Japan – Sega Sammy sets its sights on majority ownership in Tokyo IRBy Phil - 19 December 2018
Sega Sammy has highlighted Tokyo as the group’s preferred location for an Integrated (casino) Resort in Japan but has said it will also keep a close eye on developments in Osaka.
The company’s Chairman and Group CEO Hajime Satomi said it would want to own a majority share in any consortium it was part of.
“Assuming we pursue development in the Tokyo metropolitan area, it is possible that it will be a large-scale project, and we do not know how much the total equity share will be, but since we would like to hold the largest equity share in it, we need to ensure we have that level of investment capability,” Mr. Satomi said. “In terms of the actual investment amount, it depends on the level of internal rate of return that is set based on the presumed income amount, so we intend to evaluate the investment-return balance. We will secure the capital required based on this by building up our net cash as well as considering financing activities such as loans.”
“With Osaka being selected to host the World Expo, we believe there is a possibility the large-scale IR facilities will be developed in conjunction with the event,” he added. “However, as has been reported in the press, there are still some issues in terms of infrastructure development. As we are a Kanto-based company, we intend to keep monitoring the situation for now and think carefully about whether we should actively engage in IR development in Osaka.”
Mr. Satomi added that in terms of the company’s pachinko business it was ‘not progressing on track.’
“One significant factor is the regulatory revisions that occurred in the Pachislot and Pachinko machines business,” he explained. “However, since Type-6 machines have extended the scope of playability, we believe they will provide us with momentum going into next fiscal year and beyond if the launch of “Pachislot SOUTEN-NO-KEN PONYOU,” which is scheduled to begin delivery in early January, will be successful. In the pachinko business as well, the voluntary regulations have been revised. If the changes are accepted by the market, we are confident that our business plan will go well next fiscal year. Should that happen, we have the possibility to achieve an operating income margin of 30 per cent or more, which is the medium-term target for the Pachislot and Pachinko Machines Business.”
“We believe that pachinko halls are currently saving their investment in machines, and there are halls which want to buy machines if there are good ones available. With the new regulation changes having enabled shorter play times, our mission now is to how we can bring back users by creating a more accessible experience for customers. Our Pachislot Disc Up is a machine with which it was difficult for halls to make a gross profit, but sales were favourable since the utilisation of the machine is very high and it attracted customers to visit halls. If we can supply machines with short play times and high utilisation rates and this model becomes popular, we believe it will be possible to curb the advance of low-stakes pachinko in the future.”