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.
SECURITY: As China is ‘reshaping’ Hong Kong’s population, Taiwan must raise the eligibility threshold for applications from Hong Kongers, Chiu Chui-cheng said When Hong Kong and Macau citizens apply for residency in Taiwan, it would be under a new category that includes a “national security observation period,” Mainland Affairs Council (MAC) Minister Chiu Chui-cheng (邱垂正) said yesterday. President William Lai (賴清德) on March 13 announced 17 strategies to counter China’s aggression toward Taiwan, including incorporating national security considerations into the review process for residency applications from Hong Kong and Macau citizens. The situation in Hong Kong is constantly changing, Chiu said to media yesterday on the sidelines of the Taipei Technology Run hosted by the Taipei Neihu Technology Park Development Association. With
CARROT AND STICK: While unrelenting in its military threats, China attracted nearly 40,000 Taiwanese to over 400 business events last year Nearly 40,000 Taiwanese last year joined industry events in China, such as conferences and trade fairs, supported by the Chinese government, a study showed yesterday, as Beijing ramps up a charm offensive toward Taipei alongside military pressure. China has long taken a carrot-and-stick approach to Taiwan, threatening it with the prospect of military action while reaching out to those it believes are amenable to Beijing’s point of view. Taiwanese security officials are wary of what they see as Beijing’s influence campaigns to sway public opinion after Taipei and Beijing gradually resumed travel links halted by the COVID-19 pandemic, but the scale of
A US Marine Corps regiment equipped with Naval Strike Missiles (NSM) is set to participate in the upcoming Balikatan 25 exercise in the Luzon Strait, marking the system’s first-ever deployment in the Philippines. US and Philippine officials have separately confirmed that the Navy Marine Expeditionary Ship Interdiction System (NMESIS) — the mobile launch platform for the Naval Strike Missile — would take part in the joint exercise. The missiles are being deployed to “a strategic first island chain chokepoint” in the waters between Taiwan proper and the Philippines, US-based Naval News reported. “The Luzon Strait and Bashi Channel represent a critical access
Pope Francis is be laid to rest on Saturday after lying in state for three days in St Peter’s Basilica, where the faithful are expected to flock to pay their respects to history’s first Latin American pontiff. The cardinals met yesterday in the Vatican’s synod hall to chart the next steps before a conclave begins to choose Francis’ successor, as condolences poured in from around the world. According to current norms, the conclave must begin between May 5 and 10. The cardinals set the funeral for Saturday at 10am in St Peter’s Square, to be celebrated by the dean of the College
RSS