Sega has cut its annual profit forecast by more than a third, citing the underperformance of its Pachislot and Pachinko machine business in the "present severe market environment".
For the fiscal year ending March 31, 2014, the Japanese firm reduced its revenue forecast from 485 billion yen to 377 billion yen (£2.2b). It also cut its net income forecast from 47 billion yen to 30 billion yen (£177m), and its operating income forecast from 73 billion yen to 37 billion yen (£218m).
While Sega noted that sales in the packaged games business were "sluggish", it said sales in the digital games segment were "robust". Online RPG Phantasy Star Online 2 and mobile applications Puyopuyo!! Quest and Chain Chronicle were singled out as solid performers.
It said: "The company aims to increase income by improving the earnings mix through shifting the management resources in the Amusement Machine Sales, Amusement Center Operations and the Packaged Games Businesses to the Digital Games Business which continues high growth."