Japanese amusement giant Sega Sammy Holdings, the creators of Sonic the Hedgehog and Angry Birds, recently announced plans to Seagaia, its seaside resort complex in Miyazaki, to U.S.-based Fortress Investment Group to shift its focus back to its core businesses: video game development and online casino gaming through its subsidiaries GAN and recently acquired Rovio Entertainment.
Although the financial terms of the deal have not been disclosed, news reports priced the deal at $55 million. Located in Miyazaki on Kyushu island, Seagaia is operated by Phoenix Resort Co.
Under the terms of the deal, Sega Sammy will sell all its common shares of Seagaia to Fortress Investment Group and acquire new shares, giving the company 20% of the voting rights in Phoenix after the transaction is completed.
Sega Sammy said Fortress’s extensive experience in the hotel and resort business will help maximize the resort’s corporate value.
“Even after Phoenix achieved profitability, we considered various measures to further increase its corporate value. We decided the best way is to bring in Fortress as a strategic partner and have it take the lead in Phoenix’s operations,” the company said.
With this deal, the investment firm now owns 176 hotels across Japan.
Opened in 1993 for $2 billion through a joint venture between the local government and private investors, Seagaia has never reported profitability until March 2024, when it reported a net profit of $140,000, its highest revenue since the acquisition.
Fortress’s acquisition of Seagaia comes amid surging inbound tourism in Japan. The Japanese government estimates that international tourists will reach 33 million this year, surpassing the pre-pandemic record. This trend has attracted foreign companies, like Fortress, to invest heavily in Japan’s hospitality sector.
