[j^aws]

[August 03, 2004]

SEGA Enters China Market for Online Game Business
TOKYO --(Business Wire)-- Aug. 3, 2004 -- Company Establishes Branch Office in Shanghai; Announces PHANTASY STAR ONLINE Blue Burst, CTRacer, and Shenmue Online

SEGA(R) Corporation today announced plans to enter the China market for Online Game Business. In preparation for full-scale business operations in China, the company has established a branch office in Shanghai -- SEGA(R) (SHANGHAI) SOFTWARE CO., LTD.

SEGA, expanding its existing PC portfolio, considers the China Market to be critical for growth in the Multiplayer Online Game Business.

China, with more than 10 million online gamers, has become a key component in SEGA's global strategy to become a market-leader in the Online Game Business segment. The company plans to establish the regional business through its local branch offices, with great Multiplayer Online Game content designed to appeal to market-specific tastes and demand. SEGA has already created successful, market-specific Online Game Businesses in each Japan, U.S.A, and Europe.

SEGA is planning to launch the following PC online games in China.

(1) "PHANTASY STAR ONLINE(TM) Blue Burst" (PSO BB)

SEGA has reached an agreement to provide Zarva Digital Entertainment Co., Ltd., the subsidiary of Zarva Technology Group Co., Ltd -- one of the biggest IT companies in China -- with a license to operative PHANTASY STAR ONLINE Blue Burst. PHANTASY STAR ONLINE Blue Burst is the exciting PC continuation of a marquee franchise that has brought hundreds of thousands of virtual wizards and warriors to life on console and PC platforms. The first title in the franchise -- PHANTASY STAR ONLINE -- was released for Dreamcast(TM) in 2000. Subsequently, PHANTASY STAR ONLINE games have been released on Nintendo GameCube(TM), Microsoft Xbox(TM), and PC. As of May 2003, more than 600 thousand users have signed up to participate in the Phantasy Star Online network.

(2) "CTRacer(TM)"

SEGA will partner with Joyzone Networks Co. to bring CTRacer to China. The Korean beta for CTRacer began in March 2003 and has reached 3.75 million subscribers as of the end of June, 2004. The consumer service in Korea is scheduled to launch in Autumn 2004. CTRacer is a Massively Multiplayer Online (MMO) racing game co-developed by SEGA and Hyundai Digital. The title allows up to 5,000 people to simultaneously compete in races. Players connecting in virtual communities can customize their own cars by purchasing items such as performance parts and paint schemes.

(3) "Shenmue(TM) Online"

SEGA has reached an alliance agreement with JC Entertainment Corp. in Korea to co-develop and co-publish Shenmue Online. SEGA also has an agreement with T2 Technology Holdings Inc. to allow T2 technology to handle the Chinese online game operation of Shenmue Online. The commercial launch will take place in 2005. Shenmue Online is a PC MMO Action Role-Playing Game (RPG) based on the Dreamcast(TM) Shenmue franchise.

-0- *T (SEGA (SHANGHAI) SOFTWARE CO., LTD - Company Profile) Firm Name / SEGA (SHANGHAI) SOFTWARE CO., LTD Representative / Hideki Okamura (Managing Director of SEGA Corporation) Opening Date / June 18, 2004 Location / Shanghai, China Capitalization / 70 millions yen Board Member / President : Hideki Okamura (Managing Director of SEGA Corporation) Director : Weihong Li Director : Yuji Naka (R&D Creative Officer of SEGA Corporation) Director : Hideaki Morishita (Head of Network Business Division, SEGA Corporation) Number of Staffs / 80 (as of the end of July 2004) *T

Source

CTRacer (?) with 3.75 Million beta subscribers! A shift in strategy to online gaming with a foot hold in China could be a good money spinner for Sega/Sammy with a largely untapped market...

[j^aws]

BTW, Shenmue-online ... 8)

[Evil_Cloud]

http://shenmue.t2cn.com/

movie.

[Lazy8s]

Yeah, this is a fitting approach of those developing markets that Japanese publishers so desperately need to tap. Piracy is rampant there, so subscription based gaming helps to ensure the revenue. Massively multiplayer titles are a large part of their gaming culture. The PC is the predominant platform. Also, getting help from native developers should help to make a better suited product.

This new business initiative creates the need for content, giving an opportunity to projects like Shenmue that might not otherwise have gotten further approval.

[j^aws]

Evil_Cloud,

That site is slooooooooooooowwwwwww....must be getting a trillion hits! ...will try later....

