Sega Sammy Holdings has released its financial results for the first quarter of fiscal year 2026 (ending March 31, 2026), offering a nuanced look at the company’s performance across its diverse business segments. While the numbers reflect some short-term challenges, they also reveal strategic moves that could shape the company’s long-term trajectory.
The headline figures show net sales of approximately ¥81.0 billion, which translates to around $520 million USD. Despite a relatively quiet quarter in terms of new game releases, Sega Sammy managed to maintain stable revenue. However, the company posted an operating loss of ¥519 million (about $3.3 million USD), largely due to foreign exchange losses and restructuring costs. On a more positive note, adjusted EBITDA came in at ¥1.46 billion, or roughly $9.4 million USD, meeting expectations and indicating underlying business stability.
One of the most notable shifts came from the Pachislot and Pachinko Machines segment. After the blockbuster success of Smart Pachislot Hokuto No Ken in FY2025, the company experienced a reactionary decline in this category. Operating income for the segment dropped 16.8% year-over-year to ¥48.1 billion, or approximately $309 million USD. This cyclical dip was anticipated, but it still weighed heavily on the overall earnings picture.
In contrast, the Entertainment Contents division—which includes consumer gaming and animation—delivered strong results. These segments helped offset losses from the Pachinko business and reaffirmed Sega’s strength in digital entertainment and IP monetization. The company’s continued investment in animation and mobile platforms appears to be paying off, especially as global audiences engage with Sega’s legacy franchises in new formats.
Key Financial Highlights (USD Equivalent)
| Metric | Q1 FY2026 (JPY) | Approx. USD Equivalent |
|---|---|---|
| Net Sales | ¥81.0 billion | ~$520 million |
| Operating Income | ¥-519 million (loss) | ~$-3.3 million |
| Adjusted EBITDA | ¥1.46 billion | ~$9.4 million |
- Net Sales held steady despite a limited release slate.
- Operating Loss was narrower than expected, signaling cost discipline.
- Adjusted EBITDA met expectations, showing underlying business stability despite foreign exchange losses.
Pachislot & Pachinko Machines
- Revenue dropped due to a reactionary decline following the FY2025 success of Smart Pachislot Hokuto No Ken.
- Operating income for the segment fell 16.8% YoY to ¥48.1 billion, or approximately $309 million.
Entertainment Contents (Consumer & Animation)
- Strong performance in Consumer and Animation helped offset losses in the Pachinko segment.
- This underscores Sega’s strength in digital gaming and media IP monetization.
Resort Business
- Sega Sammy recorded extraordinary income from the sale of shares in PHOENIX RESORT, contributing to a 36.3% YoY increase in profit attributable to owners of parent, totaling ¥45.0 billion, or about $289 million.
Strategic Restructuring & Global Moves
- Losses were recorded due to the restructuring of European studios, part of a broader global realignment.
- These moves reflect Sega Sammy’s intent to streamline operations and focus on high-performing regions and IPs.
Ordinary Income & Non-Operating Expenses
- Ordinary income declined 11.1% YoY to ¥53.1 billion, or roughly $341 million, due to:
- Foreign exchange losses
- Interest expenses
- Equity gains from affiliates like PARADISE SEGA SAMMY
Looking at the broader earnings history:
- FY2024 earnings were $0.29 billion USD, down 22.07% from FY2023
- The company has shown volatility over the past decade, but recent years suggest a more stable and strategic trajectory.
The Resort Business also contributed positively to the quarter’s results. Sega Sammy recorded extraordinary income from the sale of shares in PHOENIX RESORT, which led to a 36.3% year-over-year increase in profit attributable to owners of parent. This figure reached ¥45.0 billion, or about $289 million USD, and reflects the company’s strategic approach to asset management and portfolio optimization.
However, not all news was positive. Ordinary income declined 11.1% year-over-year to ¥53.1 billion, or roughly $341 million USD. This drop was attributed to foreign exchange losses, interest expenses, and equity gains from affiliates such as PARADISE SEGA SAMMY. Additionally, the company incurred losses related to the restructuring of its European studios—a move that signals a broader global realignment aimed at streamlining operations and focusing on high-performing regions and IPs.
Looking at the broader context, Sega Sammy’s earnings history shows a pattern of volatility, especially in its gaming and amusement segments. FY2024 earnings were $290 million USD, down 22.07% from FY2023. Despite these fluctuations, recent years suggest a more stable and strategic trajectory, with the company increasingly leaning into its strengths in consumer entertainment and global IP development.
So what does this all mean for Sega Sammy moving forward? The Q1 FY2026 results reflect a company in transition—balancing short-term losses with long-term planning. The decline in Pachinko performance was expected, but the strength of the consumer and animation segments offers a promising counterbalance. Strategic restructuring and asset sales point to a leaner, more focused organization that’s preparing for future growth.
As we look ahead, key areas to watch include upcoming game releases and their impact on consumer revenue, further restructuring moves in overseas markets, and continued efforts to monetize legacy IPs across animation, mobile, and digital platforms. Sega Sammy may be navigating a complex landscape, but its commitment to innovation and strategic clarity suggests that the best is yet to come.
