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Sega business returns to profit but game losses continue

Packaged goods games business lost £20m for the quarter, but digital sales are 'picking up'

Battling publisher and amusements firm Sega Sammy returned to profit during the three-month business period between April and June, the company has announced.

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The Tokyo headquartered firm, which makes the majority of its money from pachinko arcade machines, brought in £567 million during the quarter - a result which landed above its own internal forecasts.

Overall profits hit £20.6 million; a significant jump on the £18 million loss it made in the same period the year prior.

However, the group recorded a seven per cent year-on-year revenue decline in the videogames segment. Games lost Sega about £12.5 million for the period ending June 30th.

The decline was nevertheless an improvement on the £31 million Sega games had lost in the same period last year.

Sega has undergone a sweeping restructure across Europe and the US in a bid to reduce the amount of money it spends on the games business. Its CEO, Mike Hayes, resigned from the company during the disruption.

"We will cut fixed costs and concentrate efforts on sales of strong titles that are expected to continue posting solid earnings," the company said in an investor note published today.

It added that digital sales were picking up. The smartphone game Kingdom Conquest was downloaded to more than three million devices by June.

Sega added: "Furthermore, Phantasy Star Online 2, the main title in the digital game software field for the current fiscal year, officially launched on July 4th and has been enjoying brisk sales".

The company expects to make about £3.8 billion throughout the financial year, with profit at £324 million. Sales will drop over the summer but will pick up in the winter.

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