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10 Reasons Sonic & SEGA Are Not Dead

Donnie
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There has been a lot to take in this morning and things are still developing even now. So much so that things may have been cast aside or misread from the overwhelming amount of information surfacing. A lot of people feel that Sonic, and perhaps even SEGA, is dead due to the actions SEGA is planning. However all is not lost. Let me explain why with ten specific reasons.

1. SEGA’s Subsidiaries Are Okay – A lot of what we’ve read is applying to SEGA of America and a bit from SEGA of Europe. However it was reported that Creative Assembly and Sports Interactive will come out “relatively unscathed”. Atlus, despite no official word that has come out on their future so far, is owned by SEGA Sammy which is basically SEGA of Japan. Relic is stationed in Canada. Nowhere in the statements provided earlier does it suggest any impact on any of these developers. It is safe to conclude that none of them will be affected by the restructure.

2. It Won’t Be Strictly Mobile – Mobile gaming has been taking off. SEGA has been able to capitalize on this. However it will not stick with just mobile. The PC platform was also mentioned in SEGA Sammy’s statement.

SEGA has positioned Digital Games, centered around smart phone and PC online gaming, as a growth area

3. PC & Mobile Are SEGA’s Strong Points – That quote brings me to reason number three. Console gaming is no longer the selling point that SEGA once had. They are doing much better on PC and mobile. Because of this it isn’t so surprising that they have decided to target those two. Why waste resources on what doesn’t work, and what hasn’t worked for a while, and improve on what does?

4. SEGA Is Not Exactly In Financial Ruin –  This may come off as quite contradictory to previous articles but, as previously stated, the news has been focused more on SEGA of America/Europe. They are financially troubled but not SEGA as a whole. There’s a certain other SEGA division across the globe in Japan. And it’s taking off. SEGA of Japan is popular, rich, and widespread. Games like Puyo Puyo and Hatsune Miku are selling majorly in Japan.  SEGA merchandise in Japan is everywhere. SEGA live streams, such as the one from last year’s Tokyo Game Show, don’t get a mere few thousand viewers. They get 300,000+. It’s safe to conclude that SEGA of Japan is just fine. They’re not going anywhere. In fact even if the rest of SEGA’s divisions died out SEGA of Japan could even hold on their own and survive. This doesn’t even count the money SEGA Sammy has. Remember when they bought Atlus for 14 billion yen? Right now their stocks are rich. This restructuring is nothing more than a footnote to them. The $900,000 or so capital previously reported is also somewhat misleading. Why? Because SEGA isn’t the one doing selling or buying anything. It’s the far richer SEGA Sammy. So it’s no surprise that SEGA has a capital like this. Because they’re not the ones in need of a higher capital. SEGA Sammy is pulling the ropes, not SEGA.

5. Sonic Is Getting “Reinforced”, Not Cut Back – The details about SEGA focusing on PC and mobile gaming may have mislead those concerned about Sonic. It’s not getting cut back. It’s not dying. In fact SEGA Sammy specifically mentioned Sonic in their statement

the Sonic and merchandising businesses will be reinforced to establish a structure which can generate stable profits

Business uses a lot of lingo that may not be familiar to the average person but to “reinforce” something in business is not quite the same meaning as people may expect. To “reinforce” something is to change its behavior. Sonic is not generating stable profits. It’s all over the place. So SEGA Sammy intends to establish a plan that can change this. In other words it is putting its foot down on Sonic’s financial roller coaster.

6. Only 2 SEGA Divisions Are Impacted – As previously stated SEGA of America and a bit of SEGA of Europe are feeling some kind of impact from this and SEGA’s subsidiaries will dodge a bullet. However it’s only these two divisions. Nowhere was SEGA of Japan, SEGA’s main base of operations, intending to change. SEGA Sammy isn’t changing itself but more so what it owns. It’s a bad hit for SEGA of America, but only SEGA of America is reeling from this. In fact in SEGA of America’s statement they clearly say:

This move was crucial to keep SEGA operations moving forward throughout North America

So the focus is mainly on SEGA of America. No one else.

7. SEGA Console Gaming’s Future Is Only “Unclear” For Now –  The “PC and mobile gaming focus” statement may have, once again, been misleading in this aspect. While the focus is most certainly going to be on those two platforms there was never any line of dialogue in either statement that said they were putting an end to publishing games on consoles. They’ll be downsized in frequency, yes, but not killed. There’s still a possibility at this time of a console Sonic game. Just don’t be surprised if you see a lot more mobile and PC games from now on. Likewise console gaming is still doing fine in Japan despite the growing interest in PC and mobile. It may be the end of an era still as console gaming is no longer a focus like it has been for 14 years but it’s not quite what it seems.

