INTERNATIONAL BUSINESS; Sega Enterprises Pulls Its Saturn Video Console From the U.S. Market (original) (raw)
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INTERNATIONAL BUSINESS
- March 14, 1998
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March 14, 1998
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Section D, Page
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In a stunning retreat, Sega Enterprises Ltd., the company that gave wings to the high-flying video-game business with the success of its Sega Genesis console, announced today that it was pulling its Sega Saturn console from the United States market in the face of stiff competition from Sony and Nintendo.
The company said it would write off $450 million to cover losses at its United States subsidiary, Sega of America Inc., and on investment securities and a software venture, as well as for the disposal of inventory.
Sega expects to post a consolidated net loss for the year ending March 31 of 32.8 billion yen, or 254million,andanticipatesthatsaleswillfallalmost21percent,to254 million, and anticipates that sales will fall almost 21 percent, to 254million,andanticipatesthatsaleswillfallalmost21percent,to2.8 billion. Its stock sank 3.3 percent today to close at 2,130 yen.
Sega's president, Shoichiro Irimajiri, said the company had decided to take drastic steps to wipe out inventories to better position itself to bring out the next generation of video-game consoles, which it is developing with the Microsoft Corporation. He promised that although the company would no longer sell Saturn in the United States, it would continue sales in Japan and would continue to sell and develop software for the console.
Moody's Investors Service, the credit rating service, said this evening that it had placed Sega under review for a possible downgrade. It questioned Sega's ''ability to maintain its competitive position overseas in the highly trendy business'' of video games.
After the company sold some 20 million 16-bit Genesis consoles in the United States alone in the early 1990's, its 32-bit Saturn flopped. Introduced in 1995, only two million of the consoles sold in the United States, and five million in Japan.
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