Sega has announced that the company has posted its first profit in five years. Sega lagged in consumer sales in the 2002 fiscal year, resulting in 8.5 billion yen ($73 million) in losses--half of its 106 titles released during the year did not make any profit for the company. While Sega's operating profits were 34.5 percent lower than the year before, the company's arcade business posted a profit of 18.8 billion yen ($161 million), resulting in 3 billion yen ($25 million) in profit for the company.

　　While Sega believes that it can still recover its operations without a merger, the company plans to make a number of changes. Its current development subsidiaries are scheduled to be reorganized from 10 companies down to four or five. Of its current 1,000 development staff members, 10 to 20 percent will be laid off. Sega's president, Hideki Satou, will be stepping down from his position to become the chairman of the company. Hisao Oguchi, the president of Sega subsidiary Hitmaker, will become Sega's new president after the next stockholders meeting on June 27. Sega also plans to broaden its sales in the United States, and it is considering business partners in that territory.

　　Sega still expects 20 percent of its 77 console game titles in the upcoming fiscal year to lose money, but it estimates an overall profit of 7.5 billon yen ($64 million) for the company overall.