8. The Currently Announced Games Are Fine – Games like Yakuza 5 are not going anywhere. They’re still getting published on their respective platforms and are still scheduled to release like before. Stuff unannounced isn’t so safe but SEGA’s currently known lineup of games is safe.

9. The Focus Has Technically Been In Effect For Over A Year – Think about it. Other than the occasional Hatsune Miku, Sonic, and Alien game where have 80% of SEGA’s games in the past two years have gone? Mobile and PC. The restructure was announced last year but only hit the mainstream today. So what does this mean? We’ve already been experiencing that shift towards PC and mobile gaming. It was just made official.

10. The Entire Plan is To Downsize, Not Kill – This one is a little more up for debate but if what I’ve explained hasn’t already hinted to this it’s evident that the entire restructuring plan isn’t to destroy anything. It’s to tone it down. SEGA of America isn’t dead yet. Just smaller. Games will still be coming out like always. They’ll just be more selective on platforms.

The bottom line? What was lost are the 300 people who are, unfortunately, getting their jobs cut and the San Francisco HQ that SEGA of America is giving up to relocate elsewhere. Sonic is going to keep on chugging. SEGA, especially, is still going strong as a whole. But this isn’t the end of the world. SEGA will be focusing on what has been strong for them while paying less attention to what hasn’t. As previously stated, it’s not a killing but a toning down. Does this essentially mean a killing later on? That’s up for debate. But Sonic and SEGA will be alive by the end of the year. And, considering movies are in the works for Sonic and other SEGA IPs, there is no rest in sight. SEGA of Sammy is putting its foot down them but not kicking them out the door.

 

This post was originally written by the author for TSSZ News.

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Donnie

Donnie

A chao that wears a news reporter hat, Donnie has been a part of LMC since 2012, LMC's main news writer Donnie is also a part of the Uncutting Crew commentary series.

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36 Comments

  1. Maybe a Windows 10 exclusive? Through my MSDN account, I’ve been trialing Windows 10 and I must say it is going to be the biggest rebound for Microsoft in the company’s history.

    1. SEGA will unveil its full restructuring business platform on February 12th a day before AOU. A full fledged press conference and press release will take place on that day.

      Like I said, Sega is establishing two new divisions: Sega Networks Corporation,Inc and Sega Entertainment Corporation,Ltd Worldwide.

      As for Sega of America, they are moving to L.A. Part of the deal is to set up a suite near Santa Ana,CA so that Sega Networks America can work closely with Hollywood studios and other partnership companies.

      Which probably explains why the Orbi Yokohama brand is multi branded: https://trademarks.justia.com/855/17/orbi-85517210.html

      As for the Amusement Layoffs, I did some digging. It pertains mostly to the actual software R&D dept at Sega who’s Amusement resources are being moved to SEC,Ltd. The company is planning some major unveilings and surprises at AOU. PR and details shall also be disclosed at the Garage Kit Festival “Wonderful 2015” In Tokyo next Sunday. Sega is using Hatsune Miku and Sega Hard Girls to promo.

      As for PC, Sega has 2 new Total War games planned as well as a new Shinning Resonance Arcade game and Steam game planned.

      1. I am hoping for a direct-to-PC MAIN SERIES Sonic game release. With them now publishing on the Windows Store and Steam, it shouldn’t be that hard.

  3. I am not happy with the way Sega has been conducting its business; it seems like a toxic environment to work at (and I feel sorry for folks who are being let go over this), and there is very little control over quality.

    However, their decision to focus on PC and mobile might be for the best. I am pretty sure first-party publishers like Nintendo, Sony, and Microsoft and potentially third-party publishers will localize and publish console titles, so I do not believe this is absolute end of console support. Furthermore, PC and Mobile are relatively low risk affairs compared to publishing packaged titles.

    With that being said though, Sega has been constantly restructuring since the end of the Dreamcast, which creates a toxic environment of uncertainty for workers, and not to mention prevents them from reaching any long-term goals (since with every restructure that seems to change). I seriously hope they choose a well thought out model and stick with it. Unfortunately, however, knowing Sega’s recent history, I doubt this will happen.

