Sega Splits Resorts and Video Gaming Divisions in Two Subsidiaries

Japanese gaming and hospitality holdings Sega Sammy has announced that it is splitting its amusement and video gaming divisions into two subsidiaries.  

Sega Launches Two Separate Business Arm to Hedge against Pandemic

Sega Sammy is moving forward with a planned split of its video games and amusement divisions, as part of the company re-organization and two-pronged business model. In a statement, the Japanese gaming firm said it had been working on “structural reform to transform its business structure to adapt to the external environment,” referring to a need to split its operations in a way that allow it to run its models separately.

As a result, the company will now operate under the roof of Sega Group Corporation, which will focus on video gaming entirely and Sammy Corporation, which will take care of pachinko, pachislot, and jankyu machines, among others. Both entities will be listed as fully-owned subsidiaries by Sega Sammy, which will now try to diversify its business model as well as draw clear separation between two potentially conflicting models.

Discussing the decision further, Sega Sammy Holdings claimed that it would lead to a better overall business model and optimization. Sega has faced a somewhat difficult time during the pandemic that paralyzed the entire world and whose effects can still be felt today, with the attempt to vaccinate the world under COVAX and eradicate the disease slowly advancing.

Sega’s operational results boomed as a result of a stronger video gaming year during the pandemic, but the company’s resorts and amusement divisions felt the sting of shutdowns as they were depleted from income and visitors.

Sega Sammy has urged employees to take voluntary redundancies, affecting up to 650 full-time employees, in a bid to offset costs by paying employees in a lump and retiring them ahead of time. The company also introduced Haruki Satomi as the group’s new CEO who will take care of both Sega Group Corporation and Sammy Corporation.