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To: Paul Engel who wrote (81967)	5/28/1999 4:15:00 PM
From: L. Adam Latham	Read Replies (2) \| Respond to of 186894

Paul and all: This is slightly off-topic, but there has been discussion here recently about Sega and the other gamers, and WSJ-Interactive had an article today describing Sega's recent woes. Adam interactive.wsj.com Sega's Bottom Line Is Hit By Game Console Delays Sega Enterprises Ltd., a Japanese computer and arcade-game maker, Friday said that its group net loss widened to 42.88 billion yen ($357 million) for the year ended March 31 from 35.64 billion yen a year ago. Meanwhile, Sega said its sales plummeted 19.7% to 266.19 billion yen for the year due to delays in the development and production of hardware and software for its new Dreamcast computer-game console. Sales were also hurt by weakness in the arcade-game market. Although the company was able to return to the black on an operating-profit basis for the fiscal year, its bottom line was undermined by special losses as it liquidated unprofitable businesses both overseas and at home. Additional losses resulted from disposing of inventories of its earlier console model, the Sega Saturn. Sega's parent pretax profit plunged to 431 million yen for the year, down 96.1% from 11.03 billion yen a year ago, as sales dropped 21% to 214.55 billion yen. For the current fiscal year, the company expects to post a group net loss of 19.8 billion yen as it invests in the launch of Dreamcast in the U.S. and Europe. Sega President Shoichiro Irimajiri said the company aims to sell 1.5 million Dreamcast consoles in the U.S. and between 500,000 and 600,000 in Europe during the first year. So far, Sega has sold one million of the video-game machines in Japan since Dreamcast's November debut. Sega expects sales to surge to 386 billion yen. It plans on spending 17 billion yen this year on marketing Dreamcast for its September debut in the U.S. and Europe. In addition, Sega will spend five billion yen on investing in its Dreamcast network, which allows console owners to browse the Internet, send and receive e-mail, and play games with others over a telephone-line connection. The company also estimates it will be hit by a three billion yen special loss for the year as it reduces the size of its parent company's work force by 1,000 employees to 3,000 in a voluntary early retirement program. An accounting change will inflate Sega's software-development costs by 5 billion yen.