Sega Sammy announced on Friday that it will sell its resort property, Seagaia, to US-based Fortress Investment Group.
Tokyo-based Sega Sammy Holdings, which developed the “Sonic the Hedgehog'' video game, announced it would sell all of its shares in Phoenix Resorts, which operates Seagaia in the city of Miyazaki in southwestern Japan.
Financial terms of the deal were not disclosed.
The move, which was approved by Sega Sammy's board of directors, will result in an extraordinary profit of approximately 8.5 billion yen ($55 million) in the fiscal year ending March 2025.
Sega Sammy said in a statement that New York-based Fortress was chosen because of the company's experience in acquiring 176 hotels since 2011.
SEGA SAMMY will continue to cooperate with Phoenix and will acquire 20% of the voting rights through newly issued shares even after the ownership sale is completed.
Also on Friday, Sega Sammy reported that profit for the fiscal year ending March fell to 33 billion yen ($212 million) from 45.9 billion yen a year earlier. Sales increased 20% to 467.8 billion yen ($3 billion).
Sega Sammy has released video games such as “Persona 3 Reload,'' which recorded 1 million downloads in the first week after its release in February, and old but still popular games such as “Angry Birds'' and “Like a Dragon.'' We are developing various entertainment businesses.
It also manufactures toys and pachinko, or so-called “pachislot,” machines, and owns the intellectual property for animation works.
The company relies on Sonic licensing revenue through games and movies, an area that has grown tenfold over the past five years.
Sega Sammy's resort operations recently returned to profitability, but struggled as travel to Japan and other countries around the country was suspended due to the pandemic.
By handing over management of Seagaia to Fortress, Sega Sammy intends to further focus on its core strengths, such as video games.
Fortress is majority-owned by Japanese communications and technology company SoftBank Group, but Abu Dhabi investment fund Mubadala announced in May 2023 that it would buy a majority stake in Fortress Investment from SoftBank. Due to regulatory requirements, this transaction has not yet been completed.
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Yuri Kageyama is in X: https://twitter.com/yurikageyama