Sega, a prominent player in the gaming industry known for creating Sonic and owning franchises like Persona and Like a Dragon, faced challenges in its recent financial quarter.

Despite the success of Persona and Like a Dragon, three of their latest releases—Sonic Superstars, Endless Dungeon, and Total War: Pharaoh—experienced disappointing sales.

Weak Sales Report

As per IGN’s report on Sega’s financial update, these three titles had “weak” sales during the crucial holiday season, ending on December 31. The company expressed concern about the sluggish sales, especially in the consumer market.

Sega reported losses linked to inventory reduction due to the poor sales conditions, with both sales and ordinary income falling below earlier forecasts.

The company acknowledged that market expansion in Europe and the United States faced stagnation due to economic challenges caused by inflation and other factors.

Rising Game Development Costs

Sega highlighted the continuous rise in game development costs, stressing the need to adapt to changes in the business environment urgently.

Despite these challenges, Sega remains optimistic about the growth potential in the video game market, emphasizing the global service delivery environment.

Title-Specific Issues

Sonic Superstars faced tough competition in a crowded month of AAA releases, notably impacted by the success of Super Mario Bros. Wonder. Total War: Pharaoh encountered issues, leading developers to apologize and offer refunds.

Financial Figures

According to Eurogamer, Sega reported an ordinary income drop of 52.5% year-on-year to 19.7 million yen. Sales reached 219.3 million yen, a 4.2% increase attributed partly to the acquisition of Angry Birds creators.

Positive Turn in 2024

Despite the recent setbacks, Sega turned the tide in 2024 with successful releases. Like a Dragon: Infinite Wealth set records for the franchise, with unprecedented concurrent players on Steam and over a million units sold.

Persona 3 Reload, available on Xbox Game Pass, also achieved remarkable sales, becoming the fastest Atlus game to reach one million copies sold.

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