    1. It actually is the end of console support. Sony,Microsoft and Nintendo don’t own those IPs, so they will be unable to do what you assume without clearance from Sega Alliance. Sega sees little control and royalties from such a thing anyway.

      Sega of America has been in shambles for years. They aren’t the innocent party you think.

      1. Oh my assumption of course was that they get clearance from Sega and Sega would get something in return if such a thing hypothetically happened (like you say, Sega might not benefit much at all so they may opt not to do such a thing).

        As per your comments on Sega of America, I must say I agree; though I did not understand how bad things were until I actually read what some of their former internal employees had to say.

  4. Seeing how this is relevant here as well, some quick copypasta:

    I believe turning to the PC and mobile market is an extremely smart move because of the mass availability of PCs and mobile devices. Everyone owns a PC (1 billion PCs actively in use worldwide) in some form, either a tablet, 2-in-1, laptop, desktop or Steam machine and everyone has at least one mobile device, principally smartphones with either Android (over 1 billion Android devices worldwide) or iOS (800 million shipped iOS devices). To go to show PC gaming isn’t that bad, a modern Wintel laptop has 1.5 to 2 times the graphics throughout of an Xbox 360 (Intel HD 4400, Intel Iris).

    For me, it is kind of a dream come true, leading to this question I hope will be answered with a resounding “yes!” in the end: Will the next main series Sonic game have a direct or day one release on PC? I have been waiting for this sort of thing for years, and I do mean years. Ultimately, if Sega plays their cards right, they could get a good portion of the pie, financially speaking anyway, especially with services such as Steam being as wildly popular as they are:
    http://www.joystiq.com/2014/01/15/steam-has-75-million-active-users-valve-announces-at-dev-days

    1. 75 million / 1 billion. That’s quite the jump. The Xbox 360 alone has the exact same install base.

      True, next gen hasn’t caught up to those numbers yet (but given Sega’s track record, I’d say a dangerous and experimental next-gen Sonic game this early on would be a very bad plan), but I’d wager you could reach a better audience that way. Steam may have that many active users, but what percentage of them are actively playing modern games at reasonable settings? Steam has a lot of indie and humble bundle content that doesn’t require as much graphical/processing power as a modern Sonic game would. Perhaps it might also be worth comparing the sales of, say, Sonic Generations on PC to its console counterparts… Yikes.

      Not even gonna pretend to argue with you about the downsides to mobile (which greatly outnumber even the most optimistic hypothetical pros)

      1. “Perhaps it might also be worth comparing the sales of, say, Sonic Generations on PC to its console counterparts… Yikes”.

        The only thing we have on the PC sales of Generations is the numbers for the packaged retail version which according to VGchartz sold 100k; but that is not a good measure because most sales on the PC most likely came from Steam, and we do not have any Steam sales data; thus we cannot make a good comparison at this point.

        I would also like to add that Sega is most likely choosing to focus on PC because publishing costs and hence risks are a lot lower and you also cut out the additional costs and risks associated with porting. Ultimately, I would have liked for them to continue to support consoles but given SOA’s (or whatever they are called now) financial situation, that is probably out of the question, at least for right now.

        1. Admittedly, I only spent all of 60 seconds googling that info, but that’s good to know.

          Obviously PC releases have fewer risks, but I still wonder if they’re the way to go to reach Sonic’s target audience (and if Sega still believes it’s kids, one has to wonder how many of those Steam accounts are registered to people under 18).

          I’d be all for digital only distribution, if that helps, but I’d still rather play Sonic in my living room without having to drag my tower around. For your average steam user, it would be a lesser experience.

  5. ~15 years later I’m going to America and reviving Sega as a whole from there. I have my plans and ideas that will make this come true. Sega as a whole and Sega of America, please hold on until then 😀

  6. Well, I only would like Amy Rose’s former American VA, Lisa Ortiz, to return as her: as for the rest, Sega should keep continuing making excellent Sonic stories/adventures!

  7. … … … Let’s see where this all goes. I call this the second biggest story of 2015. The first one being the official cancellation of Sonic 4 Episode 3.

