Sega Sammy Sees Increased Q1 Revenue Amid Expansion in Gaming Unit Following Acquisitions

Sega Sammy Holdings Inc. recorded net sales of approximately JPY95.03 billion ($599.9 million) for the three months to June 30, increasing by 17.3% year on year. The company is the holding company of Sega Sammy Creation Inc., which supplies gaming equipment, and Paradise City casino resort in South Korea. The net profit for the quarter stood at nearly JPY2.17 billion, reversing the net loss of nearly JPY3.39 billion last year.

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EBITDA And Profit Improve At Group Level

The adjusted EBITDA for the quarter was close to JPY7.85 billion, as opposed to JPY1.46 billion a year ago. According to the firm, whose other lines include the manufacturing of pachinko and pachislot machines in addition to home entertainment items, the better figures were due to improved performance even with the expanded losses in the gaming division.

For the April to June period, the company’s gaming business net sales rose 491.5% year-on-year to JPY8.03 billion. However, the segment recorded an ordinary loss of nearly JPY1.80 billion, versus income of JPY180 million a year earlier. Quarterly adjusted EBITDA in the gaming segment was negative by JPY946 million, compared with a positive figure of JPY102 million a year ago.

The parent noted that the inclusion of operating results from GAN Ltd and Stakelogic BV, which were acquired in the fiscal year ended March 31, 2026, drove the increase in net sales but also widened the operating loss.

Gaming Machine Sales And Paradise City Performance

In the reporting quarter, sales of gaming machines showed steady performance, leading to a start that slightly exceeded expectations. The firm added that sales of key titles such as Railroad Riches and Super Burst continued to grow.

Group quarterly gaming machine unit sales in North America and Asia combined rose 81.7% year-on-year to 476 units. The company said casino sales at Paradise City, a resort with a foreigner-only casino at Incheon near the South Korean capital, showed steady performance, driven by Japanese VIP and mass market customers.

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Although equity in earnings of affiliates decreased from the same period in the prior year due to factors such as one-time start-up expenses related to the newly-opened hotel and a decrease in tax refunds, the investment still contributed to profit in line with expectations. The hotel referred to was a tower near Paradise City, which had been acquired in January by its partner Paradise Co Ltd to provide extra accommodation capacity for the resort’s clients.

Plans For GAN And Stakelogic

Sega Sammy Holdings gave additional commentary on plans for its recently-acquired businesses in the gaming segment. At GAN and Stakelogic, a business revitalisation programme is being promoted. As a key initiative for GAN, migration to the new platform V2, which serves as the foundation for business growth, will proceed with the aim of improving business efficiency and expanding the business.

Regarding Stakelogic, the group said it will withdraw from unprofitable businesses and streamline the product lineup, while promoting the adaptation of proven gaming machine IPs for online offerings to establish a new revenue base. The EUR125 million, or US$144.5 million, Stakelogic deal was concluded in April last year. The acquisition of GAN was announced in November 2023 and was said at the time to involve an aggregate amount of US$107.6 million. It was clinched in the first half of last year.

Full-Year Outlook Set

For the 12 months to March 31, 2027, Sega Sammy Holdings expects to achieve net sales of JPY510.00 billion and annual net profit of JPY32.50 billion.

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Source: GGR Asia