Originally Posted by Lazy8s

Yeah, this is a fitting approach of those developing markets that Japanese publishers so desperately need to tap. Piracy is rampant there, so subscription based gaming helps to ensure the revenue. Massively multiplayer titles are a large part of their gaming culture. The PC is the predominant platform. Also, getting help from native developers should help to make a better suited product.

This new business initiative creates the need for content, giving an opportunity to projects like Shenmue that might not otherwise have gotten further approval.

Sega can get a head start there without the distraction of next gen...build a large online community there, then transfer the IPs over to next gen to keep the momentum going. And as you mention without the piracy concerns...just hope they're decent MMO games...maybe there's hope for a decent Matrix online!

[Evil_Cloud]

This is the 'teaser trailer'
http://shenmue.t2cn.com/shenmue.zip

Apparantly this is pre-retail footage from Shenmue 1 & 2, but scenes differ from the final builds. Still waiting for a movie from Shenmue Online though.

[jvd]

Even if the game only gets 200k subscribers it will be a huge money maker

[Evil_Cloud]

Originally Posted by jvd

Even if the game only gets 200k subscribers it will be a huge money maker

China and South-Korea have millions of MMORPG subscribers, so here's someone hoping the game will rake in enough cash to fund Shenmue 3 and Shenmue 4.

[Megadrive1988]

I want Super Monaco GP, ThunderBlade, Galaxy Force II, Super Hang On, Turbo OutRun and OutRunners in Shenmue Online Arcades!

[nondescript]

I`m a little sceptical. Sure, China`s and South Korea`s online gaming markets are booming, but it`s already a pretty crowded field.

I can`t speak about the South Korean market (maybe a few South Korean B3Ders can comment on their market), but as for the markets I`m familiar with, HK/Taiwan/China, the market is already overcrowded. Many online RPGs feature similar gameplay, and are generally undifferentiated, so the companies basically compete on price - the subscription costs have been driven down to almost break even. Only a few, like Lineage I/II, have enough brand cachet to keep a price premium. The unique gameplay features of those few successful games are then aggressively copied by everyone else. The subscriber turnover among casual gamers is quite high, since the client software is practically given away for free. (Two bucks for a shrink-wrapped CD and 10 free hours sold in the same rack as chewing gum in 7-Eleven)

Sega, with a strong collection of innovative games, has a good chance of success in this market, but it`s not going to be a walk in the park. Sega doesn`t have the same brand recognition in China that it does in the US, so it doesn`t enter the field with any birthright - it`s gonna have to earn it.

[passerby]

Gamewatch screens.
http://watch.impress.co.jp/game/docs/20040804/sega.htm

Capcom SF-style fireball?

[Evil_Cloud]

Originally Posted by passerby

Gamewatch screens.
http://watch.impress.co.jp/game/docs/20040804/sega.htm

Capcom SF-style fireball?

Ever watched Project Berkley footage?

It has something to do with the mirrors. ^^

[archie4oz]

Even if the game only gets 200k subscribers it will be a huge money maker

Do you mean revenue or profit? A lot can depend on development and operating costs, and forecasted subscriber revenue. It took SOE almost 5 years to start making a profit (and that's with a pretty well off subscriber base)... Then there's the question of how much you can charge a Chinese user base and how much that offsets the development costs in Japan...

[jvd]

http://www.gamespy.com/articles/536/536117p3.html

[Farid]

From the link above:

Originally Posted by Gamespy

and its story was originally meant to encompass 16 chapters. It got as far as game two.

Wrong.

But it's also fun:

My hunch is that they're gonna take the world in which the game is set, and go off on a completely unrelated tangent. Then, they'll stick the Shenmue label on it, and peddle it to the legions of starving fans (all 138 of you) for a premium.

[maskrider]

Well, the Internet population in China (released by official Chinese source) is 87 Million the last time I read about it. The people are really crazy playing online games, net games are simply very hot there.

They sell all kinds of point cards at a relatively cheap price, and there are professional players that put the special items on auction to make some real money.

Although the competition is fierce there, I expect a game as famous as Shenmue will be pretty popular and can be competitive if SEGA doesn't make major mistakes.

[overclocked]

Of topic but what was the BIG news Sega announced during E3, can´t remember?

[Megadrive1988]

supposedly, Sega's major announcement was Matrix Online. pathetic.

but as far as I am concerned, the major announcement was Phantasy Star Universe. with the possibility (officially) that PSU might be both PSO2 and PSV.