Sega explained the point of expensive games when free-to-play projects earn three times as much

A recent Sega report shows that new premium titles generate only about one-third of the revenue of the free-to-play (F2P) segment, yet the company continues to invest in “highly volatile” new projects.

In its financial statement, Sega outlined why it still channels resources into new premium releases even though F2P games earn more. Premium titles can become increasingly profitable over time thanks to long-tail sales and licensing deals.

Last quarter, new releases brought in ¥87 billion (roughly $556 million), versus ¥269 billion (about $1.72 billion) from F2P games. Sega expects that ratio to narrow to approximately 1:2 by year‑end. The company notes that “higher margins stem from licensing and catalog sales of games that were originally released as premium.” Steady income from F2P projects, in turn, provides the financial base to launch riskier new franchises.

When catalog sales are included, premium games nearly caught up with F2P — ¥268 billion ($1.71 billion) for the quarter. Licensing added another ¥133 billion ($850 million) over the past year, and that sum is projected to grow. Sega admits that Sonic represents about 60% of that licensing revenue, while Atlus franchises and the Ryu Ga Gotoku (Like a Dragon) series contribute roughly 16%.

Source: iXBT.games