Sega to Spinoff SEGA.COM Company

Here is all the good news from Sega’s teleconference today, courtesy FGN Online:

Sega.com will be a privately held, independent company and will share marketing resources with Sega leveraging the brand and installed base of two million Dreamcast systems in the U.S.

At the core of Sega.com, is SegaNet, a console gaming network, which will offer multiplayer games, chat, community, cheat codes, tournaments and content. SegaNet is also an ISP service for Dreamcast and PC users. Additionally, SegaNet will provide content on music, TV, movies, sports and e-commerce.

“We’ve got the Internet playing field all to ourselves for at least the next 18 months, during which time we will become ingrained in consumers’ lives via SegaNet and our online content, introduce them to the online gameplay experience via a console and further cement their loyalty to Sega,” said Peter Moore, senior VP, Sega.

SegaNet will launch in the U.S. on September 7 with 10-12 online games available by fall, including Quake III Arena, Sega Sports NFL 2K1, Phantasy Star Online and Sega Sports NBA 2K1.

SegaNet will launch in Canada by year’s end. Just in case you’ve been living under a rock for the last day and haven’t heard, Sega.com has a rebate program, whereby consumers who signup for the SegaNet ISP will pay only $21.95 per month. Sega.com is also offering Dreamcast for zero cost to consumers. “We believe this $200 rebate will drive consumers to retail outlets where they will purchase software, peripherals and other e-services from Sega,” said Moore.

Here are the three ways consumers can obtain the rebate in late summer 2000:

• Current DC owners – By signing up for SegaNet, consumers will receive a $200 check and a free keyboard (regardless of when they purchased their system).
• Bricks and Clicks purchasers – By signing up for SegaNet after purchase of Sega Dreamcast, consumers will receive a $200 check and a free keyboard.
• PC Users – By signing up for SegaNet, consumers will receive a free Dreamcast and keyboard.

GTE Internetworking, a division of GTE Corporation, will provide the managed Internet access services for the new SegaNet ISP. As part of the agreement, GTE Internetworking will provide national and local access for SegaNet.
Brad Huang, Sega.com‘s president and CEO, explained, “The Sega.com rebate will dramatically expand the installed base. Sega.com will benefit, as consumers will use the rebate money to purchase software and extra value-add services such as tournaments. Additional revenue streams will come from the SegaNet ISP subscriptions, advertisements, e-commerce, promotions and licensing.”

“Sega’s mission is to take gamers where gaming is going, which is undoubtedly online, but also to do so in a way which redefines an industry business model that is outdated and inefficient,” added Moore. “In the past, hardware manufacturers and publishers went through five-year life cycles of developing a platform, marketing it like hell to get an installed base, achieving the proper tie ratios between hardware and software and then repeating the process.

The Sega.com destination website will be previewed at E3 next month.

TSSZ will let you know developments on Sega.Com when they happen, and we should have public reaction for you tomorrow.