Sega Sammy Ditches Resorts for Pixels: A Game-Changing Move
Sega Sammy, the powerhouse behind the iconic “Sonic the Hedgehog” video games, has made headlines with its decision to sell its resort complex Seagaia to Fortress Investment Group from the US. The move, approved by Sega Sammy’s board of directors, is set to bring in a substantial gain of about 8.5 billion yen in extraordinary income for the fiscal year ending in March 2025. This strategic shift will see Tokyo-based Sega Sammy Holdings divest all its shares in Phoenix Resort Co., the operator of Seagaia in Miyazaki, Japan’s southwestern gem.
Fortress Investment Group, a New York-based entity, was the chosen suitor thanks to its robust experience in the hospitality sector, having acquired a whopping 176 hotels since 2011. While the sale marks a significant transition for Sega Sammy, the company plans to maintain ties with Phoenix by acquiring 20% of voting rights through newly issued shares once the ownership transfer is finalized. The decision to part ways with Seagaia comes amidst Sega Sammy’s financial reports showing a decline in profit to 33 billion yen in the recent fiscal year, down from 45.9 billion yen the year prior.
Sega Sammy’s diverse entertainment portfolio extends beyond video games, with recent successes like “Persona 3 Reload” garnering 1 million downloads in its launch week this February, alongside enduring favorites like “Angry Birds” and “Like a Dragon.” In addition to video games, the company dabbles in toy manufacturing and operates in the lucrative pachinko and “Pachislot” machine industry, while also boasting intellectual property in the realm of animation. Notably, the company has seen exponential growth in its Sonic licensing revenue from games and movies, a sector that has expanded tenfold over the past five years.
Despite Sega Sammy’s resort segment returning to profitability in recent times, the industry took a hit during the pandemic with travel restrictions hindering tourism both domestically and internationally. By entrusting Seagaia’s management to Fortress, Sega Sammy aims to refocus on its core competencies, particularly in the realm of video games. It’s a strategic move aligning with the company’s vision to leverage its strengths amid a rapidly evolving entertainment landscape.
The acquisition of Seagaia by Fortress Investment Group not only signifies a new chapter for the iconic resort but also underlines Sega Sammy’s commitment to adapt and thrive in a dynamic market. With a legacy rooted in innovation and entertainment, Sega Sammy’s strategic maneuvers exemplify a company poised to evolve and continue captivating audiences worldwide with its enchanting creations.