    1. Woah, woah. This is “only” the second biggest story of the year when (a) Sega’s available capital is an all-time, dangerous low, (b) 300 Sega of America employees laid off, including Stephen Frost and other big names, where there is also clear evidence of an extremely poor and hostile work environment and (c) the relocation of Sega of America’s headquarters from its current spot where it has been for almost 20 years? I’d say this is the biggest story of this decade so far. Yes, SSF1991 is trying to give us hope because the above reasons, but I know there are much more than 10 reasons Sega could be killed and sold off this very minute. This transitional year is going to be absolutely crucial to us seeing anything at all of value from Sega for the Sonic franchise in the future.

      1. Sega is going nowhere. Full details will be disclosed on February 12th.

        Sega Networks America’s location will be in Santa Ana,CA. There’s still an old Home console warehouse there.

        1. Doesn’t matter. No money means no money. If SEGA is not profitable for the mothership, they will cut it at the umbilical cord without thinking twice and move on. This is the modern corporate world, not a confederacy of big time, affluent gamers who will show mercy to something because of a childhood pastime. They could care less if us gamers are whining and left wanting. They even laid off Stephen Frost, after all. That’s pretty high up there in the employee roster. These days, SEGA is all about quick cash and more of it, not pleasing their lifelong loyal fans.

  9. So basically the Sonic franchise is on life support, but it isn’t it dead. So basically smart phone games and small PC digital titles like Sonic 4 are the future of the series?

    Here’s hoping that Runners looks good.

    1. No, not even close. Sonic isn’t on life support. They are trying to reinforce the brand so Sonic’s profits aren’t all over the place, but they specifically cited Sonic in the article and made it very clear they have huge future plans with Sonic, they’re just trying to clear up some of the mess so Sonic is more stabile.

      Sonic isn’t on life support by any means of the word. SEGA of America is on life support, though.

      1. So basically the Sonic brand will become about cheap Digital and mobile games. I’m literally running out of fucks to give about this series.

  10. I do think the reasons in the article were good, and with that, I can see why Sega won’t die, and that they are mostly okay. However, even with all of this, I still can’t help but think that these are dark times for Sega, mostly for Sega of America.

  11. We’re currently sitting on 30 signatures at the Stephen Frost petition. Please guys, you know how well and how much Frost has helped the community. His enthusiasm and undying dedication to the series helped us get where we are today. Without him being there, I know all the games, whether bad or good in your book, would have turned out much worse. Just take a moment to fill out the petition. While you’re at it, also share it from the same page. Consider it your good turn for the day, good karma or brownie points. Visit this link now and help make Frost’s day (and year):
    https://www.change.org/p/sega-keep-stephen-frost-at-sega-of-america

    1. Just as clarification to everyone here wondering about the Stephen Frost petition:
      https://www.change.org/p/sega-keep-stephen-frost-at-sega-of-america

      We are making a statement here: we, as their own customers, care for their own employees more than SEGA themselves. That is just to openly go out and prove how very insensitive and out of touch (the non-politically correct term others would use is “evil”) of a corporation SEGA truly is.

      Yes, we are helping Steven Frost out which is the primary focus here, but the overall theme or lesson to be learned is that this should not be happening to begin with. To be quite frank, the more publicity and signatures this petition gets, the more greedy, racist and heartless we make SEGA out to be.

      Accomplishing either goal is a win-win in my opinion. Besides, employees knowing we really do care for them in spite of their employer’s lack of competence makes those employees realize we are in it for more than a game alone–we value them and their hard work. In the end, we will earn their mutual friendship and trust as a result.

  13. Question for you, Donnie: Would you say that SEGA’s financial success and widespread popularity over in Japan is the primary reason as to why Sonic, SEGA, and even SEGA Sammy as a whole haven’t been (and probably never will be) bought out by another company like Nintendo, Sony, or Microsoft?

  16. I don’t give a fuck about any game of Sonic if it’s on PC or Mobile.

    Thanks a lot for making Boom the final console game ever.

    You fucking hacks.

  19. Sega’s brand has been weakened to the point where many people don’t even know they exist (disastrous for marketing, and a likely cause of poor sales).

    They treat employees badly; the harder you work for them the worse they treat you. Yu Suzuki, who worked his ass off for them, was dumped like a piece of trash.

    Their internal studios are almost all dead, they outsource almost all their games now and rely on EA and Eidos OPs in the West. With Outsourcing, disasters like ACM and Sonic Boom become innevitable and unavoidable. Expect more.

    Sega is retreating back into Japan, under Sammy and the parochial insular Nagoshi (a man who has not made a globally popular game in over a decade). Ironically a company founded by Americans will soon be a dead brand outside Japan. This is exactly what SoJ wanted.

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