[SegaR&D]

http://www.digitimes.com/news/a20041209A7044.html

Interview with Sega COO Hisao Oguchi
Bryan Chuang, Taipei; Steve Shen, DigiTimes.com [Thursday 16 December 2004]

Sega Corporation made the shocking decision in early 2001 that it would cease production of its Dreamcast online game console and instead focus on developing software titles for use with its former rivals’ game consoles, including the PlayStation 2, GameCube and Xbox. Company president and COO Hisao Oguchi spoke with DigiTimes about the flexibility this strategy afforded the company, and he also spoke about Sega’s goal of becoming the world’s largest provider of game software.

Q: Sega is now a major producer of arcade games, but your company also vowed to become the world’s largest developer of game software. How far has Sega gone toward achieving that goal?

A: Sega aims to start by becoming the world’s third-largest vendor of home-use game software and then move on to become the world’s largest developer of game software. We have developed online games targeting a variety of markets, including China, Europe, Taiwan, Japan and the US, and we have also established R&D facilities in China because of its market potential. However, we have not yet reached our targets.

Q: Sega decided to transform itself into a game software developer in March 2001. What was the impact of this decision on Sega’s development?

A: The decision to discontinue production of the Sega Dreamcast was the right choice. I believe it is a huge risk to invest in the development of a new hardware platform for game consoles. The shift to software development allowed Sega to concentrate our resources on our core competency.

As a designer myself, I think the software business is much easier to navigate than the hardware market, and a lot more fun.

Q: South Korea companies now dominate the software market for online console games in Taiwan and China, but some vendors in Taiwan assert that games related to Chinese martial arts and historical figures are likely to become the mainstream, and Korean companies are facing a creative drought. What is your opinion?

A: In addition to creativity, software development needs to satisfy commercial needs. Sega tailors the development of each of our games to the national, ethnic and cultural aspects of the various target markets. However, although there is a cultural gap between Asian and Western societies, it does not mean that people in Asia will only play games related to their own cultural background, and vice versa.

We do have research teams in Japan, the US, Europe and China developing new games based on the characteristics of the different cultures. Our next-generation online multiplayer game, Shenmue Online, which is scheduled to be launched next summer, is a good example of such efforts.

Q: Many game software developers prefer to focus on online games to avoid having their products pirated. Did Sega decide to develop game software with concerns about this?

A: Counterfeiting of home-use game software is very serious in Asia, especially in China. The most heavily anticipated games are already available in China the day after they are released in Japan. As a result, online games are attractive for software developers in Asia, as counterfeiting is so rampant.

Q: There are rumors that Sega might be acquired by Microsoft as Sega has long been a supporter of the Xbox. What are the next moves for Sega?

A: Many people have spoken about the close relationship between Sega and Microsoft, but the two companies have never discussed an acquisition or merger. However, there are many companies interested in Sega, and we also would be interested in other companies that have growth potential. Just recently we acquired the Japan-based Sammy Corporation, and we also have an interest in acquiring Taiwan software companies. During this trip to Taipei, we found that Xpec Entertainment and Interserv International both have good products and a talented staff.

Our investments will be targeted at companies that can help us keep pace with the industry, such as helping us produce products for next-generation platforms and high-performance PCs. New platforms such as the PlayStation 3 and Xbox 2 will likely be launched in 2005, and software for portable consoles is also expected to grow vigorously.

Q: Microsoft’s Halo 2 is a multi-million project. Does Sega also have such capital-intensive software development plans?

A: Sega’s strategy is very clear, and we will not commit blindly to huge investment projects. Instead, we invest and develop new products gradually, based on our expertise and assessment of market trends. For instance, the Dragon Crest-series online game has been developed steadily and is now in its eighth version. By developing our products in such a way, we have been able to build up an online user base, while also supplying a reasonable income for operators. Halo was developed under the same model, and many enthusiasts are looking forward to Halo 3.

Q: What will be the major events for the industry in 2005?

[b]A:[/b With the introduction of next-generation consoles such as the Xbox 2 and PS3, software design houses will be required to put more manpower and capital into developing new games to cope with demand. So I think that there will be no room for small-scale design houses to survive in the software market for these consoles. However, small-scale software companies may be able to shift their efforts into developing games for handsets or Nintendo consoles.

Q: Sega recently obtained a seven-year license to use Osamu Tezuka’s comic book content. What is the significance of this license agreement – how does it fit in with Sega’s overall strategy?

A: From a business point of view, the costs of the original games created by design houses are much cheaper than licensed products. Licensing fees are very high, so the period required to see a return on investment needs to be relatively long. Overall, we aim to reach a balance between original and licensed games, although the development of original games will remain our main focus.

