about Sega's net profit nearly doubles on arcade game sales, cost cuts

TOKYO (AFP) - Computer game maker Sega said net profit in the nine months to December surged 92.3 percent from a year before to 7.7 billion yen (73 million dollars) on arcade game sales and significant cost cuts.

Sega Corp.'s recurring profit also rose 19.8 percent to 10.6 billion yen although overall sales slipped 4.1 percent to 144.5 billion yen, the company said in a statement.


"Sales of commercial-use game machines rose sharply during the period, helping boost our profits," a spokesman for the Japanese company said, adding popular amusement equipment included the 'UFO Catcher' crane to pick up cuddly toys and horse racing game machines.


Sales of computer game software grew steadily with the company selling 760,000 units in Japan, 1.15 million in the United States and 520,000 in Europe.


The company also managed to lower development costs in the nine-month period to 15 billion yen from 17 billion yen a year earlier, Sega executive officer Shoichii Yamazaki said at a press conference.


It also reduced sales promotion costs by 25 percent to 6.0 billion yen, and slashed sales, general and administration costs to 8.0 billion yen from 10 billion yen a year earlier.


"Our restructuring efforts, aimed at correcting high cost structure of our consumer software business, are showing steady progress," Yamazaki said.


For the full year to March 2004, Sega revised down projected sales to 190 billion yen from 195.7 billion yen seen earlier but left net and recurring profit forecasts unchanged at eight billion yen and 11.5 billion yen respectively.


The company aims to slash debt to 50 billion yen by the end of March from 95.3 billion yen in March last year.