Entertainment
Impairment losses from Rovio and Stakelogic push company to reduce free-to-play priority and focus on full game development
Sega Sammy has released its financial results for the year ending March 31, 2026. While net sales increased by 13.6%, operating income from its entertainment contents, including the video games division, declined from ¥40.8 billion ($259 million) to ¥32.4 billion ($205.5 million).
The decline was primarily driven by a $200 million impairment loss for Rovio in the third quarter. Sega’s business development efforts did not progress as planned, resulting in profitability falling short of forecasts.
Sega reported an overall net loss of ¥5.7 billion ($31.6 million), reflecting impairment losses from Rovio and from Stakelogic, the online slots and live casino game company acquired in 2024.
The numbers:
For the 12 months ended March 31, 2026
- Net sales: ¥487.5 billion ($3.09 billion, up 13.6% year-on-year)
- Operating income: ¥47.1 billion ($299 million, down 2% year-on-year)
- Ordinary income: ¥54.2 billion ($344 million, up 2% year-on-year)
The highlights
Sega stated its entertainment contents division had a “soft” performance for the fiscal year, with sales increasing 1.5% to ¥326.6 billion ($2.07 billion).
Full game sales fell 12% to ¥67.2 billion ($426 million), despite new releases such as Sonic Racing: CrossWorlds and Football Manager 26.
Sega attributed the decline in overall and full-game sales to underperformance by certain titles, weaker results from existing mainstays, and delays in launching new Rovio titles.
Revenue from free-to-play titles increased 14% to ¥53.7 billion ($341.1 million). New releases included Persona 5: The Phantom X and Sonic Rumble Party.
However, the company noted that Sonic Rumble Party underperformed and did not generate economic value through its collaboration with Rovio.
Sega announced the cancellation of its ‘Super Game’ project, described as an “online AAA global hit.” The company confirmed there were no additional costs associated with the cancellation.
It announced this project back in 2021, and said it would consider investing nearly $1 billion on internal development resources and acquisitions to achieve its ambition of creating a “major global title”.
Sega will now focus on medium- and long-term growth, reducing the priority of free-to-play games. More than 100 developers from this segment have been reassigned to full game development to support mainstay IPs.
Sega clarified that Rovio will continue to support its overall games-as-a-service strategy, but will prioritise its “own restructuring first.”
GamesIndustry.biz recently spoke with Angry Birds creative director Ben Mattes about Rovio’s progress since its acquisition by Sega in 2023.
“They know that we’re a transmedia company,” said Mattes. “They know that we’re a mobile-first company. They know that they’ve had successes with Sonic. They know that they want to grow their mobile expertise.
“So of course from day zero, the ambition has been to make Angry Birds every bit as big as Sonic is from a transmedia point of view, and grow not just the Rovio mobile free-to-play business, but all of Sega’s mobile and free-to-play expertise and live-ops expertise across its portfolio.”
Looking ahead, Sega aims to achieve growth in FY27 by launching new full game titles from its flagship IPs, while strengthening sales capabilities through improved sales structures and renewed promotional activities.
Sega also plans to expand its transmedia offerings by licensing its IPs and promoting film adaptations, including Sonic and Angry Birds.
The company forecasts a 4.6% increase in sales to ¥510 billion ($3.2 billion) for the next financial year, with operating income expected to decrease 5.6% to ¥44.5 billion ($282.4 million).
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Sophie McEvoy