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Sega, Nostalgia, and Competition
July 14, 2003

Well, the Editorials section is chugging along slowly but surely. Iím still experiencing a general lack of material, with only one editorial in reserve, so Iím counting on all you readers to send in your contributions. This will also help prompt quicker updates ::hint hint:: Today weíve got three editorials ranging from the topic of business to nostalgia. Chris Winkler gives us his outlook on Segaís past, present, and future business, while Phillipe Richer prompts us to replay our old games and Paul Tipton muses on how the little guy can manage to take on the big corporations in this wonderful society of ours.



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Sega's Future

Sega has received anything but good press over the last couple of the years. While its last two consoles, the Saturn and Dreamcast both boasted an impressive line-up of highly innovative and critically acclaimed titles, they failed to deliver any profit. Instead, they forced the company's management to abandon the hardware business, and become a platform agonistic 3rd party publisher. Last year, the company overestimated sales of its Visual Concepts-developed sports titles and 50% of the 106 games released during this last fiscal year were unprofitable. To make things worse, once popular titles like Sonic or Phantasy Star Online Episode I and II did not manage to capture the hearts and bucks of Americans anymore; as Sega watched, its share on the world's largest market was steadily declining.

Despite negotiating a merger with Namco and Sammy, Sega is still on its own. Just days before negotiations with Sammy broke down, Namco had run out of patience, setting an eight day deadline for Sega to come forward with a proposal. After this proposed merger fell through, and the rumored takeovers by US giants Electronic Arts and Microsoft did not materialize, it quickly became evident that Sega had to survive on its own. Speaking during his company's shareholders meeting last month, Namco chairman Masaya Nakamura likened Sega's management to a kindergarten. Already before that comment, Sega president Hideki Satou, taking the blame for the failed mergers stepped down from his post. So, will Sega end up like the recession-rattled Japanese economy in the 1990s? The answer may surprise some people, as things are not looking as bad as they seem.

Following the recent industry trend of younger presidents taking over from elder ones (see Square Enix's Youichi Wada, Namco's Kyushirou Takagi, Nintendo's Satoru Iwata), former Hitmaker CEO Hisao Oguchi will succeed Hideki Satou as Sega president. In his first interviews, the 43-year old mapped out his vision of a new Sega. Apart from an internal restructuring, which we will discuss later, Oguchi stressed the importance of a sales and distribution cooperation with a large US-based publisher (read Electronic Arts) as well as the need for more titles developed specifically with a western audience in mind in order to regain some ground on the North American market.

As far as internal restructuring is concerned, Sega plans to scale down its workforce and reduce the number of its (Japanese) development teams from nine to seven by October 1st. Which of the nine famous development studios (Sega AM2, Sonic Team, Overworks, Amusement Vision, United Game Artists, Sega Rosso, Smilebit, WOW Entertainment, Hitmaker) will be disbanded by then has yet to be revealed, however it seems as if Sega is poised to undergo its second major restructuring within a couple of years, following its decision to opt out of the hardware business two years ago. In the meantime, the company predicts that during the current fiscal year only 20% of its titles will be unprofitable and recent sales figures seem to support this claim: Smilebit's J-League Pro Soccer Club wo Tsukurou 3 for PlayStation 2 will most likely reach the 500,000 plateau in a matter of two weeks, while the PS2 adaptation of the popular arcade racer Initial D Special Stage easily outsold the ones like Hanjuku Hero VS 3D, Dynasty Tactics 2, Dino Crisis 3 or Viewtiful Joe on its June 26th release, with first week sales exceeding 180,000 copies.

So, how will the future look for the "new Sega"? While in the current phase of consolidation mergers are always a possibility, nobody should be surprised if Sega stayed around on its own for the next few years. As the example of Square Enix has illustrated, a sound financial situation in both companies is still the preferred merger scenario. In a recent interview, Enix founder and chairman Yasuhiro Fukushima mentioned Enix had already been looking to merge with Square two years ago. The problem? Back then, Square was in the middle of a two-year financial crisis, prompting Fukushima to take a wait-and-see approach. Similar statements regarding Sega's situation were made by both Namco and Sammy after the merger talks broke down two months ago.

