AM Press: Sega and Sammy's November 2004 shows

November 15, 2004 issue
Last updated on November 8, 2004

Special news

Sega and Sammy jointly held a private show and performed songs such as “Sangokushi Taisen.”

In Sony's interim financial results, the game division posted an operating deficit due to a significant decline in revenue.

Overseas

A federal district court in the United States has issued a temporary restraining order against copying console-type TV games.

Two US commercial sales veterans have transferred to Ultracade.

Domestic

Banpresto made a significant recovery in its interim results, and Atlas also returned to profitability.

Earnings forecasts for companies such as Aruze and Adores have been significantly revised downward.

News digest of November 15, 2004 issue

The photo was taken at Sega/Sammy's private show (Tokyo venue). The photo above (from left) is Sega's Managing Director Yoshiharu Suzuki, Eight Leisure Bussan's President Norihiro Tomita, Managing Director Takeo Yamai, and Sega's Senior Executive Officer Keiji Mori. The photo below appears to be explaining Sega's “Sangokushi Taisen.”

Main news from 10 years ago

The Seoul District Court in South Korea has issued a judgment ordering two companies that manufactured and sold copy boards for Capcom's “Final Fight” to pay damages. The American company TWI held the “T-Mek” tour in the United States and the United Kingdom. Sega has established SMN, a mail-order karaoke sales subsidiary. AOU held a thank-you party for the two honorary advisors. Kaneko Seisakusho moved its headquarters to Mitaka. (November 15, 1994 issue)

Main news from 20 years ago

At the US AMOA Expo, a TV game machine with floating seats attracted attention in place of the LD game machine. Konami absorbed Interlogic and started Konami USA in Chicago. Milestar's flipper business in the US was purchased by a new company, Premier Technology. It was officially decided that the new entertainment business law would go into effect in February 1985. (November 15, 1984 issue)

Copyright ©Amusement Press Inc. 2004 · Game Machine, Amusement Press, and Amusement Communication are registered trademarks. It is illegal to reprint articles in this newspaper without permission or otherwise infringe on Amusement News Agency's intellectual property rights.

[News Digest]

1. Sega and Sammy held a private show in Tokyo on November 2nd, where they showcased Sega's network card action game “Sangokushi Taisen.” "Sangokushi Taisen", which is scheduled to ship next spring, uses Chihiro on the system board and a cabinet using a flat reader to read card information placed by players. It is an all-net compatible system where ability values ​​gradually increase as the game progresses. Other TV games introduced by Sega include the upgraded version of “Outrun 2 Special Tour”, the previously shown “Sega Golf Club Network Pro Tour”, the Cycraft version of “Initial D Arcade Stage ver. ``Rondo of Rotating Light” captivated visitors with its unprecedented movement and beautiful screen. Sammy introduced SNK Playmore's “Neo Geo Colosseum”, “Kenju”, and “Net Select Horse Racing” for Atomiswave. It was held in Osaka on the 4th and in Fukuoka on the 9th.

2. On October 29, a federal court in Seattle issued a temporary order banning the import and sale of “Super Joy,” “Super Joystick,” “Power Joy,” and “Power Player,” which were sold at shopping malls around the country and contained home-use NES (US version of Famicom) games. These products are manufactured in China, and are unique in that they contain unauthorized copies of dozens of TV games inside a console that looks exactly like the control panel of the Nintendo 64, and the console itself also functions as a control panel. The built-in games are now classic masterpieces, such as “Donkey Kong,” and it is said that the introduction of these games into the control panel has ushered in a new era of unauthorized copying. The temporary order was issued as part of a lawsuit filed by Nintendo of the United States against the two importers and distributors, seeking a ban on sales and compensation for damages. The preliminary restraining order is under review.

