TL;DR
- Sega Sammy reported a sharp drop in operating and ordinary income for the nine months ended December 31, 2025, despite a small rise in net sales.
- The company recorded a nearly $200 million impairment loss on Rovio, saying the Angry Birds maker fell well below expectations.
- Sega plans to refocus on mainstay IPs, expand its transmedia strategy, and strengthen Rovio’s leadership to improve performance.
Sega Sammy Holdings has published its financial results for the nine months ended December 31, 2025, revealing a steep decline in profits and a major write-down tied to Rovio Entertainment, the studio behind Angry Birds.
While overall revenue edged up year-on-year, operating and ordinary income fell by more than 50 percent. The company attributed the decline largely to new game releases that did not meet sales expectations and to weaker performance at Rovio, which Sega acquired in 2023 for $776 million.
The Numbers at a Glance
For the nine-month period ended December 31, 2025:
Net sales: ¥335.2 billion, approximately $2.1 billion, up 4 percent year-on-year
Operating income: ¥19.8 billion, approximately $129.2 million, down 54.6 percent year-on-year
Ordinary income: ¥23.8 billion, approximately $155.3 million, down 51.8 percent year-on-year
Despite modest revenue growth, the sharp drop in profit highlights mounting pressure on Sega’s gaming business.
Entertainment Contents Segment Sees Profit Slide
Within Sega’s Entertainment Contents segment, operating income declined 31 percent to ¥23.7 billion, while ordinary income fell 34 percent to ¥24.6 billion.
Net sales in the segment remained relatively stable at ¥242.2 billion, slightly up from ¥238.6 billion during the same period last year.
Sega said new full-game and free-to-play titles underperformed, while existing free-to-play titles “performed steadily.” On a more positive note, revenue from licensing, subscriptions, DLC, and animation “surpassed expectations.”
In the third quarter, Sega launched two new titles: Football Manager 26 and Sonic Rumble. According to the company, Sonic Rumble failed to meet expectations, particularly in terms of customer acquisition.
Rovio Impairment Loss Nears $200 Million
A major factor in the earnings decline was a significant impairment loss related to Rovio Entertainment.
Sega described Rovio’s third-quarter performance as “sluggish,” adding that it “fell significantly short of the initial forecast due to rapid changes in the market environment and other factors.”
The company explained that although Rovio has “strong development and operational capabilities” and was acquired to “accelerate Sega's business expansion” in mobile gaming, the market “rapidly changed” in a short time. Increased competition and the emergence of major titles were cited as key reasons for the underperformance.
Following a review, Sega determined that “the recoverable amount related to Rovio significantly fell below its carrying amount,” resulting in an impairment loss of ¥30.4 billion, approximately $198.6 million, recorded in the third quarter.
The write-down underscores the challenges currently facing the global mobile gaming market.
In response to the weaker results, Sega announced plans to sharpen its focus on “mainstay IPs,” strengthen its transmedia strategy, and reinforce its internal management structure.
For Rovio, this includes the appointment of Daniel Svärd as COO. Svärd previously led live game studios at King, known for the globally successful Candy Crush Saga franchise.
Rovio aims to “leverage operational expertise cultivated through Candy Crush series and other titles to improve the performance of existing titles and lead project promotion toward the success of new titles.”
Within its broader Entertainment Contents business, Sega plans to release four major new titles tied to its core IP portfolio. The company also intends to enhance its “sales capabilities” to maximize each game’s performance and continue expanding its transmedia initiatives across film, television, and other media.
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