Sega has recently announced a hefty cut to their revenue and profit predictions after reviewing their recent business records. For the year ending on March 31st, 2016, revenue predictions are down from ¥420 billion ($3.4 billion) to ¥355 billion, a decrease of ¥65 billion ($528 million). As well, their expected profit prediction is now only ¥2 billion ($16.2 million), a 90% decrease from ¥19 billion ($154.3 million) that Sega was expecting to make.
The issue, as Sega explained, was two-fold. The first issue lies in a tightening in rules and restrictions on Pachinko and Pachislot machines, Sega’s largest profit makers. Sega stated that “demand for new pachinko machines is expected to become weak in line with the application of the voluntary agreement on measures to prevent players from becoming too immersed in playing, which were decided by Nikkoso.”
Sega now expects to sell 154,000 units before the end of the fiscal year, compared to its previous forecast of 265,00 units. Pachinko machine sales, meanwhile, are now expected to reach 203,000 units for the year, compared to an earlier projection of 220,000.
Sega’s revised predictions also lie with game production. Video game competition in Japan is “intensifying,” states Sega.
Higher-quality content is expected, thus resulting in a trend of longer development lead times,” the company explained. “Sega also has titles whose launches were postponed from the initial schedule and titles that did not fulfill our expectations in terms of market reception.
The new Sonic Boom: Fire and Ice for the 3DS was recently delayed until 2016 due to this increased development time.
In the grand scheme of things, while the downside is that you won’t be playing the game this year, the upside is that what you’ll play next year, and what fans will continue to play for years after they pick up the game, will be a stronger, more enjoyable experience.