3. On October 28th, Sony announced its second quarter (July-September period) and September interim financial results based on US standards.In the "games" division, which handles home video games, sales in the second quarter decreased by 25.8% year-on-year to 1.1% compared to the same period last year. 9.6 billion yen, with an operating loss of 11 million yen (compared to a profit of 2.2 billion yen in the same period last year).In the interim period, sales decreased by 21.5% to 225 billion yen and an operating loss of 2.9 billion yen (compared to a profit of 3.9 billion yen in the same period last year). The hardware (main units) shipped in the second quarter was 1.99 million units of PS2, 6.79 million units less than the same period last year, and 600,000 units of PSOne, 360,000 units less than the same period last year.This is a significant decrease, but this is due to intentionally suppressing shipments ahead of the transition to the new PS2. Game software sales for the same period increased by 12 million more copies for the PS2, at 56 million copies, and for the PS2, 7 million fewer copies, at 3 million copies, resulting in an increase in sales for the PS2. Furthermore, as the production of PS2 was shifted to outsourced production in China, intersegment transactions in the electronics and game fields decreased significantly. In addition, the inventories of the semiconductor manufacturing business, which were previously included in the game field, are now recorded in the electronics field.

4. On November 4th, Banpresto announced its September interim consolidated financial results, showing a steady recovery in sales, with sales increasing 22.2% year on year to 17,023 million yen, ordinary income increasing 264.8% to 1,472 million yen, and interim profit increasing 579.1% to 658 million yen. The company took over the Asakusa Hanayashiki business in August, but the transfer of the game hall management business to Pleasure Cast has been postponed from October to December. By division, sales in the amusement sector (sales of equipment, prizes, game hall and amusement park management) increased by 10.1% to 8,812 million yen, and operating income increased by 11.7% to 607 million yen. Sales of home game software increased by 44.4% to 4,830 million yen, operating income increased by 306.5% to 968 million yen, other sales increased by 22.9% to 3,939 million yen, and operating income was 21 million yen (compared to a deficit of 69 million yen in the same period last year).

5. Atlas announced its September interim consolidated financial results on November 5th, with sales increasing 13.7% year-on-year to 8,274 million yen, ordinary income 245 million yen, and interim profit 87 million yen, returning to the black. By division, sales of commercial products such as photo sticker machines decreased by 17.6% to 1,950 million yen, and operating income was 16 million yen (in the red in the same period of the previous year), resulting in a return to surplus.In household products, sales increased by 71.9% to 2,756 million yen, with operating income of 242 million yen. Sales increased by 10,000 yen (same year) and the company returned to the black. In game hall management, sales increased by 6.2% to 3,515 million yen, and operating income decreased by 48.8% to 220 million yen, resulting in a significant decrease in profits despite the increase in sales. The new business, gaming machines, had sales of 51 million yen and an operating loss of 3 million yen. The game hall opened the Yamato store in August and closed the Noda store. In the second half of the year, we plan to open Takasaki, Kofu, and Isawa stores. The company recorded an extraordinary profit of 312 million yen due to gains on the sale of investment securities and reversal of allowance for doubtful accounts, and an extraordinary loss of 448 million yen due to write-downs and disposal losses of household inventory, and losses on retirement of fixed assets at unprofitable stores.

6. Taito announced on November 1 that it has received permission from American PC game software maker Valve Software for Half-Life 2, and plans to ship it for commercial use next summer. “Half-Life” is a first-person shooting (FPS) game released by Valve Software in 1998, in which players shoot each other while moving.It received high praise for its 3D images and highly complete scenario, and became a hit in the series, selling over 10 million copies.The sequel “Half-Life 2” is also being released as a PC game. Taito has decided to transfer the latter to commercial use with the system board “Type It also features a single-player ``Street Mode” and a multi-player “Battle Mode.” In the battle mode, you connect to Taito's dedicated server using the Internet, utilize Taito's “Net Entry System” (NESYS), and play the game with multiple friends. Taito is poised to expand sales of this game not only in Japan but also around the world.

