Sega Sammy is selling its Seagaia resort complex to US-based Fortress Investment Group, the Japanese entertainment company said on Friday.
Tokyo-based Sega Sammy Holdings, the company behind the “Sonic the Hedgehog” video games, said it will sell all of its shares in Phoenix Resort Co., which operates Seagaia in Miyazaki, southwestern Japan.
Financial terms of the deal were not disclosed.
The move, approved by Sega Sammy’s board of directors, will result in a gain of around 8.5 billion yen ($55 million) in extraordinary revenue for the fiscal year through March 2025.
New York-based Fortress was chosen, Sega Sammy said in a statement, because of its experience since the company acquired 176 hotels since 2011.
Sega Sammy will continue to work with Phoenix, acquiring 20% of voting rights through newly issued shares upon completion of the property sale.
Also on Friday, Sega Sammy reported that its profit fell in the fiscal year ending in March to 33 billion yen ($212 million) from 45.9 billion yen the previous year. Its sales rose 20% to 467.8 billion yen ($3 billion).
Sega Sammy has several entertainment operations, including video games such as “Persona 3 Reload,” which recorded 1 million downloads in the first week after its release in February, and the older but still popular “Angry Birds” and “Like a Dragon.”
It also manufactures toys and pachinko and so-called “pachislot” machines, and has intellectual property in animation works.
The company is banking on Sonic licensing revenue through games and movies, a sector that has grown 10x in the past five years.
While Sega Sammy’s resort operations recently returned to profitability, they suffered during the pandemic when travel to and within Japan was halted.
By transferring management of Seagaia to Fortress, Sega Sammy intends to better focus on its main strengths, such as video games.
Fortress is majority owned by Japanese telecommunications and technology company SoftBank Group Corp., although Abu Dhabi investment fund Mubadala announced in May 2023 that it would buy a majority stake in Fortress Investment from SoftBank. The deal has not yet been finalized due to regulatory requirements.
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