In particular, the situation has become quite severe in Japan and Europe, and somewhat so in America. The first reason was the worsening economic environment. “The hardship that I mentioned is that Sega had to revise downward its expected performance. However, as Sega is quite a tough company, I can also announce that we have achieved a great success. I must unfortunately announce that Sega has suffered hardship this past year. “I’d like to begin with a review of 1993. In a speech made by Sega president Hayao Nakayama on Janu( translated here), Nakayama said: Instead of growing during the holiday season, Sega’s consumer export revenue for the second half of FY1994 was just 62% of the first half (H1: ¥130 billion, H2: ¥80 billion). Here is a graph of Sega’s consumer export revenue (the revenue it made from exports of game hardware and software): In the second half of 1993, Sega’s revenue in the North American and European markets suffered a massive decline. Sega was on target to surpass their annual goal of ¥400 billion, but then disaster struck. The first half alone showed revenue of over ¥200 billion. Things were looking even better for FY1994.
AMUSEMENT PARK TYCOON SEGA GENESIS SOFTWARE
In order to do that, we have to enrich our software lineup and create more big hits.”Īs seen in the above graph, the goal of ¥320 billion was surpassed for FY1993-Sega’s revenue for FY1993 was ¥347 billion. However, the first step to reach that will be to dominate the worldwide 16-bit market. This is a bit above our practical target, but I believe that it is entirely possible with Sega’s current position. The goal this year will be ¥320 billion with a profit of ¥50 billion. Just about the only other company to show that kind of sudden growth is Nintendo, another game company.”Īt Sega’s annual planning meeting in April 1992, Nakayama announced the following to a company-wide gathering of 2800 employees: “Beginning this year, we’re going to implement a five-year plan to become a ¥600 billion revenue business. And that was in the middle of a recession.
To go from a ¥100 billion business to a ¥200 billion business requires a lot of time for a normal company. Sega crossed it in a flash,” Nakayama explained. Sega’s long-time president Hayao Nakayama, speaking in 1992 as quoted in the book Game Sensou by Eiji Ohshita, described the situation: “It’s often said that revenue of ¥100 billion represents a major barrier to cross. In fiscal year 1992 (the year Sonic the Hedgehog was released on the Genesis), Sega’s annual revenue more than doubled to ¥213 billion. Then, in the midst of a recession in Japan, the unexpected happened. Sega’s annual revenue had rapidly and consistently grown during the 1980s until it finally surpassed ¥100 billion in fiscal year 1991. This isn’t really new information Sega’s annual revenues have long been known.
OK, so back to the graph: As we can see, from 1991 to 1998, Sega experienced a period of strong growth followed by a slight decline / leveling off period. While it doesn’t show if the company is making a profit, it’s still a good indicator of the health of a company and its potential for growth. Revenue shows how much money the company made overall from its sales and services. You might wonder: What does revenue tell us? Revenue is different from profit or net income. The revenue then was ¥200,645 million, which we could roughly equate with $2,006 million or, more simply, $2 billion. On the graph, Sega’s peak revenue period was from April 1993 to September 1993. If we assume for the sake of simplicity that ¥100 JPY = $1 USD (more on this later), then: Typically, the second half sees more revenue because of the holiday season.Īlso, the revenue is reported in ‘millions of yen,’ which is probably not the easiest unit to work with for most people. The above graph splits each fiscal year into two halves. ‘FY1994’ means the period from Apto March 31, 1994. csv file at the end of this article).įirst, here’s Sega’s total, worldwide revenue for the periods in question:Ī few notes: The fiscal year in Japan is from April 1 to March 31. Let’s take a look through some of the data (if you just want access to all the data, you can find it in an image file and a. Export revenue is given for each of these categories. The data is broken down into the following categories: 1) Amusement (arcade) product revenue, 2) Consumer (home console) product revenue, 3) Amusement operations revenue, and 4) Game software royalties. This data comes from Sega and matches the published annual revenue numbers. Perhaps most interesting is that the data also includes export revenues. I’ve recently gained access to some interesting data: a breakdown of Sega Enterprise’s revenues from 1991 to 1998 in six-month intervals.