Feeds

Sega to turn ¥1.5bn profit to ¥22.1bn loss

Fiscal year won't be a good one after all

  • alert
  • submit to reddit

Secure remote control for conventional and virtual desktops

The day after its main rival's biggest product roll-out, a sorry Sega conceded today that 2000 will go down in its books as its fourth loss-making year in succession.

The company had previously said it will finally get back into the black this year.

Dreamcast maker Sega said it will lose ¥22.1 billion ($204.2 million) for the full year to March 2001 - a significant change on the ¥1.5 billion profit it said it was looking forward to.

The change comes for reasons not dissimilar to Sony's own explanations for financial problems. Sony's quarterly profits were this week found to be well down on expectations thanks to stellar losses at its games - ie. PlayStation - division, brought about by the fabulous cost of marketing and developing the next-generation console.

Sega's troubles, likewise, come from console marketing: it take costs of ¥18.5 billion on the chin after cutting the price of Dreamcast in the US and Europe over the summer in a desperate - though not unsuccessful - bid to ramp up sales ahead of the PlayStation 2 launch.

Last year, Sega lost ¥42.88 billion, so at least the company is moving in the right direction. Sales of Dreamcast consoles have increased since the price-cuts, but probably not sufficiently to dent the loss. And, for the full year, sales will be down on Sega's early expectations too. The company now expects annual sales of ¥320 billion, down from its previous estimate of ¥336 billion.

Sega at least has its online gaming service SegaNet, cannily targeted at PC users as well as Dreamcast owners, to fall back on, as the company attempts to target revenue streams beyond its traditional hardware focus. License fees from games will help a little too, but it's hard to see Sega reaching its former glories. Its traditional rival, Nintendo, is at least fighting back with its upcoming GameCube console, but with PlayStation 2 and Microsoft's X-box as competition, it is going to have a tough time. That leaves little hope in the console arena for a much diminished Sega. ®

Related Stories

PlayStation plunders Sony profits
Price cut sends Dreamcast sales through roof
PlayStation anticipation casts shadow on games sales
Sega unwraps SegaNet
Dreamcast bundled with DVD to take on Playstation 2
Sega Dreamcast sales shrink
Sega offers Dreamcast users second rebate

Website security in corporate America

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
JINGS! Microsoft Bing called Scots indyref RIGHT!
Redmond sporran metrics get one in the ten ring
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Murdoch to Europe: Inflict MORE PAIN on Google, please
'Platform for piracy' must be punished, or it'll kill us in FIVE YEARS
Bono: Apple will sort out monetising music where the labels failed
Remastered so hard it would be difficult or impossible to master it again
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Sony says year's losses will be FOUR TIMES DEEPER than thought
Losses of more than $2 BILLION loom over troubled Japanese corp
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.