At a recent press conference here in Japan, Sega announced a major transformation from its previous hardware-biased outlook to an emphasis on software content, network capabilities and supporting rival game systems.
In other words, the "Dreamcast" shackles are going to be thrown off Sega's game developers and they can now make games for the most popular platforms and game consoles. With Sony's Playstation 1 & 2, Nintendo's new upcoming system, the entry of the Microsoft juggernaut with X-Box, the major new market for software for mobile phones, PDA's, set-top boxes, etc., the huge potential is in software. Look at the success of Konami and Capcom in recent times, two companies unburdened with trying to market hardware and free to develop games for whichever system would give them greatest return on their software assets.
This recognition of the company's core competence is also evident in Sega's decision to outsource all of its arcade game manufacturing and assembly functions. There are many small subcontractor companies in Japan with lower wage structures than Sega and greater concentrated expertize in manufacturing who can do a better job more cheaply. It leaves Sega to do what it does best; conceive game software.
Sega announced plans to increase its market share in software to 25 percent by concentrating resources on network gaming and software development. To that end, Sega aims to shift JPY30 billion in financing from third-party developers working on Dreamcast games to its own in-house software development divisions. Eventually, Sega intends to expand its current 4.2% worldwide market share and surpass the likes of Sony, Konami, and Nintendo.
Sega further revealed that it expects to post a JPY20 billion group operating profit for the fiscal year ending March 2002. This is in spite of recently announcing that it expects the current fiscal year to be its fourth straight year of operating losses. The company plans to achieve this by reducing its net operating losses on consumer hardware from an expected JPY40 billion to JPY20 billion.
Sega Private Show: "Air Trix", "Ferrari 355 2"
Well, well, looks like the rumours were true. Sega do have a "Top Skater" sequel in the pipeline, as we reported a month ago. Sega showed the skateboard sequel "Air Trix" at their private show today as well as "Ferrari 355 II" and "WWF Royal Rumble".
The star of the show was definitely "Air Trix". Unlike "Top Skater" where the player had to weave his way around the course, "Air Trix" concentrates solely on the halfpipe. The player stamps on the board front/back and left/right to achieve various tricks such as Combo, Spin and Grind. The cabinet also has a woofer installed so even the music grinds.
"WWF Royal Rumble" had its first airing. This wrestling game features famous wrestling characters such as Stone Gold, X-Pac and The Rock. There are two modes. The Exhibition mode is a tag match while the Royal Rumble mode is a free-for-all among 30 wrestlers and the last one left in the ring is the winner.
@"F355 Challenge 2 International Course Edition" features only Ferrari cars and is the follow up to "F355 Challenge". The movement of the cars and the steering is so real that Sega are also promoting it as a training machine for budding race drivers. Hope they didn't make it too tough.
Virtua Striker 3 Due Next Spring
At its private show today, Sega showed video clips of its new soccer game "Virtua Striker 3". The aim of the R&D staff was to keep the game as simple as possible while making the graphics as real as possible. The game will be based on the new hardware "NAOMI 2" and will use five times the number of polygons of "Virtua Striker 2000". The possible player movements in the game will also be twice the previous version.
The game is due to go on sale next spring and a playable version will be exhibited at the AOU Show. One good reason to make it over to Tokyo early next year.@
Sega To Make Loss For Year
Sega announced that it expects to make an operating loss for the current year. It blamed the Dreamcast price cut, the rollout of its gaming services, and higher than expected manufacturing costs for the expected consolidated net loss of JPY22.1 billion (US$204.2 million) for the year ending March 2000. This will mark the fourth straight year that the company has posted a net loss. The company's earlier projections for the year forecast a JPY1.5 billion profit.
Sega To Close Arcade Production Plant
Sega intends to close down its Yaguchi arcade machine manufacturing facility in Japan by the end of December. Sega pointed out that the smaller production quantities and wider variety of arcade machines, allied with the fact that Sega already outsource most of the manufacturing processs, means that the Yaguchi facility was running at a loss.
It is all part of Sega's efforts to drag the company back to profitability.
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