The Japanese stockmarket exhibited mixed reactions to the Sammy-Sega merger confirmed in yesterdays trading, shares closing up 13.7%, whilst Sammy's dropped 2.31%. When completed the merged company - to be known as Sega Sammy Holdings - will be one of Japan's largest players with income of 501 billion yen ($4.4 billion) expected in 2005.

"The focus will be if the key assets of Sega's business, the creators, would be willing to work in this new environment. At the moment, I'd prefer to say that's not the case," analyst Hiroshi Kamide told Reuters. "When they talked about a merger this time last year, it was taken very negatively, and I haven't seen anything in the last year for the market to change their impression of that."

It seems that despite a huge financial improvement, Sammy's shareholders still view Sega's profitability as questionable - and perhaps fear that the merger may not function best for either company. It will certainly do wonders for Sega's bank balance, however, whilst instantly giving Sammy some serious clout globally. More as we get it.

By Luke Guttridge