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Sega reports income growth and strong digital market performance

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Sega is reporting income increases and ongoing success in the digital game market for the fiscal year ending March 31, 2014, in spite of sluggish packaged game sales.

Net sales for the fiscal year hit 378 billion yen ($3.71 billion), an increase of 17.6 percent on the previous year. In February, Sega Sammy Holdings adjusted its projected financial results for the year from expected net sales of 485 billion ($476) to 377 billion yen, which it pegged on postponed sales of pachislot and pachinko machines.

Operating income increased by 102 percent from the previous fiscal year to 38.53 billion yen ($378 million). Sega Sammy recorded a net income of 30.72 billion yen ($302 million), a decrease of 8.2 percent from the previous year. Net sales for its consumer business arm increased by 18.6 percent over the previous year to 100 billion yen ($982 million). Operating income was 2.09 billion yen ($20 million), up from last year's operating loss of 732 billion yen ($7.2 billion).

The sector launched multiple titles such as Total War: Rome 2 with 1.13 million units and Football Manager 2014 with 790,000, yet reported a year-on-year decline in software sales. Sonic Lost World moved 710,000 copies, Company of Heroes 2 shipped 680,000 and Ryu ga gotoku Ishin! sold 390,000.

Performance remained favorable for the online role-playing title Phantasy Star Online 2, as well as smartphone games Puyopuyo!! Quest and Chain Chronicle. Sales of the smartphone and PC versions of its pachinko and pachislot games were enhanced. Overall, demand for social networking and smartphone digital increased, while the market for packaged games softened, a reflection of the company's plans to focus on the development of more mobile titles and deliver games that are connected across all platforms.