More Video Game Companies in the Red

Following Squaresoft, who reported the company’s first ever financial loss due to costs associated with the Final Fantasy movie, delays in the PlayOnline service and delays with Final Fantasy 10, Namco and Sega have now also announced fiscal losses for the year.

According to The Magic Box, Namco is expected to post a 1.6 billion yen loss for the current fiscal year, due mainly to a current slump in Japanese arcade revenue and poor Playstation 2 sales. The company had predicted sales of Namco games for the Playstation 2 to reach 900,000 copies, but their first two releases, the racing game Moto GP and the RPG Seven, sold only 290,000 total copies, and they anticipate sales of only 500,000 of their upcoming third PS2 release Klonoa 2. As a result of poor income from Japanese arcades this year, Namco will be closing 66 of its arcades throughout Japan.

GameSpot reports that Sega of Japan will cut “300 jobs over the next two weeks as part of its exit from the console hardware manufacturing market.” “Sega expects to suffer a record net operating loss of 58.3 billion yen (about $500 million) for the fiscal year ending March 2001. This will be the fourth straight year that Sega Corporation has reported a net operating loss.”