Japanese game maker Sega Sammy sells resort to US fund
10 May 2024, 08:14
Financial terms of the deal were not disclosed.
Sega Sammy is selling its resort complex Seagaia to Fortress Investment Group of the US, the Japanese entertainment company said on Friday.
Tokyo-based Sega Sammy Holdings, the company behind the Sonic the Hedgehog video games, said it will sell all its shares in Phoenix Resort Co, which operates Seagaia in Miyazaki, southwestern Japan.
Financial terms of the deal were not disclosed.
The move, approved by the Sega Sammy board of directors, will result in a gain of about 8.5 billion yen (£43.8 million) in extraordinary income for the fiscal year through to March 2025.
New York-based Fortress was chosen, Sega Sammy said in a statement, because of its experience since the company has acquired 176 hotels since 2011.
Sega Sammy will continue to work with Phoenix, acquiring 20% of voting rights through newly issued shares after the ownership sale is completed.
Also on Friday, Sega Sammy reported its profit fell in the fiscal year that ended in March, to 33 billion yen (£169 million), from 45.9 billion yen the year before. Its sales rose 20% to 467.8 billion yen (£2.39 billion).
Sega Sammy has various entertainment operations, including video games such as Persona 3 Reload, which recorded one million downloads in the first week after its launch in February, and the older but still popular Angry Birds and Like a Dragon.
It also makes toys and pachinko and so-called pachislot machines, and owns intellectual property in animation works.
The company is banking on its Sonic licensing revenue through games and movies, a sector that has grown 10-fold in the last five years.
Although Sega Sammy’s resort operations recently returned to profitability, they suffered during the pandemic, when travel to Japan and within the country was disrupted.
By turning over management of Seagaia to Fortress, Sega Sammy intends to better focus on its core strengths such as video games.
Fortress is majority owned by Japanese telecoms and technology company SoftBank Group Corp, though the Abu Dhabi investment fund Mubadala announced in May 2023 that it would buy a majority stake in Fortress Investment from SoftBank.
The deal has yet to be finalised because of regulatory requirements.
