Sega's Loss Widens to $421 Million as Profit Outlook Brightens22 May, 2001 By: Hive News
Sega Corp.'s loss widened to $421 million for the fiscalyear ending in March, largely because of huge, one-time costs of dropping the Dreamcast game machine.
The Japanese game maker said Tuesday it expects to post its first profit in five years this year.
Sega's loss amounted to $51.7 million for the year ended March 31 and surpassed its loss a year ago of 2.9 billion yen. Sales plunged 28% to 242.9 billion yen ($2 billion) from 339 billion yen the previous year.
Sega decided earlier this year to stop making the Dreamcast machine after the console took a beating in global sales to rival SonyPlayStation 2, especially during Christmas shopping in the United States.
Sega took a one-time charge of 81.1 billion yen ($660 million) for Dreamcast, including losses sustained getting rid of inventory. Sega is hoping to revive itself by shifting its business to making game software for other consoles, including the PlayStation.
Sega expects to post a group net profit of 2.1 billion yen ($17.1 million) for the fiscal year ending March 2002 on sales of 189 billionyen ($1.5 billion). That would snap a four-year streak of losses.
In addition to providing games for Microsoft's Xbox andNintendo Co.'s GameCube consoles, Sega also hopes to continue providing games for personal computers and for mobile devices like the Net-linking i-mode cellphone service, which has become a big hit in Japan.