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.
SOLVED: Domestic orders have already overtaken the total sold to China last year, while the Canadian and US representative offices posted messages of support A joint effort by groups and individuals in Taiwan and abroad to prop up sales of pineapples after China announced a ban on imports of the fruit succeeded in just four days, the Council of Agriculture (COA) said yesterday. China on Friday announced that it would suspend imports of Taiwanese pineapples starting on Monday, citing biosafety concerns. Following the announcement, the council urged the public to assist farmers by purchasing pineapples, saying it hoped to sell 20,000 tonnes of the fruit domestically and 30,000 tonnes in exports. “Domestic orders have already surpassed the total sold to China last year,” COA Minister
‘UNFRIENDLY’: COA Minister Chen Chi-chung said that Beijing probably imposed the sanction because the pineapple production season is about to start in Taiwan More than 99 percent of pineapples sold to China passed inspections, the government said yesterday, after China earlier in the day abruptly suspended imports of pineapples from the nation, which Taipei called an “unfriendly” move. From Monday, China is to stop importing pineapples from Taiwan, the Chinese General Administration of Customs said. The regulation is a normal measure for ensuring biosafety, China’s Taiwan Affairs Office spokesman Ma Xiaoguang (馬曉光) said in a news release later yesterday. Since last year, Chinese customs officials have repeatedly seized pineapples imported from Taiwan that carried “perilous organisms,” Ma said. Were the organisms to spread in China, they would
Taiwanese netizens and politicians yesterday mocked a Chinese plan to build a transportation network linking Beijing and Taipei, calling it “science fiction” and “daydreaming.” Their comments were in reaction to the Chinese State Council’s release last week of its “Guidelines on the National Comprehensive Transportation Network Plan,” which include several proposed transportation links, with one map showing a line running from China’s Jingjinji Metropolitan Region (Beijing-Tianjin-Hebei) across the Taiwan Strait to Taipei. “This is the Chinese leadership daydreaming again of [fulfilling its] fantasy of extending China’s transportation network to Taiwan. I suggest people regard it as science fiction,” Democratic Progressive
‘ONE PERSON PER UNIT’: People undergoing home isolation cannot stay in a housing unit in which non-isolated people live, unless they have special approval Starting tomorrow, people under home isolation would be required to follow the “one person per housing unit” rule if in private housing, or stay at a quarantine hotel or centralized quarantine facility, the Central Epidemic Command Center (CECC) said yesterday. Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, said the rules require people under home quarantine to be quarantined with one person per housing unit, or at a quarantine hotel or centralized quarantine facility. “Starting on March 1, individuals under home isolation will also be subject to the ‘one person per housing unit’ rule,” he said. “We
RSS