Sega Sammy Holdings
Encyclopedia
is a Japanese holding company
formed from a merger of Sega
and Sammy
. They were both very involved in the arcade
business (Sega with games, Sammy with Pachinko
), and Sega's main fame comes from their console systems.
In 2005, Sammy Golf Entertainment Inc. was renamed Sega Sammy Golf Entertainment Inc.
On March 7, 2005, Sammy Studios, Inc. broke away
from Sammy and renamed itself High Moon Studios
.
On February 29, 2008, Sammy Europe, Ltd. broke away from Sega Sammy Holdings Inc.
On March 31, 2008, Sega Korea, Ltd. broke away from Sega Sammy Holdings Inc.
Although previous to the merger Sammy produced games itself and even had a small chain of arcade operations that business was integrated into Sega.
The most important segment of the company is Sammy's Pachinko
/ Pachislot segment. In the past 80% of profits was generated in the Pachislot business. The companies former flagship Hokuto No Ken is estimated to be produced 630,000 times. However, a change in regulations lead to deemphasizing the gambling aspect of Pachislot and allowed for more flexibility in the creation of Pachinko machines so that starting in 2007 the Japanese Pachislot market decreased from approcimately 2,000,000 annually sold machines to 800,000 in 2009. Although the Pachinko
market did not grow in unit terms better machines appeared and prices increased ca. 25%. Sammy managed to rebuild its traditionally weak Pachinko
segment with its September 2008 release of CR Hokuto No Ken, one of the best selling Pachinko
machines of the last couple of years and further strengthened the segment by the acquisition of Taiyo Elec. Sales targets for the business year ending in March 2010 are 450,000 Pachinko
and 180,000 Pachislot machines. Currently the segment is returning to profitability after successfully shifting from Pachislot to Pachinko
as only now scaling effects and savings from recycling parts are starting to be felt at the bottom line.
Sega's Amusement Machines segment may have much less earnings and much lower profitability than the Sammy owned segments. But it surely is the best segment in Sega from an investors point of view as the profitability is still much higher than that of the general market. Having nearly no competition the segment has much lower earnings volatility than the Pachinko
/ Pachislot segment so that one could think of it as a hidden gem in Sega / Sammy.
The Amusement Facilities segment is the segment having the lowest return on capital as the operation of arcades is very capital intensive. Sega is closing and reopening facilities on an ongoing basis using a scrap and rebuild strategy. However, in the past year several hundred loss-making facilities were disposed of. Though a bad segment from the investors point of view millions of visitors are enjoying Sega's arcades each year and surely the Amusement Machines segment could not make its huge profits without those facilities.
Sega's Consumer Business segment is producing and distributing games for consoles and pc. The financial year 2010 plan is calling for sales of approximately 30 million games. While the segment is not earning money it is not in that bad of a situation as the low profitability can be traced back to the industry in which the segment is operating.
Holding company
A holding company is a company or firm that owns other companies' outstanding stock. It usually refers to a company which does not produce goods or services itself; rather, its purpose is to own shares of other companies. Holding companies allow the reduction of risk for the owners and can allow...
formed from a merger of Sega
Sega
, usually styled as SEGA, is a multinational video game software developer and an arcade software and hardware development company headquartered in Ōta, Tokyo, Japan, with various offices around the world...
and Sammy
Sammy Corporation
was established on November 1, 1975 and is a leading developer and retailer of pachinko and pachislot systems in Japan.In 2001, Sammy Corporation created a subsidiary Sammy Entertainment, Inc. It would later change its name to Sammy Studios in 2002. Sammy Studios is responsible for developing and...
. They were both very involved in the arcade
Arcade game
An arcade game is a coin-operated entertainment machine, usually installed in public businesses such as restaurants, bars, and amusement arcades. Most arcade games are video games, pinball machines, electro-mechanical games, redemption games, and merchandisers...
business (Sega with games, Sammy with Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
), and Sega's main fame comes from their console systems.
Background
In 2004, Sammy acquired noted game company Sega under a new company called Sega Sammy Holdings Inc.In 2005, Sammy Golf Entertainment Inc. was renamed Sega Sammy Golf Entertainment Inc.
On March 7, 2005, Sammy Studios, Inc. broke away
Spin out
A spin-out, also known as a spin-off or a starburst, refers to a type of corporate action where a company "splits off" sections of itself as a separate business....
from Sammy and renamed itself High Moon Studios
High Moon Studios
High Moon Studios is an American video game developer, that used to be a part of Sierra Entertainment. After a period as independent studio, the developer was acquired by Vivendi Games in January 2006 and retained the current name...
.
On February 29, 2008, Sammy Europe, Ltd. broke away from Sega Sammy Holdings Inc.
On March 31, 2008, Sega Korea, Ltd. broke away from Sega Sammy Holdings Inc.
Operations
Sega Sammy operations take place in four distinctive segments- Pachinko / Pachislot (Sammy)
- Amusement Machines (Sega)
- Amusement Facilities (Sega)
- Consumer Business (Sega)
Although previous to the merger Sammy produced games itself and even had a small chain of arcade operations that business was integrated into Sega.
The most important segment of the company is Sammy's Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
/ Pachislot segment. In the past 80% of profits was generated in the Pachislot business. The companies former flagship Hokuto No Ken is estimated to be produced 630,000 times. However, a change in regulations lead to deemphasizing the gambling aspect of Pachislot and allowed for more flexibility in the creation of Pachinko machines so that starting in 2007 the Japanese Pachislot market decreased from approcimately 2,000,000 annually sold machines to 800,000 in 2009. Although the Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
market did not grow in unit terms better machines appeared and prices increased ca. 25%. Sammy managed to rebuild its traditionally weak Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
segment with its September 2008 release of CR Hokuto No Ken, one of the best selling Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
machines of the last couple of years and further strengthened the segment by the acquisition of Taiyo Elec. Sales targets for the business year ending in March 2010 are 450,000 Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
and 180,000 Pachislot machines. Currently the segment is returning to profitability after successfully shifting from Pachislot to Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
as only now scaling effects and savings from recycling parts are starting to be felt at the bottom line.
