Sega Sammy pulled in $639.4 million during the quarter, including video game sales, arcade and pachinko revenues. The company noted that growth in the home video game business had "leveled off in Japan and North America, due to the popularization of the current generation of game platform," but called demand in Europe "relatively firm."

Comments about its arcade business were less rosy, saying "conditions remained difficult due to sluggish personal consumption."

Sega says it sold 2.65 million video games during the quarter, with 1.12 million of those in Europe, 990,000 in the U.S. and 530,000 in Japan. The company's best performing platform was the Wii, with more than 550,000 games sold on that platform during the quarter. Nintendo's console beat out the PS3 with 310,000 Sega games sold and the Xbox 360 with sales of 200,000. Sega's consumer business—which also includes toys, mobile phones, animated films and PC content—dropped more than 40%, incurring a loss of about $47.59 million USD.

The company also shared sales info on The Conduit, which shipped 150,000 units on the Wii during the quarter to American and European gamers. Virtua Tennis 2009 did a bit better across its multiple platforms, moving 790,000 copies during the quarter.

While not a positive quarter for the company, at least it didn't suffer as badly as if it had released Shenmue III.

The company chalked up a net ¥ 22.88 billion loss, which was less than the ¥52.47 billion loss of last year. The company's pachinko and arcade business caused financial bleeding. While game sales were firm, there was a 7.5 percent decline in those sales.

Sega Sammy did see a pretax profit of ¥6.64 billion compared to the previous year's ¥8.22 billion, but is already forecasting a 2.1 percent decrease in sales for the next financial year.

In order to cut costs, Sega Sammy is offering an early retirement program.

Background: Sammy, which bought SEGA in 2004, has published Guilty Gear tiles like Guilty Gear X, Guilty Gear Isuka and Guilty Gear XX Slash. (However, Arc System Works self-published Gear XX Accent Core and the recent Guilty Gear 2: Overture).

Here's the exchange between Gamasutra and GG designer Daisuke Ishiwatari:

Gamasutra: This is a tough question, I don't know if you can answer it, but there have been some rumors on the net about Guilty Gear and Sega getting the rights, which is why [Arc System Works' Dynasty Warriors-style action title] Guilty Gear 2: Overture didn't feature too many older characters — and stuff that I don't really understand. Though you might not be able to provide any answers...

Ishiwatari: Right, I might not be able to provide answers there.

Gamasutra: You know, rumors... on the Internet...

Ishiwatari: Yeah, I can't really talk about it much... except to say that they're basically true. (laughs)

So that basically seems like a confirmation from Ishiwatari himself. Be sure to read the whole Gamasutra piece. It's meaty.

Dodging, Striking, Winning: The Arc System Works Interview [Gamasutra via Go Nintendo via Sega Nerds]

That's not an area we want to play in right now. We have no interest in being acquired, we are very happy with our position right now.

The company also said it's planning to lay off 400 employees at Sega's games division. The arcade division saw a profit of 132 million yen the year before, but plans to post a loss of 11.4 billion yen in the coming year. In times like these, when many people are about to find themselves without a job, we can always place blame on Shadow the Hedgehog. He must be responsible for at least some of this.

Sega Sammy sees loss in 2007/08, to cut 400 jobs [Reuters]

Love those spinning silver balls! Sega Sammy's upcoming Wii title Jissen Pachinko/Pachislot Hisshouhou! Sammy's Collection Hokuto no Ken Wii will employ both Miis and Wii Wi-Fi for online rankings and in-game avatars. Titled Fighting Pachinko/Pachislot Victory Way! Sammy's Collection Fist of the North Star Wii in English, the game will hit Japan this May. Interesting bit: Players can use the Wii-mote as a steering wheel to control the spinning balls. Earlier, SNK's US honcho stated that it didn't look like Nintendo was going to let third-party publishers include online in their games this year. Then again, he could've just been talking about America as a pachinko game probably isn't hitting the West anytime soon. Brian Ashcraft

Sega Sammy Pachinko Game [Wii Fanboy via 1Up]

Sanrio, who sit atop the throne of the mystic Hello Kitty cuteness empire, reached a content sharing agreement yesterday with Sega Sammy which will allow for the two companies to share characters. The news article states the agreement would be "paving the way for the mouthless feline to make her video game debut," though I doubt a character with almost 40 games listed at GameFaqs needs all that much paving. In fact Sega has already produced several HK games in Japan for the Dreamcast, including my favorite, Hello Kitty Lovely Fruit Park - the best damn fruit park game anywhere.

The two companies are also looking to strengthen their capital arrangement in the future, with Sega Sammy already owning a 13.98% stake in Sanrio.

While I can't see myself preordering a new Hello Kitty game despite owning a toaster that burns her sacred image into a variety of bread products, I wouldn't mind seeing her pop up in a Sonic game. Our spiky blue friend needs a new love interest, seeing as Cream the Rabbit is too young and Amy is a shameless pink hussy. Michael Fahey

Hello Kitty goes gaming [Gulf Daily News via Evil Avatar]