Net income dropped to ¥779M yen ($6.72M) in the April-June quarter, compared with ¥10.7B a year earlier, the Tokyo-based company said in a statement. Sales fell 14.83 percent to ¥85.72B ($734.48M) from ¥100.53B.

The drop in earnings was due to the lack of "big titles" in its slot machines during the period, said Sega Sammy spokeswoman Yuri Takehara. Pachinko — an upright pinball game — and slot machine sales fell by 56 percent to ¥21.81B ($188.01M) from ¥49.83B.

Under its "scrap and build" policy, Sega Sammy closed six amusement centers that were unprofitable in Japan and opened four new amusement centers in the latest quarter, Takehara said. The company said it was operating 460 amusement centers as of June 30.

For the fiscal year ending March, Sega Sammy kept its group net profit outlook of ¥75B ($646.55M) on group sales of ¥682B ($5.88B).

Sega Sammy shares closed 2.67 percent lower in Tokyo at ¥3,650 ($31.47) shortly before the company released its earnings. Sega, which makes Sonic the Hedgehog games, and Sammy, a pinball maker, merged to form Sega Sammy Holdings Inc., in October 2004.