Irimajiri: Leading Sega's Future

On February 12, Shouichirou Irimajiri, the newly appointed president of Sega Enterprises, held a press conference and later a Q&A session with Japanese game magazines. Here is an excerpt from that Q&A:

Q: You moved into Sega from Honda five years ago. What lead you to that decision?A: I had two main reasons. On my first visit to Sega, Yu Suzuki showed me a prototype of Virtua Formula and let me play the game. Actually, I didn't take video games seriously at that time. But I was really surprised when I sat in front of the game. I thought if this industry continues to develop this momentum, it will be a huge industry - and I'm not wrong about that.

Secondly Nakayama, then-president of Sega, asked me to join Sega. He said, "We have two main businesses: the arcade business - it will no longer be just a Game Center, it will be more like a hi-tech theme park which has more attractions; and the console business - it will fuse other media into it and will correspond to the multimedia era. It can't be done with one person. Please lend us a hand."

I believe his vision is right.

Q: What are your impressions after your transition from the motor industry to the game industry?A: The automotive industry is fairly mature. At all points it works very systematically. So you can predict the future of the market quite well. For instance, if you develop a new car (which will take at least three years or so) you have to forecast the market three years ahead, and you'll almost never be wrong about the forecast.

In the video game industry, however, if a game sells well, it could be more than 300 percent ahead of expectation. But if it's bad, sales could be zero. I learned after I joined this industry that in the entertainment business, even if you try real hard, it doesn't mean the hard work will pay off.

Q: As president of Sega, is your priority task the rebuilding of consumer business ? A: My first priority is rebuilding the consumer division worldwide. The key to the success is how we grab the "light users" or people who don't play games.

At the same time, from a midrange view, I think the amusement business is at a major turning point. Although we have already a large share in the business, it's important to increase the market itself. Technology for console games is developing - and it almost surpasses the arcade technology. If left alone, the market will shrink. It's also important to grab the arcade "light users" as well.

In both businesses, the key is how we broaden our customer from core Sega users to others. We also want to secure our footing as a PC games publisher.

Q: According to previous statements, you said that to make the consumer business a success, you will try to create a synergy effect with the amusement business. Could you give us a concrete example?A: I think we can show you within half a year in various ways. I can't tell you exactly because it's related to our next console. Technologically speaking, the consumer, arcade, and PC markets are closer than they've been before. So I think we can do a new kind of business for games. There's no point in president if we don't change. I want to steer Sega in the directions an entertainment company in the 21st century should be headed.

Q: Could you tell us about how you'll change Sega?A: I want to make sure that every one of our employees thinks about things from a customer's standpoint.

Q: We heard that you will make a slot for a full-time producer. How is that different from the current system?A: As I said earlier, this is to think about things from a customer's standpoint. For example, currently our board members decide which title to develop or not. But there's quite an amount of disparity in age between members, including me, and the people who actually buy the game. It's hard to meet our customers' needs. So I want to have the people who can meet our customers' demands make the decision.

I'll commission them as a president and let them develop what they want at their own responsibility.

Q: Some reports say that you are thinking about a division for software development as a separate firm.A: That's not going to happen right away. But as a part of the restructuring of our company, I'll separate both a platform holder and a publisher out. Sometimes these aspects are ambivalent. From a third party's standpoint, the platform holder is a partner, but developer or publisher businesses are rivals to them. This might be unneighborly for them. So I'll divide those divisions.

Q: How do you plan to convince other companies, including other business sectors, to do business with Sega?A: If software companies joins us, we want their titles to sell well and we want to support new technology that they've never used before. We can provide them an opportunity to enter new ballparks that they haven't before. Anyway, if you join us, you can make lots of money (laugh).

Q: Publicity and ad promotion is really important for a home gaming console. What do you think about that aspect?A: In the automotive industry, if you develop a brand-new car, it takes millions of yen, and it takes millions more yen for ad promotion. Sometimes the promotion cost will be more than the development cost. This is a characteristic aspect of a mature industry. The consumer business is also a completely mature one, so we are aware that marketing and promotion are important and we weigh heavy importance to them. These things will be different from the current Sega.

Q: You also hold concurrent posts as chairman of Sega of America since 1996. How do you assess the Saturn business domestically and overseas so far?A: In Japan, it was a successful one. We barely had a market share during the Mega Drive period. Saturn has already sold five million units and we have earned enough money. As for the overseas market, frankly speaking, it isn't even established. It was completely wrong from the beginning. We thought that people wouldn't jump in with Saturn because it was expensive, so we decided to make an inexpensive booster for our successful 16-bit console so that it was possible to make 3D games for it , but it failed. And the effects lingered to the year after when we started the Saturn business. The launch stage of new hardware is very important for the consumer platform business.

Q: After the next system is released, what will happen to the Saturn business in Japan?A: I can't tell you about the things related to the next system, but the Saturn will remain supported. We have five million users out there. We have a responsibility to continue to support Saturn. We'll release a certain amount of titles for it. We have about 120 Saturn titles for this year alone - all of really high quality. We want Saturn users to continue enjoying their Saturns. We'll provide good products as much as we can.