Sega Sammy Holdings, the Japanese entertainment company known for the iconic 'Sonic the Hedgehog' video games, has announced the sale of its resort complex Seagaia to Fortress Investment Group, a U.S.-based firm. The Tokyo-based Sega Sammy will be divesting all its shares in Phoenix Resort Co., the operator of Seagaia located in Miyazaki, southwestern Japan.
The financial terms of the transaction have not been disclosed. However, the move has been approved by the Sega Sammy board of directors and is expected to generate an extraordinary income of approximately 8.5 billion yen ($55 million) for the fiscal year ending in March 2025.
Fortress Investment Group was selected as the buyer due to its extensive experience in the hospitality sector, having acquired 176 hotels since 2011. Following the sale, Sega Sammy will retain a 20% stake in Phoenix Resort Co. through newly issued shares, allowing the company to maintain a strategic partnership with the resort operator.
In addition to the sale of Seagaia, Sega Sammy reported a decline in profit for the fiscal year ending in March, with sales reaching 467.8 billion yen ($3 billion). The company's diverse entertainment portfolio includes popular video games like 'Persona 3 Reload' and classic titles such as 'Angry Birds' and 'Like a Dragon.'
Despite challenges faced by its resort operations during the pandemic, Sega Sammy remains optimistic about its future prospects. By offloading Seagaia to Fortress, the company aims to refocus on its core strengths in the video game industry, leveraging its successful Sonic licensing revenue from games and movies.
Fortress Investment Group, majority-owned by SoftBank Group Corp., is set to undergo a change in ownership as Abu Dhabi investment fund Mubadala moves to acquire a majority stake in the firm from SoftBank, pending regulatory approval.
Overall, the sale of Seagaia marks a strategic decision by Sega Sammy to streamline its operations and capitalize on its key strengths in the entertainment sector, signaling a new chapter for both companies involved in the transaction.
