Sega President Irimajiri Speaks

In a recent interview with IGN Dreamcast , the president of Sega commented on various issues:

Irimajiri first took a stab at explaining the widely different sales stories in Japan and overseas. Regarding the system’s brisk sales in America and Europe, he stated that the system has already sold 1.65 million systems in America and an additional 650,000 in Europe. The American figure puts the system beyond Sega’s initial target of 1.5 million units by March 2000. In Japan, according to Irimajiri, the system has also sold 1.65 million units, but it will likely fall short of the company’s planned two million units sold by March 2000. Irimarjii attributes the shortfall to Japanese players being “fed up” with conventional software, citing the strong sales of Seaman as an indicator of what an unconventional game can do in the marketplace.

Regarding Sega’s upcoming battle with Sony, Irimajiri stated that, despite the Dreamcast being priced more competitively than the PlayStation 2, he recognizes that the Japanese consumers tend to prefer brand names over monetary value. “Our medium-term marketing strategy for Dreamcast will thus place more priority on network-related functions and less on games,” said Irimajiri. He continues, “A domestic subsidiary focusing on network strategies will begin in May working on a system enabling players to enjoy games and chat online.”

When asked about the difference between Sega and Sony’s policies towards network strategies, Irimijiri revealed his belief that Sony is emphasizing content distribution while Sega will be promoting fee-based online forums. “Our approach will make for tough going in the first year,” said Irimajiri, “but should contribute to profits from 2001.” In order to ensure that the strategy will work, Sega will be outlaying plenty of cash, with the cost of servers alone running at 2-3 billion yen.

Finally, Irimajiri commented on Sega’s financial state, and where the company will turn if things should go bad with cash flow. Apparently, half of the 80 billion yen in convertible bonds issued last February have been converted because of the recent rally in the company’s stock price. Sega also has seen an unrealized profit increase thanks to the strength of stock in ASCII Corp. and CSK Corp. These shares can be sold if any problems are encountered in cash flow.

Irimajiri ended with “Our financial condition is totally different from what it was a year ago.”

In other Sega related news, AM2’s Shenmue is selling at a great pace, getting over 380,000 units sold from December 29th through January 2nd. Will the trend continue? We’ll let you know.