Sega Sammy Announces Closures, Year-End Losses
The rough ride continues for Sega Sammy with the announcement of the closure of its Sega Korea and Sammy Europe subsidiaries, as well as the cancellation of a planned entertainment complex in Yokohama.
The company recently gave notice of the dissolution of its wholly-owned Korean and European subsidiaries as a result of "global business optimization." Sega Sammy reported the Sega Korea operation to have capital value of $5.3 million, while Sammy Europe comes in at $2.76 million. Specific dates for the closures have not yet been determined, but the company said in a statement that the shutdowns "will have no significant impact on the Company's consolidated operating results."
At the same time, Sega Sammy announced the cancellation of a planned arcade and entertainment complex planned for the central ward of the "Minato Mirai 21" development zone in Yokohama, the result of a decision to "focus its efforts on its core business to improve its performance promptly." The company has already spent $227 million on land purchases for the project, which was scheduled to break ground in fall 2008.
Sega Sammy also released its projections for its 2007 fiscal year, showing an expected loss of roughly $261 million. The company has fallen on hard times largely as the result of home videogame consoles, which have victimized Sega Sammy's arcade and pachinko operations. Earlier in the year, the company announced it would be closing over 100 arcades in Japan and cutting 400 jobs in the wake of mounting losses.