Slump in Japan upset for Sega

SEGA Enterprises, the Japanese video game company, warned yesterday of a weakening in its domestic market, writes Gail Counsell.

Announcing pre-tax profits almost doubled at 55bn yen (pounds 322m) for the year to the end of March on revenues two-thirds higher at Y347bn, the group said that European demand for its 8- and 16-bit computer game players remained firm with little sign of a slowdown. But it described demand in Japan as 'soft'.

Revenues rose from Y213.3bn to Y346.9bn. Exports were particularly strong, with the booming video game markets in Europe and the US pushing revenues 91 per cent higher to Y210bn.

But consumer sales in Japan, where the market is saturated, slipped 22.1 per cent to Y19bn. The company declared a dividend of Y18, against last year's Y15.

Sega is hoping to boost the market for its new generation of compact disc game-playing machines by cutting the price soon. As a result it expects a continuing rise in profits this year and is forecasting pre-tax profits of Y63.3bn on revenues of Y400bn.

Forecast capital spending is a hefty Y44.5bn, however, and the depreciation provision is set to rise to Y17bn from Y14bn last year.

View from City Road, page 30