Is Sega Corp's Sonic the Hedgehog facing a shotgun marriage? The largest shareholder of Sega, creator of the Sonic game character, denies media reports that it's pushing Japan's No. 3 video-game maker into a merger with Sammy Corp, a maker of pachinko pinball machines. It also denies reports that Microsoft Corp and industry rival Electronic Arts Inc proposed rival bids.
CSK Corp, one of Japan's biggest information-technology services companies, may have good reason to consider offloading its 22 percent stake in the game unit, investors say. Sega has had five consecutive years of losses and its shares have plunged by four-fifths since May last year, dragging down CSK's bottom line.
"Sega's fate hinges on who CSK will sell its stake to," said Yoshihisa Okamoto, who helps manage ?221 billion (US$1.8 billion) in assets at Fuji Investment Management Co and doesn't own Sega shares.
A merger or sale would relieve the pressure on CSK's profits, meaning Sega, which once wrestled Sony Corp and Nintendo Co for supremacy in the US$20 billion a year game industry, may find itself with a new partner whether it wants one or not, investors say.
The Feb. 13 announcement of Sega's combination with Sammy prompted reports that Microsoft, maker of the Xbox game console, and Electronic Arts, the largest US game software maker, were contemplating bids for a slice of Sega.
Though CSK and Sega insist they haven't held talks with either of the US companies, doubts about Sega's future persist.
"The video-game industry has entered a period of attrition," Fuji Investment's Okamoto said. "The question that may determine whether a software developer survives is whether it has enough cash to develop winning games."
Speculation over Sega's fate underlines its waning ties with CSK, whose president, Masahiro Aozono, is focused on restoring the group to profitability.
CSK, a computer-systems developer and Web consultant, already considers its Sega stake to be "purely an investment," Aozono told analysts last year, suggesting the company is prepared to sell if the right offer comes along.
"We have not yet decided what to do with the [Sega] stake," CSK spokesman Hitoshi Tani said in an interview last week.
A sale would have been unthinkable three years ago, when CSK was still headed by its late founder, Isao Okawa.
Okawa, one of the fathers of Japan's software industry, led CSK's purchase of Sega in 1984 and donated ?85 billion worth of securities from his personal fortune to the company in March 2001, shortly before his death. That helped to cover the losses Sega suffered after abandoning its Dreamcast game console.
Merging with Sammy would bolster Sega's finances. The gamemaker has ?83.6 billion of debts, including ?50 billion of zero-coupon bonds that fall due next year, and a debt-to-equity ratio of 115 percent as of March last year. Sammy has virtually no debt and an operating profit margin of more than 30 percent.
Some analysts, though, question whether a maker of pachinko machines, which are associated with illegal gambling, is the right partner for a gamemaker whose Sonic character is designed to appeal to children.
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
CHIP EXCEPTION: An official said that an exception for Taiwanese semiconductors would have a limited effect, as most are packaged in third nations before being sold The Executive Yuan yesterday decried US President Donald Trump’s 32 percent tariff on Taiwanese goods announced hours earlier as “unfair,” saying it would lodge a representation with Washington. The Cabinet in a statement described the pledged US tariffs, expected to take effect on Wednesday next week, as “deeply unreasonable” and “highly regrettable.” Cabinet spokeswoman Michelle Lee (李慧芝) said that the government would “lodge a solemn representation” with the US Trade Representative and continue negotiating with Washington to “ensure the interests of our nation and industries.” Trump at a news conference in Washington on Wednesday announced a 10 percent baseline tariff on most goods
THUGGISH BEHAVIOR: Encouraging people to report independence supporters is another intimidation tactic that threatens cross-strait peace, the state department said China setting up an online system for reporting “Taiwanese independence” advocates is an “irresponsible and reprehensible” act, a US government spokesperson said on Friday. “China’s call for private individuals to report on alleged ‘persecution or suppression’ by supposed ‘Taiwan independence henchmen and accomplices’ is irresponsible and reprehensible,” an unnamed US Department of State spokesperson told the Central News Agency in an e-mail. The move is part of Beijing’s “intimidation campaign” against Taiwan and its supporters, and is “threatening free speech around the world, destabilizing the Indo-Pacific region, and deliberately eroding the cross-strait status quo,” the spokesperson said. The Chinese Communist Party’s “threats
RSS