Critics will be quick to point out a lack of innovative titles in Sega's recent line-up. However, as outlined in previous editorials, innovation alone does not yield any financial success, and of all companies in this industry, Sega should be most aware of this fact. That being said, ports and remakes are definitely no answer to the company's current woes (as recent Sonic and Phantasy Star Online ports/remakes have demonstrated). Releasing Sonic Heroes on all three major platforms, however, is a first step into the right direction, as the series' GameCube and GameBoy Advance exclusivity did not exactly help its sales. In this way Sonic might finally catch up with Sega's other major franchises, such as Virtua Fighter, Sakura Taisen and Tsukurou, all of which have enjoyed reasonable success over the past two years.

Regardless of its reputation for developing highly innovative titles, the company will need to improve its marketing and distribution. Teaming up with Electronic Arts in the US might surely solve some of the problems in those departments. Given last (fiscal) year's strong performance in the arcade division and the resulting profit of 300 million yen, Sega's future looks brighter again, provided the home software division figures out how to combine its creativity with commercially successful concepts. Looking at the challenges ahead, one only wants to wish Hisao Oguchi all the best to restore one of the industry's most renowned companies to its former greatness.

- Chris Winkler

Damian:

Some more excellent industry analysis from Chris W. The world of video game politics is a strange and often baffling one. Whatís more, the way the Japanese corporations behave can differ wildly from how our American corporations work. The Japanese are much less willing to take a chance on financially unstable corporations, while risk-taking is often the hallmark of American business practice. Iíd very much like to see Sega stay on its own and retain all its divisions, but the quest for financial solvency might just overshadow the companyís devotion to bringing out the new and innovative, especially if they are looking to merge with another corporation. Letís just hope that Sega can manage to keep afloat after all is said and done.

 
Fleeting Memories

Nowadays, different RPGs are released several times a month, every month of the year. With many of the old school gamers growing older and undertaking more responsibilities in life (work, school, dating, etc.), many find themselves confronted with the single most dreaded problem of every RPG enthusiast: lack of time. For many younger gamers, the main obstacle in their way to endless gaming might well be money, but for many of us, time itself has become the biggest hurdle in our path to gaming bliss. Nevertheless, we try our best to play the newest RPGs, trying to keep up with the surge of new experiences readily available for our enjoyment in exchange for a measly sum of money. However, it appears to me that many people are lacking the spark and the desire to truly understand and fully exploit the potential of their games. By constantly seeking to acquire new games and by rushing through those we own, many of us (not all, but certainly many) have forgotten why we play at all: for the experience.

In order to prove my point, I will use FFVI as an example, a game still revered by many and remembered by all. To begin my argument, I will ask this rhetorical question addressed to all old school gamers: why do you love FFVI so much? Surely, if we begin to analyze the game from a technical standpoint, its merits have long since then been outclassed. Rather, the game is loved because of its gameplay, its music, its plot, its characters, its charisma; in short, its experience. But aside from gameplay, anyone would (hopefully) acknowledge that those topics are all totally subjective. Therefore, no one can judge and assert that a soundtrack, a storyline, or a cast of personalities would entertain and please everyone. So then, why would FFVI be better than every single RPG ever made if its dominant traits are all subjective? I believe the answer is quite simply fondness, a fondness which has arisen from a total emotional attachment to an adventure that has been relived multiple times over.

Then, despite your current lack of free time, why not give other RPGs the same chance you gave FFVI when you had all the time in the world to savor it? In my case, I had played FFVI through a few times, having never owned the cartridge myself. Having not re-played the game until very recently, I kept second-guessing everyone who still hailed the game to this day. I thought, "Is it really fair to still praise Uematsu's work on FFVI as his best ever? Is the cast really that fantastically personable? Is the experience truly that memorable, or is it just a question of perception?" And so, I replayed the game myself, and that is when I realized that I had forgotten a lot about FFVI. To me, and this is my subjective opinion only, the music unmistakably is sensational. To me, the cast and the overall adventure absolutely is memorable. My lasting perception of the game had always been favorable for certain, but I needed to refresh my memory to realize how truly astounding the production was and still is to this day.

Some might think that I am contradicting myself blatantly, but please do not forget that this editorial is in no way aimed at downsizing FFVI. Rather, I am solely using my experience and that of thousands of gamers with FFVI to showcase my point: most RPGs deserve to be relived multiple times. I would even go as far as to substitute most with every, of course depending on who is concerned. Adventures you tasted several years ago are most probably not quite lucid in your mind. Everyone has a certain lasting feeling for everything they've played, be it good, bad, or something in between those two adjectives. Instead of pursuing newer adventures constantly in hope of perhaps finding the one that would titillate your mind most profoundly, why not give those RPGs, the ones you still feel good about at the mere thought of them, a second, see third chance?

