56 MCV 11/06/10
MCV INTERVIEW MIKE HAYES, PRESIDENT, SEGA WEST
Sega’s master plan
With Sega’s Western re-structure now complete the publisher is looking to grow its business on PS3 and 360 and became a leader in the digital space. Christopher Dring discusses social networking, the state of PC and the future of gaming with Mike Hayes, the president of Sega West…
How is the Sega West restructure coming along?
It is still early days but so far everything seems to be settling down. All the new positions have already taken effect and so far so good. Everybody has understood what the changes mean and everybody seems relatively happy at Sega. It is a good start.
Why choose London as your Western base for sales and marketing?
It was driven by the fact that the European office in London worked very much on a centralised basis anyway. It is used to having a central brand group, a central business planning group and working with the territories in an efficient way.
Considering the key people in the restructure – Gary Dunn, Gary Knight, Gary Rowe and myself – are all London-
based, it logically made sense to put the business here in London. Our expertise in terms of digital is in San Francisco, plus of course our relationship with Microsoft, Apple and all the social gaming companies are very Californian- based. It all naturally worked itself out without much head scratching required.
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Your restructure brings about a renewed focus for digital. What aspects of digital are most exciting for Sega?
Digital is quite a poor expression because all the games we make are digital. All the parts of it are interesting for us. DLC is a rapidly growing part of
the business. As you know we’ve had a lot of success with our heritage titles on Virtual Console, XBLA and PSN. We’ve had success on iPhone and iPad. That is all very good. But we plan to grow that even further.
I think one of the biggest and most exciting challenges is social gaming, and I think that’s the case for most other publishers. We are all rushing to the hills to dig the gold out and there is definitely an opportunity, but it is needs good consideration and a lot of planning to how it can be profitable.
Social network gaming was mentioned in your financials, and it’s a space EA has recently entered into by purchasing PlayFish. Would you also consider taking the acquisition route? The Top 25 social games do not come from traditional publishers, so there is a
Piracy is the scourge of the industry and we will do whatever we can to combat it. We can never stamp it out –but we can delay it. Mike Hayes, Sega West
expansion and that whole market is just going to grow and grow. The issue for traditional publishers is they don’t have a natural right to be in that area, and if we do more of the same on these platforms we will fail. We need to be very careful and fleet of foot to compete with a lot of creativity in the digital market. It is interesting, as the cost of building mainstream games goes up and up and up, the days of small clever groups creating very effective gaming experiences has returned. It is almost like 15 years ago. You’ve got people that can design and produce content very quickly and be very innovative. The challenge for us is not if the market is big enough, it is how we adapt to be part of it. But we’ve got to view it profitably and not believe we have a God-given right to think we will get all this money from a set of very exciting emerging platforms. It is exciting and there is a huge opportunity, but we have to be very smart in how we approach it.
180 degree change of expertise that is required in how to make games for that arena. EA has been big and bold, as they always are, in buying PlayFish, which makes huge amount of sense as it immediately gives them a gateway to that new world. But there are other ways of doing it, which is picking off the best people and creating your own business. We’d never say never and we are keeping an open mind. But right now we are looking at the more organic growth method.
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Are you concerned there isn’t enough room for everyone in digital? There is enough room for a lot more
Mario and Sonic at the Winter Olympics was cited as a sales hit – but did it perform as well as expected? We were quite unpopular with other publishers around October because purchases of our products were so high and a lot of retailers spent a lot of their Wii and DS Euros on us. And therefore they said ‘Oh, it hasn’t done very well.’ The only thing with Mario and Sonic at the Winter Olympics, as you would expect with gift-based products, is that it all started a little later than perhaps we and retail thought.
Expecting massive sales of a family gift-orientated product around mid- October is where we went wrong. Did the game then accelerate and meet expectations in the following few
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