Sega's Amusement Machines segment may have much less earnings and much lower profitability than the Sammy owned segments. But it surely is the best segment in Sega from an investors point of view as the profitability is still much higher than that of the general market. Having nearly no competition the segment has much lower earnings volatility than the Pachinko
Pachinko
is a type of game originating in Japan, and used as both a form of recreational arcade game and much more frequently as a gambling device, filling a niche in gambling in Japan comparable to that of the slot machine in Western gambling. A pachinko machine resembles a vertical pinball machine, but...
/ Pachislot segment so that one could think of it as a hidden gem in Sega / Sammy.
The Amusement Facilities segment is the segment having the lowest return on capital as the operation of arcades is very capital intensive. Sega is closing and reopening facilities on an ongoing basis using a scrap and rebuild strategy. However, in the past year several hundred loss-making facilities were disposed of. Though a bad segment from the investors point of view millions of visitors are enjoying Sega's arcades each year and surely the Amusement Machines segment could not make its huge profits without those facilities.
Sega's Consumer Business segment is producing and distributing games for consoles and pc. The financial year 2010 plan is calling for sales of approximately 30 million games. While the segment is not earning money it is not in that bad of a situation as the low profitability can be traced back to the industry in which the segment is operating.
Affiliated companies
- Sega Sammy Holdings Inc.
- Sega Sammy Investment & Partners Inc.
- Sega Sammy Golf Entertainment Inc.
- Sammy Amusement Service Co., Ltd.
- Sammy CorporationSammy Corporationwas established on November 1, 1975 and is a leading developer and retailer of pachinko and pachislot systems in Japan.In 2001, Sammy Corporation created a subsidiary Sammy Entertainment, Inc. It would later change its name to Sammy Studios in 2002. Sammy Studios is responsible for developing and...
- Sammy Design Co., Ltd.
- Sammy Holding Co., Inc.
- Sammy NetWorks Co.,Ltd.
- Sammy USA Corporation
- Sammy Retail Service Inc.
- Sammy Systems Corporation
- Sammy Corporation
- Sega CorporationSega, usually styled as SEGA, is a multinational video game software developer and an arcade software and hardware development company headquartered in Ōta, Tokyo, Japan, with various offices around the world...
- Sega GameWorks L.L.C.
- Sega Entertainment USA, Inc
- Sega of America, Inc.
- Sega Europe Ltd.
- Sega Australia Ltd.
- Sega Retail Service Inc.
- Sega Ecole Inc.
- Sega Bering Inc.
- Sega Toys Ltd.
- Sega Publishing Korea, Ltd.
- Sega Amusement Service Co., Ltd.
- Sega Logistics Service Co., Ltd.
- Sega Music Network Co, Ltd.
- Sega Holdings USA., Inc.
- Sega Amusements USA., Inc.
- Sega Amusement Works, LLC.
- Sega Publishing America, inc.
- Sega Holdings Europe Ltd.
- Sega Amusements Europe Ltd.
- Sega Benelux B.V.
- Sega France S.A.S.
- Sega Germany G.m.b.H
- Sega Publishing Europe Ltd.
- Sega (Shanghai) Software Co., Ltd.
- Sega Shanghai Co., Ltd.
- Sega Amusements Taiwan Ltd.
- Sega Bee Link Co., Ltd.
- Sega Heungsan Co, Ltd.
- Shanghai New World Sega Recreation Co., Ltd
- Sega Toys (Hk) Co., Ltd.
- Wave Master Inc.Wave MasterWave Master Inc. is a research and development team for Sega, focusing on the soundtracks for various games...
- TMS Entertainment, Ltd.Tokyo Movie Shinsha, formerly known as , is a Japanese animation studio, founded on October 1946. One of the oldest and most prominent anime studios in Japan, it has also produced numerous animated series airing in other countries such as France, the United States, and Italy. The company currently uses "TMS...
- TMS Music Co., Ltd.
- TMS Music (Uk) Ltd.
- TMS Music (Hk) Ltd.
- AG Square, Ltd.
- Algeria Corporation
- APANDA Inc.
- Dart Slive Co., Ltd.
- Dimps CorporationDimpsis an Osaka, Japan-based video game development studio with an additional office in Tokyo, Japan. Employing a staff of 218 people, it is known for developing such games as the Dragon Ball Z: Budokai trilogy for the PlayStation 2, and the Sonic the Hedgehog games specific to the Game Boy Advance and...
- Ginza Corporation
- Ginzahanbai Corporation
- IT Communications Co., Ltd.
- IP4 Inc.
- E-address Co., Ltd.
- Oasis Park Co., Ltd.
- Japan Multimedia Services Corporation
- Japan Setup Services Co., Ltd.
- Marza Animation Planet, IncMarza Animation Planetis a Japanese based CGI animation studio dedicated to making feature, full length films. Their extensive resume also include CGI Add-in's for television series and video games...
- Media-Trust Co., Ltd.
- Nissho Inter Life Co.,Ltd.
- Red Entertainment Co., Ltd.
- Realus Inc.
- RemArt Co., Ltd.
- RODEO Co., Ltd.
- RTzen, Inc.
- Shuko Electronics Co., Ltd.
- Siege Cinema Co., Ltd.
- Taiyo Elec Co., Ltd.
- Taiyo Co., Ltd.
- Telecom Animation Film Co., Ltd.
- Toms Photo Co., Ltd.
- Underground Liberation Force Inc.