During a press teleconference this morning, Peter Moore, president and CEO of Sega of America, further discussed his company's decision to become a third-party software publisher and provider of content for multiple platforms. Moore explained that surviving in the console hardware market, in the current generation, has become appreciably more difficult than it had been. Sega's strategy in transitioning to a software development and network content company frees up its resources, primarily financially, and it will eventually allow it to return to profitability for the first time in several years.
"The real truth about the video game industry is that it is becoming harder and harder to turn a profit with a hardware platform," Moore explained. "The average loss on a piece of video game hardware is between $50 and $200. By the time the system hits shelves, most hardware companies are in the hole due to warehousing, shipping, and marketing costs. With increased development costs, someone is going to have to pay, but it certainly won't be the consumer. The opportunity is here for Sega and Sega's games to be the differentiating factor between these next-generation systems. With the hardware game becoming increasingly competitive--especially for companies like Sega, whose pockets are not as deep as our competitors--we've chosen to place our bets on our software, our heritage, and our proven track record. As a third-party publisher, we are definitely the first-round pick of the hardware companies."
However, Sega does not plan to abandon the Dreamcast, and it will support the console for the coming calendar year with more than 30 game releases in North America. According to Moore, that software support could be extended further, depending on consumer demand. "Despite the fact that we'll stop manufacturing of the Dreamcast hardware, we will continue to sell through and market the Dreamcast and its games for the next year," said Moore. "In fact, we'll market Dreamcast content as long as gamers want to buy it. I want to reiterate, especially for the Dreamcast consumers, that we will continue to have the Dreamcast for sale at retail, and we will continue to market Dreamcast games throughout this year and beyond."
Sega's support for the SegaNet online service extends even further. The network gaming portion of the SegaNet service will support multiple platforms, and Sega plans to release online games, supported by SegaNet, on multiple consoles. Naturally, this will depend on the network gaming strategies of each specific hardware manufacturer. "Utilizing the SegaNet network, Sega will be able to bring network gaming to virtually any platform, from video game consoles to Internet devices," said Moore. "SegaNet also provides other revenue possibilities to the company via subscriptions, commerce, and advertising. This will allow us to become a profitable company quickly and a worldwide leader in network entertainment."
Moore further confirmed that the company is already in possession of PlayStation 2 development kits and has been for several months. In fact, Sega plans to release games on the PS2 and the Game Boy Advance by this year's holiday season, perhaps as early as August. Negotiations regarding support for the Microsoft Xbox and the Nintendo GameCube are ongoing, and certain games, particularly ones from Sega's nine development studios in Japan, may appear exclusively on a particular platform. Moore further confirmed, during the Q&A session following the teleconference, that Shenmue II could be released as early as November of this year, and that its Sega Sports lineup, including NBA 2K2, NFL 2K2, and NHL 2K2, could be released on other platforms, along with the Dreamcast. Finally, Moore reaffirmed the company's earlier comments regarding the inclusion of a DC chip in Microsoft's next-generation console by saying that, "There is absolutely no truth to the rumor that the Xbox will contain a Dreamcast chip."
Audio for the entire conference, in three seperate parts, is presented below in the media section.