Sega used to make its own console. Now, it barely even makes console games.

For the first three quarters of its fiscal year, which ended Dec. 31, Sega Sammy Holdings generated $2.9 billion in revenue. That’s up 47 percent year-over-year. That helped the company earn an operating income of $430 million, which is up from only $2.93 million over the same period of 2012.

A lot of that money came from business sectors that have little to do with retail console games.

Sega’s best-performing division was its casino-gaming wing, which makes pachinko and pachislot machines. It brought in around $157 million in revenue through Sega’s nine-month reporting period, which is up 115 percent year-over-year. This business generated $49 million in operating income, which is up 540 percent compared to 2012, and this represents the company’s largest growth.

That doesn’t mean Sega’s video gaming business was a bust. Combined, PC, mobile, and console gaming generated $715 million in revenue. That is up 20 percent from 2012, but the consumer division only reported an operating income of $27 million. While that’s not as impressive as Sega’s pachinko products, it is up more than 436 percent over the same period in the prior fiscal year.

That increase, however, wasn’t due to traditional products like retail Sonic games.

“In the consumer (gaming) business, although the group launched multiple titles including Football Manager 2014 and Sonic Lost World in the packaged game-software field, sales were low due to the harsh market environment,” reads Sega’s financial report. “As a result, a year-on-year decline in total volume of package software sales to 6.3 million copies.”

That number includes only 2.29 million physical copies sold in the U.S., 3.06 million in Europe, and 960,000 sold in Japan.

It was really the PC and digital business that is showing much more promise for Sega.

“In the field of digital game software for mobile phones, smartphones, and PC downloading, performance remained favorable for the online RPG Phantasy Star Online 2 as well as titles for smartphones,” reads the report.


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