Is Sega Corp's Sonic the Hedgehog facing a shotgun marriage? The largest shareholder of Sega, creator of the Sonic game character, denies media reports that it's pushing Japan's No. 3 video-game maker into a merger with Sammy Corp, a maker of pachinko pinball machines. It also denies reports that Microsoft Corp and industry rival Electronic Arts Inc proposed rival bids.
CSK Corp, one of Japan's biggest information-technology services companies, may have good reason to consider offloading its 22 percent stake in the game unit, investors say. Sega has had five consecutive years of losses and its shares have plunged by four-fifths since May last year, dragging down CSK's bottom line.
"Sega's fate hinges on who CSK will sell its stake to," said Yoshihisa Okamoto, who helps manage ?221 billion (US$1.8 billion) in assets at Fuji Investment Management Co and doesn't own Sega shares.
A merger or sale would relieve the pressure on CSK's profits, meaning Sega, which once wrestled Sony Corp and Nintendo Co for supremacy in the US$20 billion a year game industry, may find itself with a new partner whether it wants one or not, investors say.
The Feb. 13 announcement of Sega's combination with Sammy prompted reports that Microsoft, maker of the Xbox game console, and Electronic Arts, the largest US game software maker, were contemplating bids for a slice of Sega.
Though CSK and Sega insist they haven't held talks with either of the US companies, doubts about Sega's future persist.
"The video-game industry has entered a period of attrition," Fuji Investment's Okamoto said. "The question that may determine whether a software developer survives is whether it has enough cash to develop winning games."
Speculation over Sega's fate underlines its waning ties with CSK, whose president, Masahiro Aozono, is focused on restoring the group to profitability.
CSK, a computer-systems developer and Web consultant, already considers its Sega stake to be "purely an investment," Aozono told analysts last year, suggesting the company is prepared to sell if the right offer comes along.
"We have not yet decided what to do with the [Sega] stake," CSK spokesman Hitoshi Tani said in an interview last week.
A sale would have been unthinkable three years ago, when CSK was still headed by its late founder, Isao Okawa.
Okawa, one of the fathers of Japan's software industry, led CSK's purchase of Sega in 1984 and donated ?85 billion worth of securities from his personal fortune to the company in March 2001, shortly before his death. That helped to cover the losses Sega suffered after abandoning its Dreamcast game console.
Merging with Sammy would bolster Sega's finances. The gamemaker has ?83.6 billion of debts, including ?50 billion of zero-coupon bonds that fall due next year, and a debt-to-equity ratio of 115 percent as of March last year. Sammy has virtually no debt and an operating profit margin of more than 30 percent.
Some analysts, though, question whether a maker of pachinko machines, which are associated with illegal gambling, is the right partner for a gamemaker whose Sonic character is designed to appeal to children.
SURPRISE GUEST: Media reports identified the visitor as Admiral Michael Studeman, director of the J2, which oversees intelligence at the US military’s Indo-Pacific Command A two-star US Navy admiral overseeing US military intelligence in the Asia-Pacific region has made an unannounced visit to Taiwan, two sources told Reuters on Sunday. The sources, who include a Taiwanese official familiar with the situation, said the official was Rear Admiral Michael Studeman. They were speaking on condition of anonymity. After initially saying on Sunday night that it had no comment about the report, the Ministry of Foreign Affairs said it welcomed the visit of an “unidentified US official,” but declined to give more details because the trip “has not been made public.” Presidential Office spokesman Xavier Chang (張惇涵) yesterday
AUTUMN STRUGGLE: The KMT and TPP set up stages on the rally’s sidelines, while Want Want boss Tsai Eng-meng said the DPP was curtailing freedom of speech Tens of thousands of people in Taipei yesterday took part in the “Autumn Struggle” (秋鬥) — an annual protest march by labor groups — but with this year’s focus on rejecting the government’s plan to allow imports of US pork containing ractopamine residue. “Against poisonous pork, against double standards, against a party-state,” the protesters, mostly wearing black, chanted in front of the rally’s main stage on Ketagalan Boulevard at about noon, before a parade set off at 2pm. Autumn Struggle spokesperson Lee Chien-cheng (李建誠) said this year’s march was divided into three teams, with the first team urging food safety and labor
DEFENSE: The construction of indigenous submarines will be a testament to the nation’s commitment to safeguard its sovereignty, President Tsai Ing-wen said President Tsai Ing-wen (蔡英文) yesterday presided over a ceremony to mark the start of construction of the nation’s first indigenous submarine at state-run shipbuilder CSBC Corp’s (台灣國際造船) shipyard in Kaohsiung. “This submarine is an important part of allowing our navy to develop asymmetric warfare and to intimidate and block enemy ships from surrounding Taiwan’s main island,” Tsai said. “With the construction of the submarine to its future commission, we will certainly let the world know our persistence in safeguarding our sovereignty.” Tsai has made boosting the nation’s indigenous defense capacity a central pillar of her defense policy. She recently relaunched the
ESPIONAGE CHARGE: A TAO spokesperson said that the rights of Shih Cheng-ping were ‘fully safeguarded’ during the hearing, which handed him four years in prison China sentenced Shih Cheng-ping (施正屏), a former National Taiwan Normal University (NTNU) professor, to four years in jail for espionage, officials said yesterday. The ruling came a month after Shih made a televised “confession” on state media. Shih, who is also a former chief economist for Chinese conglomerate Huaxia Group (華夏集團), was found guilty by a Chinese court on Tuesday, China’s Taiwan Affairs Office (TAO) told a news briefing. Shih — who vanished after traveling to China in August 2018 — was among Taiwanese who China Central Television (CCTV) last month showed confessing to spying. CCTV often broadcasts suspects admitting to crimes, even
RSS