Following news of Sega’s restructure in June - which lead to layoffs in the west, and reduced focus on boxed products in favour of proven IP and digital game sales - the lesser-known second half of John Clark’s job title took on greater significance. Known to the trade as Sega’s UK managing director, Clark is also Sega’s digital distribution director, responsible for heading up Sega West’s focus on PC and other new markets. Here, the Sega exec updates us on the publisher’s new outlook.
What’s the thinking behind the restructure?
Specifically from a UK point of view, the Mario & Sonic Olympic Games franchise has been incredible for us, as has the success of Sonic, with the brand achieving a six to seven per cent market share on Nintendo formats. Football Manager, Total War and Aliens have delivered, and continue to deliver, successful launches across all major formats.
Looking to PC, over the last five years the European retail PC business has not been growing - it has been stable but with so many new formats emerging in that time, it's been difficult to maintain good shelf space. However we know the content coming out of Creative Assembly and Sports Interactive in particular has been getting better and better, with world-beating quality, devoted and committed fan bases and compelling content.
Generally speaking, fewer retailers across the western business have been taking PC goods. Our PC studios are mainly European and, in the UK especially where we have a 14 to 15 per cent share of the PC market, PC was still not a fashionable commodity to have on the shelves. That was an underlying trend and so at a time we were having success on console formats, PC was not really growing - even with improving content. So, getting to today, we've been able to concentrate on four franchises that are core to the business - Sonic, Football Manager, Total War and Aliens.
How are you approaching each of these four core businesses?
They’re all different. Total War is a franchise with strong DLC which is very big in Europe but has not yet quite reached the same levels in the US. Football Manager has very European-centric and a very different business balance. It’s still a big physical packaged game as well as being at the forefront of the PC digital retail market. Both franchises have huge, devoted followings and are successful across Steam, iOS and Android too. Sonic is a hugely popular global brand, so a lot of focus will be on growing merchandising and getting the right game, at the right time, in the right place. So we really want to concentrate on that. In addition we want to bring out excellent triple-A content on console with Aliens.
What about other boxed product? Will we see new games outside these core series?
The transformation of the Sega business has considered the infrastructure needed to support these franchises. The point of entry to find the next Assassin's Creed, Call Of Duty or Battlefield, the cost of entering that market and the cost of making it a success is more of a challenge than it's ever been, but that's not to say that launching new IP in the right way isn't viable. And digital innovation is key to that. We're growing in certain areas and we see the studios as creative powerhouses that we work closely with, and we want them to be even more creative. Our success with Sports Interactive and Creative Assembly support this outlook.
What sort of new areas are you looking into?
There is now a new layer of business; new content and new IP which will be better created within the PC digital area. We're really embracing digital delivery - Gaikai, OnLive, Playcast, Steam, Metaboli, GameStop, Amazon and so on - in addition to physical goods. We need to remember the role that retail plays and be conscious that not all of our consumers wish to pay with a credit card. We look at all the business models, whether it is paid for content, microtransactions or free-to-play. We look at the content and ask: ‘Would a free-to-play model work with our established content?’ My personal feeling is that we've got to keep investing in quality content and we've got to keep letting the developer be the innovators, then we decide what business models will work. There are no hard and fast rules.