Sega Sammy Holdings Inc - ADR (OTC:SGAMY) issued a financial warning due to disappointing sales during the crucial holiday season of 2023.

The company attributed the downward revision of its sales and profit forecast to "weak sales" of new games released in the third quarter of the financial year, reported IGN.

Sega highlighted "sluggish" sales of titles like "Sonic Superstars," "Endless Dungeon," and "Total War: Pharaoh" during the holiday season.

The company also incurred losses linked to an inventory write-down, which were "in response to these sales conditions."

"As a result of these factors, etc., both sales and ordinary income are expected to be lower than previous forecast," the company said in a statement.

Sales struggles were particularly notable in Europe and the United States, where Sega cited a plateau in market expansion due to economic challenges like inflation.

Despite the success of recently released games like "Like a Dragon: Infinite Wealth" and "Persona 3 Reload," Sega doesn't anticipate these titles, nor the upcoming "Unicorn Overlord," to offset the overall lower sales and profits for the financial year.

The company acknowledged the impact of competitive titles, notably "Super Mario Bros. Wonder," which launched shortly after "Sonic Superstars."

Sega announced ongoing structural reforms in its European game development business, including the cancellation of projects like "Hyenas" and a review of the medium-term lineup. This restructuring also involves management changes.

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