7. On October 28, Aruze significantly revised down its earnings forecasts for the September interim period and the fiscal year ending March 2005, announcing that it would be in the red for the interim period but remain in the black for the full year. Interim consolidated sales have been revised to 36 billion yen, 37% lower than the previous forecast in August, ordinary income and loss have been revised to a deficit of 1.3 billion yen, and final loss to 6.7 billion yen. According to the company's explanation, sales plummeted as all of the new pachislot machines it developed were not approved and the pachinko machines it launched fell far short of plan.Although there was an extraordinary profit of 4.7 billion yen from the deemed sale of shares of U.S. company Winresort, the company is forecast to post an extraordinary loss of 13.8 billion yen, including a 10.4 billion yen write-down on parts and inventory for pachislot machines, resulting in an interim deficit. However, since we plan to release three pachislot and pachinko machines from October onwards, and we have solid sales forecasts, we are still optimistic that the full-year forecast will pick up a bit, with consolidated sales at 104 billion yen, 46% below the previous forecast, ordinary income at 13.2 billion yen, 71% below, and final profit at 400 million yen, 98% below.

8. Aruze's subsidiaries Adores and Seta also announced significant downward revisions on October 29th. Adores' September interim results are expected to be 9.8 billion yen in sales, 13% below the previous forecast in May, 680 million yen in ordinary income, 49% below, and 100 million yen in interim profit, 81% below. This is due to delays in the opening of four new stores, and a decrease in customer numbers due to the effects of typhoons and intense heat. The full-year earnings forecast has not been revised. Seta's September interim consolidated results are now expected to be in the red, with sales of 900 million yen, 47% lower than the previous forecast in May, ordinary loss of 133 million yen, and final loss of 177 million yen. For the full year, sales are expected to fall by 45% to 3.6 billion yen, ordinary profit to fall by 76% to 312 million yen, and final profit to fall by 82% to 232 million yen. Seta explained that this was due to the fact that sales of the pachinko IC card system "PC4" shipped in March of this year were significantly lower than planned due to a review of the sales system, and the company also recorded a 35 million yen inventory valuation loss on arcade game boards as an extraordinary loss.

9. On November 2, Round One revised downward its earnings forecasts for the September interim period and the fiscal year ending March 2005. This was due to slower-than-expected sales growth at existing stores due to the strong performance of the past two years, as well as the effects of the intense heat, typhoons, and the Athens Olympics. For the interim period, sales have been revised downward by approximately 16.5 billion yen, which is approximately 500 million yen lower than the previous forecast in May, ordinary income is approximately 3.9 billion yen, which is approximately 600 million yen lower than the previous forecast, and interim profit is revised downward by approximately 300 million yen to approximately 2.3 billion yen. Although the pace of store openings will be increased, the company has also downwardly revised its full-year forecasts for sales by 1.8 billion yen to approximately 35.8 billion yen, ordinary income by 1.3 billion yen to approximately 9 billion yen, and final profit by approximately 800 million yen to approximately 5.1 billion yen. The company predicts that bowling alleys will start to recover around spring 2005, but game halls will not recover until around summer 2005.

10. In October, San Jose-based Ultracade Technology Inc. added commercial sales veterans Elaine Shirley and Lou Rudolph as sales directors. This is because the company's “Taito Arcade Classics” and “Feeding Frenzy” have been popular, and the company needs to strengthen its sales staff. Shirley has approximately 30 years of sales experience at Atari Inc. commercial/Atari Games Inc., and will become vice president of sales at Ultracade. Mr. Rudolph, who has been in charge of sales for Merit, Dynamo, and Global VR for about 30 years, will be in charge of international sales at Ultracade. Meanwhile, at Global VR, Brad Nelson, from an investment company that is a major shareholder, has been appointed as president, and former Atari Games president Dunvan Elderren has been appointed as an advisor. Mr. Eldalen joined Atari in 1973 and was in charge of the company's commercial development, and from 1995 became the last president of Atari Games, but retired in 2003 and recently started helping out as a consultant at Global VR.

◎ Since 1974, the industry magazine "Game Machine" has been reporting industry news on commercial amusement machines, including TV game machines, amusement facilities, etc. twice a month, but the print publication was discontinued at the end of June 2002.