net profit of 23.9 billion yen in fiscal 2001 on sales of
164.2 billion yen. (Kyodo News)