October 23rd, 2002 (12:00am) - Sega Corp’s shares plummeted for the fourth straight time on Tuesday, reaching a new year-low.
Sega’s shares lost 4.08 percent to close at 1,600 yen after touching a 13-month low of 1,580 yen, underperforming a 3.22 percent decline in the key Nikkei average. Its shares have lost 17 percent in value over the last four sessions.
"Disappointing sales of its key football game in the lucrative North American market have raised concerns about the fate of Sega’s revival scenario as a game software publisher," said Takeshi Tajima, an analyst at BNP Paribas.
In August, the Japanese videogame maker released "Sega Sports NFL 2K3", an American football simulation game, in North America aiming to boost its share of the U.S. sports game market.
But Sega seems to have sold about 400,000 copies so far, below its initial target of 1.5 million copies and compared with nearly 1.5 million copies of the rival game "Madden NFL 2003" sold by Electronic Arts Inc in almost the same period, BNP’s Tajima said.
He cut his rating on Sega to "neutral" from "outperform".
Sega has mapped out a plan to sell a total of 20 million copies of game software in the year to next March, including five million in North America.
UBS Securities analyst Atsuko Kaneko estimated that sales of Sega’s game software in the North American market fell 11 percent in April-September from the same period last year, below its initial estimate.
"This will make it difficult to achieve our initial estimate of a 40 percent rise in North American game sales," she said.
Kaneko, who has a "reduce" rating on Sega, is considering revising down her estimate of its earnings for this year, seeing a 22.4 billion yen ($179.4 million) group operating profit and a 19.2 billion yen net profit.
In May, Sega projected a group operating profit of 21 billion yen and a net profit of 18 billion yen.
Shunji Yamashina, an analyst at Morgan Stanley, said in a report on Monday, however, that poor sales of NFL2K3 had already been factored into the share price and investors’ loss of faith in Sega had been overdone.
He said: "We see this as the climax of the sell-off sparked by the flopping of NFL2K3, and consider the slump to be near its end."
