SEGA-Sammy Details News
Chris Leyton
19/05/2004
Information on the proposed acquisition and resulting company suggests SEGA-Sammy will focus on the amusement market…
Further details of Sammyâs acquisition of SEGA were today sent to us, raising concern over SEGAâs future within the home market.
As of October 1st 2004, SEGA-Sammy Holdings Inc. will be established by both companies, subject to approvals at their individual shareholdersâ meetings (Sammy June 25th SEGA June 29th), with the intention of full integration and the formation of new subsidiaries by March 2007.
The acquisition report claims that both Sammy and SEGA have minimal overlap and competition with each otherâs business and that both are expected to achieve complementary results, harmonising Sammyâs âhigh growth potential and profitabilityâ with SEGAâs âglobally renowned brand nameâ.
As Pachinko-related businesses for Sammy and amusement machine sales and amusement arcade operation business for SEGA (arcade exclusively???) continue to become major revenue sources, SEGA-Sammy propose to continue to strengthen the company through reducing costs and enhancing earnings through efficient management of resources including employees, products, capital and intelligence by restructuring and reorganising overlapping businesses with small revenues such as Sammyâs amusement-related business.
Specific plans expected to drive the synergy between both companies in the mid-term include:
- Maintaining the top position in the Pachinko market by applying SEGAâs technology to Sammyâs Pachinko business, in order to improve the quality of imaging technology (visuals) and sound development, thereby enhancing the entertainment aspects of Sammyâs Pachinko machines.
- Enhance earnings in the arcade operation business by integrating the R&D capabilities and creativity of both companies, in order to strategically develop multi-complex facilities such as large commercial locations and theme parks.
- Enhance earnings through the consumer business by streamlining management through restructuring and integrating the consumer business, and effectively utilising content from the Pachinko related business in addition to actively penetrating underdeveloped overseas markets.
- Establish Sammyâs âAtomiswaveâ arcade videogame machine as the leading low-cost and high quality videogame format, by enhancing content through the utilisation of SEGAâs R&D capabilities, in addition to expanding the market with on-line games through networked arcade units.
Essentially this highlights Satomiâs intention of focussing SEGAâs skills in the arcade market to push Sammy overseas, and makes very little reference to SEGAâs home consumer business; one thing that does arise in SEGAâs principle business is the âdevelopment, manufacturing and sales of consumer productsâ suggesting that we may see more from SEGA then just a third-party publisher and arcade manufacturer.
As previously reported Hajime Satomi will become Chairman and President of SEGA-Sammy, whilst former SEGA President Hisao Oguchi will assume the position of Vice Chairman and Director.
Naturally the news comes of some concern to loyal SEGA fanatics, who see the deal promoting Sammyâs business at the cost of SEGAâs expertise, whilst a number of high profile resignations in recent months have left some worrying question marks over the future of home titles from the Japanese publisher.
One thing is for certain however is that Sammy have become the biggest manufacturer of Pachinko boards and a highly profitable company through efficient management; certainly seeing SEGA in a stronger position should guarantee their future and could possibly hint at immediate results coming faster then if SEGA were to continue doing it alone â“ weâre not saying a return to the home console market, however you certainly canât rule anything out at this stage.