Skip to main content
  1. Home
  2. Gaming
  3. News

Sega returns to profitability thanks to London 2012, but its future in games is still in question

By
Image used with permission by copyright holder

Sega hasn’t had a good year. The company’s made some promising announcements for fans. Phantasy Star Online 2 will make it to the US early next year, Yakuza 5 is on track to bring some much needed modernity to the series, and classics like NiGHTS into dreams… and Jet Set Radio are getting new life through HD remakes. For Sega Sammy, Sega’s parent company, and its shareholders though, 2012 has been a year of bad news and tough decisions, that make for an uncertain future in the video game business. The company reported earnings for the April to June quarter on Tuesday, and while the company has seen a return to profitability, its future as a game publisher is still in flux.

Sega’s numbers are promising at first blush. Revenues totaled just under ¥70 billion, approximately $893 million, marking a more than 7 percent increase over the same period in 2011. Net profits came to ¥2.5 billion, around $32 million, whereas the game publisher posted a loss of close to that amount one year ago.

Recommended Videos

It’s retail releases that continue to hurt Sega. “Weakened demand” for retail games in the US and Europe are still cutting into Sega, with just above 1 million total disc and cartridge-based game sales over the period. London 2012: The Official Video Game of the Olympic Games led sales.

Related

Even with the Sega video game business seeing a boost, Sega Sammy’s Consumer Division that it’s a part of is still slumping. The division saw an operating loss of ¥1.5 billion, around $19 million, despite Sega’s profits.

So how did Sega turn a profit? Digital game sales are helping Sega survive, becoming such a significant part of the company’s business that Sega Sammy decided to open a new company, Sega Networks Ltd., to drive development in the digital market.

The real profit drivers were massive corporate restructuring and the cancellation of retail products. Sega announced in March that its last fiscal year was forcing it to boil its retail business down to only proven franchises like Sonic and Football Manager. Layoffs in the company’s North American and European offices, as well as hints that full operations like Sega France would be shut down, are helping Sega keep profits up enough to boost investor morale. Its games business is still sinking and there is no clear way for it to turn things around.

For old school Sega fans, go out and buy games like Binary Domain and Yakuza: Dead Souls. They are likely the last of their kind, the sort of big, strange Sega games that made the company’s reputation decades ago.

Editors' Recommendations

Anthony John Agnello
Anthony John Agnello
Former Digital Trends Contributor
Anthony John Agnello is a writer living in New York. He works as the Community Manager of Joystiq.com and his writing has…
Best PS5 SSD deals: Add more storage to your PS5 from $120
A 2TB WD Black

When the PlayStation 5 was originally released, it had the option to expand its internal memory, which was quite small at the time at a little under 900GBs. Of course, the issue is that there weren't any SSDs that worked on the new standard the PS5 was using, so even if you wanted to upgrade, you couldn't. Luckily, since then, there have been a lot of great SSDs for the PS5 that have been released, and upgrading its storage is pretty easy and can be done by pretty much anybody, provided they have a screwdriver. So, whether you picked up a PS5 from one of the PS5 deals or already have a PS5 and want to upgrade, be sure to check out the SSDs that will work great for your PS5 below. Then go fill up your new SSD with PS5 game deals.
Our favorite PS5 SSD deal

It wasn't that long ago that you'd have to pay well over $100 to get an SSD for your PS5, and often, it'd be slower than the pricier alternatives. These days, you can buy a Samsung 980 Pro 1TB SSD with heatsink for just $120 from Best Buy, thereby saving $45 off the regular price of $165. The SSD offers speedy performance while also having its own nickel-coated high-end controller to help deliver effective thermal control. It means it won't overheat and performance won't be compromised. Being a PCIe Gen 4 SSD, you get twice the data transfer speed of PCIe Gen 3 which is useful. Offering maximum read speeds of 7,000 megabytes per second, it's a good upgrade to go alongside your existing hard drive with 1TB offering plenty of extra space at a shrewd price.

Read more
Dead by Daylight is getting 3 spinoff games, and you can get one for free right now
Key art for The Casting of Frank Stone.

Behaviour Interactive is committed to growing Dead by Daylight as a franchise. That much is clear given that three spinoff games from the multiplayer horror hit were shown off during a live stream today. One of them is even out now.

All three games were shown during Dead by Daylight's 8th anniversary stream, where Behaviour Interactive also revealed the horror game's new 2v8 mode. In addition to the base game's new updates, the Dead by Daylight universe will expand with three games: Project T, The Casting of Frank Stone, and What the Fog.

Read more
Dead By Daylight’s next crossovers include Dungeons & Dragons and Castlevania
Vecna in Dead by Daylight.

Behaviour Interactive revealed some of the game-changing updates that are coming to Dead by Daylight this year. That includes a new 2v8 mode and crossovers with two iconic franchises.

As was teased last week, Dead by Daylight's next chapter will be Dungeons & Dragons-themed. It adds Vecna (the D&D version, not the Stranger Things one) as a killer and a Bard named Aestri Yazar as a new survivor. Vecna's abilities include the self-explanatory Fly, the spectral entity-summoning Flight of the Damned, the Pallet-blocking Mage Hand, and a survivor-revealing area-of-effect attack called Dispelling Sphere.

Read more