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.
NEXT STEP? The contract chipmaker said it would decide whether to add more plants based on operation efficiency, cost economics and demand Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is planning to build several more chipmaking fabs in the US state of Arizona beyond the one already planned, three people familiar with the matter said. TSMC, the world’s largest contract chipmaker, announced in May last year that it would build a US$12 billion fab in Arizona. The 12-inch wafer fab in Phoenix is expected to start mass production in 2024, the Investment Commission said in December, when it approved the plan. Three sources familiar with the matter, speaking on condition of anonymity as they were not authorized to speak to the media, said that up
VIRUS CURBS: Visiting people staying at healthcare and long-term care facilities in Taipei, New Taipei City and Taoyuan is banned until May 17, the CECC announced The Central Epidemic Command Center (CECC) yesterday banned visits to patients or residents at healthcare and long-term care facilities in three cities until May 17. It also reported six imported cases of COVID-19 and two cases with unclear infection sources. As the number of locally transmitted cases rises, some of whom have visited many places in Taipei, New Taipei City and Taoyuan, enhanced disease prevention measures have to be implemented in the three cities, said Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center. “Visiting people staying at healthcare and long-term care facilities in Taipei, New Taipei City and
TAKING NOTICE: In the first time that G7 foreign ministers have mentioned Taiwan in a joint communique, they called for ‘peace and stability across the Taiwan Strait’ The Presidential Office yesterday thanked the G7 foreign ministers for their strong support of Taiwan after the group in its joint statement on Wednesday called for the nation’s participation in the WHO, and the importance of peace and stability across the Taiwan Strait. The ministers in a communique issued at the end of their three-day meeting declared support for “Taiwan’s meaningful participation” in WHO forums and the World Health Assembly (WHA). “The international community should be able to benefit from the experience of all partners, including Taiwan’s successful contribution to the tackling of the COVID-19 pandemic,” it said. The statement included a section
UP TO TWO DAYS: Minister of Health and Welfare Chen Shih-chung said that most who got the shot and felt discomfort only felt ill for the first two days Employees can ask for unpaid COVID-19 vaccination leave, from the day of their shot until the end of the next day, the Central Epidemic Command Center (CECC) announced yesterday, adding that the policy takes effect immediately. “The policy of unpaid COVID-19 vaccination leave will be implemented starting on May 5, and all workers and civil servants will be eligible,” Minister of Health and Welfare Chen Shih-chung (陳時中), who heads the center, told a news conference. Leave can be taken on the day of vaccination and if recipients feel discomfort after getting the shot, they can extend the leave to all of the