Sega Consumer Conference

At Sega's recent consumer conference at the TGS, the company outlined its multiplatform plans. The presentation kicked off with a speech by COO Tetsuo Kayama, who stated the company's goal to be the number one entertainment provider of consumer and network games. He outlined Sega's steps toward achieving that goal and returning to profitability.

Kayama stated that the company plans to sell 35 million pieces of software by 2003. To reach that figure, he stated the company would enter into a partnership with THQ to have them distribute Sega's Game Boy Advance titles to reduce costs. In addition, he presented Sega's software plans. The plan consisted of a five-pronged approach focusing on action, vintage, original content, character licenses, network games, and strategic alliances. The action software would consist of Sega Sports titles, continued development of key franchises such as Virtua Fighter, Crazy Taxi, Sega Rally, and House of the Dead, and continued development of original console characters such as Sonic the Hedgehog, Ulala, and those in the Sakura Wars series. The vintage software plan would focus on content created from revisiting established Sega franchises, and Phantasy Star Online was held up as an example of how the approach would work out. Space Harrier, Nights, D, Enemy Zero, and the Shining Force series (Kayama noted the recently announced Shining Soul for the GBA was a step in that direction) are also games that call on the company's software heritage. The development of original content was highlighted by the recently released Super Monkey Ball on the GameCube and Rez, UGA's upcoming game. Kayama stated that Sega would release 10 original titles in 2002 and increase that number to 15 original titles in 2003. In terms of percentages, Kayama stated that roughly 30 percent of Sega's content would be originally developed titles. Sega's plan on creating games using licensed characters was a bit more vague, but Kayama stated an announcement would be forthcoming with details. Sega's network game plans included creating content for open devices, such as PCs and mobile phones. The company views its biggest competitors in the PC market to be Koei in Japan and EA and Havas in the US.

On the subject of returning to profitability, Kayama discussed the future of the Dreamcast, which offered a few more unpleasant surprises to owners of Sega's final video game console. Stating that the 10 million pieces of hardware, which had been named when the company announced its withdrawal from the console market, had shipped, Kayama outlined Sega's reevaluation of Dreamcast support. Citing weak software sales for the platform, he stated that two titles slated for release in the Japanese market, Propeller Arena and Metropolis Street Racer, had been canceled. In addition, development of House of the Dead 3, originally announced for the Dreamcast earlier this year, had shifted to the Xbox. To reduce losses associated with the system, software sales would shift over to Sega's D-Direct service. Upcoming titles for the Japanese market, including NFL 2K2, NBA 2K2, and Space Channel 5 Part 2, will likely be available only via the online shopping service.

Lastly, Kayama outlined Sega's strategic alliances with a variety of companies. A partnership with Sony Computer Entertainment as a network partner will bring Internet TV to the PS2 in Japan. Sega will partner with Microsoft for several projects, in addition to a network partnership with the Zone.com and a PC software alliance in North America. Sega developer AM2 will work with MS to create an arcade motherboard using Xbox hardware, and a sequel to the classic driving game Outrun will be among the first titles to use this new arcade hardware. Another Sega developer, Sonic Team, will also work with MS as it develops broadband support in Phantasy Star Online for the Xbox. Sega will support Nintendo by providing content for the GameCube and Game Boy Advance. In terms of how Sega would support the various hardware makers on the market, Kayama stated that the company would view them as individuals rather than focus on their user-base numbers.