SEGA loses $31 million thanks to COVID-19 despite rising digital sales

Sega loses $31 million to covid
Updated:
13 Aug 2020

Sega forecasts expected continued loss of $159.9 million

In a fiscal report published by Sega Sammy, Sega revealed that they were feeling the full effects of the COVID-19 pandemic thanks to the strict social-distancing rules.

Although many people, especially in the west, know Sega best for their video game contributions such as the Sonic the Hedgehog, Sega Dreamcast, and Sega Genesis, Sega also has considerable investments in machine-based gambling as well.

One of Sega’s more prominent industries is the implementation of pachinko machines, which are wildly popular in Asia, especially in Japan. Since gambling is regulated in Japan, most of these machines are relegated to designated indoor parlors. But now that there are significant restrictions about how many people can be in a building, if at all, one of Sega’s major revenue streams has been effectively severed.

The report stated that net sales dropped by almost 34%, and instead of a profit, Sega had lost around $31 million.

However, it hasn’t been all bad for Sega, their digital gaming sales had seen a substantial uptick, also thanks to the virus according to them. If people can’t go out and are stuck at home, then they’ll look for new forms of entertainment. Video games don’t require people to exit their homes and can provide hours of entertainment.

Sega’s video game sales had doubled from the previous year, going from 6.49 million to almost 13 million – and total game revenue added up to $135.4 million. Most of these came from the Total War series, which, according to the report, had sold around 1,900,000 units.

Although Sega expects to suffer more losses before the pandemic’s end, they will now begin to shift their efforts more toward gaming, at least while social distancing guidelines are emplaced. They expect the games market to “revitalize and expand on a global scale.”

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