Sonic X Shadow Generations Sales and Sonic 3 Movie Propel Sega Sammy Q3 2024/25 Earnings

Sega Sammy Holdings has released its financial results for the third quarter of the fiscal year 2024/25, offering a comprehensive look at the company's performance up to December 31, 2024.

This period reveals a complex picture for the well-known developer and publisher, with both significant successes and notable challenges across its Entertainment sector, free-to-play portfolio, and film adaptations. Overall, Sega Sammy reported that net sales decreased by 8.1% year-on-year, totaling ¥322.3 billion.

At the same time, operating profit fell by 20.8% and recurring profit dropped by 13.9%.

This downward trend is largely attributed to a notable reduction in free-to-play game revenue, which dipped to ¥34.7 billion compared to ¥40.1 billion in the same period of the previous fiscal year.

Additionally, the divestment of Amplitude Studios in November 2024 contributed to restructuring within the company's portfolio.

The French development studio reestablished itself as an independent entity following a management buyout, marking a significant transition for both parties. Sega Sammy also faced setbacks in its release pipeline, including the cancellation of 'Football Manager 2025,' which has led the company to further revise its business outlook for the rest of the fiscal year.

Despite these headwinds, there are substantial bright spots.

The company reported that 'Sonic X Shadow Generations' has surpassed 2 million units sold worldwide as of December 31, 2024, showcasing strong demand on platforms such as the Nintendo Switch and others.

Additionally, the cinematic release of 'Sonic the Hedgehog 3' has been a runaway success, becoming the second highest-grossing video game movie of all time and amassing a global box office total of $460 million. Another high-performance title comes from Sega subsidiary Atlus: although the game 'Metaphor: ReFantazio' is not currently available on Nintendo Switch, it too has exceeded the publisher’s expectations based on early sales metrics. Reflecting on these mixed results, Sega Sammy has updated its full-year projection, adjusting net sales expectations down to ¥425 billion—a 4.5% reduction from the original forecast of ¥445 billion.

Forecasted net profit has also been revised to ¥37.5 billion from the previously anticipated ¥39 billion.

However, the company maintains a positive outlook for a rebound in both operating and recurring profit by the close of the fiscal year in March 2025. Looking ahead, Sega is preparing for an active fourth quarter with anticipated releases such as 'Virtua Fighter R.E.V.O' and 'Like a Dragon: Pirate Yakuza in Hawaii.' Moreover, a new Sonic racing title is expected sometime later in the year, and industry watchers look towards the anticipated Switch 2 hardware platform, on which Sega may have further plans. Sega Sammy’s Q3 2024/25 results illustrate the company’s adaptive strategies amid industry fluctuations, bolstered by the enduring popularity of the Sonic franchise in both gaming and entertainment markets.

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