Sometimes, an RPG challenges you with the depth of its plot. In other instances, the mere act of escaping to that world you so cherished, to those friends whose emotions, torments, and joys resound more true than true in your heart can stir in you indescribable passions. And very often, the soundtrack accompanying a game can rival the genius of Beethoven himself to your unsuspecting ears. Whatever fragment of story has remained unresolved in your mind, whatever your reasons for still liking the game after so long, whatever particle of a glorious requiem lying on that shiny disc still beats within you, revisit that adventure in order to finally grasp the magnitude of the production completely. Experience less if time be a constraint, but experience what you can passionately and exhaustively. Who knows, maybe that one adventure you've been seeking is merely waiting on your shelf to be deciphered further and treasured forever.

- Phillipe Richer

Damian:

And the beat goes on, folks. It's rare that I revisit any game I've played through and beaten, the notable exceptions being Final Fantasy IV and Castlevania: Symphony of the Night. That's not to say that there is little or no merit in doing so. I agree that games are like books; they require you to replay them in order to grasp everything going on. This is especially true for RPGs, where often times character-building side-quests are overlooked in the player's desire to beat the game and see the ending. These qualities and others that one simply ignores while attempting to beat the game are extremely important to the gamer's enjoyment and appreciation of these titles. Good topic, Mr. Richer.

 
The Giant and the Little Guy

When you begin pondering why exactly it is theyíre feared on both sides of the spectrum, it may be harder to grasp an answer than one would imagine. Can the little guy really pose a threat to the giant in his own game? While they may not fall harder the bigger they are, reality is itís always the little guy thatís feared, yet the giant always intimidates the little one.

People with money can do just about anything. Third party developers can market everything, release anything and still face defeat. They build a rep., they release some games, and ultimately a foundation is built. So ask yourselves, why does the giant fear the little guy?

Now hold that thought and think about this. From and Independent Developers point of view itís a make or beak situation: they have a lot to lose if their title doesnít interest the crowd and thatís exactly why they DO stand out. They bring in innovative concepts to the arena and better the old. That sounds kind of risky, doesnít it? Bringing in new concepts to a game considering itís the first title released from someone with such an unknown name.

Letís take Squaresoft for example (weíre not talking about Square-Enix ladies and gents): they started out by playing a whole new ball game. Back in the late 80ís, most people didnít even know what an RPG was unless you played things like Dungeons and Dragons. Final Fantasy came, it sold, it was criticized, and ultimately Squaresoft nearly went bankrupt. What did they do? They released a sequel and now Final Fantasy is one of the most acclaimed names in video game entertainment.

When youíre not operating on a deadline you have all the time in the world to tweak with ideas, to make something new, to appease and wow the people. Thatís a pretty damn good reason to be feared by someone who does operate on a time basis and does have fans to appease. If youíre the type that thinks that doesnít effect the overall development of a game, then ask yourself this: how well did Squaresoftís Unlimited Saga do? Just because youíve played chess for years you can still be beaten by someone who has never played but took the time to read and research all the tricks.

Perhaps we, as gamers, need to start acknowledging the little guy. Iíve been watching them for years and itís proved to be worth my time. If an independent developer that God knows how few souls have heard of can release a first game like Halo, Iíll be damned if someone isn't out there making the next Final Fantasy and becoming the next Squaresoft. Everyone starts small; whether or not a chance is given is what it all boils down too.

Maybe, just maybe if we open the door weíll start to see some new and great games. Maybe we can stop thinking about the most ďpopularĒ and start realizing what exactly it is the unknown has to offer, and just maybe we can start giving credit where it's truly due. After all, doesnít everyone deserve a chance?

- Paul Tipton

Damian:

I guess this is true of just about any field in an ideal capitalist society. Small groups come up with ideas that can rocket them to the top, and innovation is king. Consequently, the big boys can wind up at the bottom fast if the customer doesnít like the merchandise theyíre peddling. The biggest threat to this method? Consumer apathy. As long as the consumer cares about what he or she is getting, the system works. However, when that breaks down, we wind up with mindless sequels, spin-offs, and cookie-cutter titles that donít bother to innovate or interest. Buyer beware.



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