Q: Some have criticized Sega’s sports games as being too similar to those from Electronic Arts (EA). Will this situation continue?

A: We also noticed this problem and so decided to reorganize our research team in November of this year. We will focus our development on games that are different from EA games in style and features.

Q: Does Sega have any plans to participate in game shows in Taipei?

A: We expect demand for our products to continue to expand in Taiwan. We also aim to establish an amusement center in Taiwan. The amusement center will serve as the best platform to showcase the creativity of our company. Internet cafes in Taiwan are also ideal locations to display our software.

Sega COO Hisao Oguchi (Crazy Taxi/HoTD)

[one]

Just recently we acquired the Japan-based Sammy Corporation,

Something wrong here.

[london-boy]

Originally Posted by one

Something wrong here.

[Refreshment]

Check that ego Hisao.

With the introduction of next-generation consoles such as the Xbox 2 and PS3, software design houses will be required to put more manpower and capital into developing new games to cope with demand. So I think that there will be no room for small-scale design houses to survive in the software market for these consoles. However, small-scale software companies may be able to shift their efforts into developing games for handsets or Nintendo consoles.

So maybe theres still some room for Nintendo's out of date handhelds after all.

Mean i cant imagine the costs, even for big companies, that have (for example) one hughe PS3 game and another PSP game in the works. Plus the big initial investment in R&D or the licensing of engines. Maybe small studios should develop a proyect first for the PC and if its succesful have the big publishers aproach them to make a port.

[london-boy]

Where's my VF5????

[Lazy8s]

It was a merger into a separate holding company between SEGA and Sammy, and both companies in a merger like that tend to look at it from their own perspective as an expansion of their business.

Sega COO Hisao Oguchi (Crazy Taxi/HoTD)

The House of the Dead was from a different division, actually. Oguchi headed up Hitmaker, creators of Crazy Taxi, Virtua Tennis, and Virtual ON.

[Tagrineth]

We do have research teams in Japan, the US, Europe and China developing new games based on the characteristics of the different cultures. Our next-generation online multiplayer game, Shenmue Online, which is scheduled to be launched next summer, is a good example of such efforts.

Anyone else see this?

[Lazy8s]

Shenmue Online has been covered before.

Here are some rough details -
http://www.planetxbox.com/shenmuedoj..._preview.shtml

[Fox5]

Originally Posted by Lazy8s

Shenmue Online has been covered before.

Here are some rough details -
http://www.planetxbox.com/shenmuedoj..._preview.shtml

Are Ryo and the other guy forming energy balls, or just standing near some lights?

BTW, shenmue online....why? Shenmue was a fantastic single player experience, but honestly living the life of one of the shop keepers in shenmue sounds very boring...heck it was often boring just talking to them in shenmue, though the tediousness was part of what made the game great. In no other game can I say I spent a week looking for sailors, or worked for 2 months straight moving cargo before I finally figured out how to continue with the game.(I made a ton of money, I think more than enough to afford the plane ticket)
Or maybe shenmue online is more of a phantasy star online type of game, but that seems a little wasted on shenmue and fitted PSO's zeldaesque type theme of exploration better.

[Megadrive1988]

I want DAYTONA USA 3, dangnabit

[Fox5]

Originally Posted by Megadrive1988

I want DAYTONA USA 3, dangnabit

Only if it brings back the classic Daytona song.

[V3]

Are Ryo and the other guy forming energy balls, or just standing near some lights?

They're forming energy balls.

However, small-scale software companies may be able to shift their efforts into developing games for handsets or Nintendo consoles.

So Nintendo is going to get the most third parties supports ? Considering how well Sonic sold on Gamecube, I am suprised they don't make anymore exclusive Sonic games for it.

[see colon]

Considering how well Sonic sold on Gamecube, I am suprised they don't make anymore exclusive Sonic games for it.

why when they can easily port games to every console (and pc) for next to nothing comared to the reletive development cost of one game and make a killing off it. exclusives are for when a console maker want's to give you extra $$ to not port it. or of course if it's not possible from a technology standpoint, although i've seen some of those ports, too.

sonic heroes run on the renderware platform, the same technolgy that powers GTA (multi), mortal kombat (multi), burnout (multi), yourself! fitness (xbox), TMNT (multi), kill.switch (multi), spongebob squarepants: battle for bikini bottom (multi), and a slew of other, multiplatform, port happy games. i threw yourself! fitness in there beacuse it's funny.

point being, the developed sonic on a software platform that allows for easy, cost effective porting. they wouldn't not port unless there was some finacial incentive to do so.

[V3]

why when they can easily port games to every console (and pc) for next to nothing comared to the reletive development cost of one game and make a killing off it. exclusives are for when a console maker want's to give you extra $$ to not port it. or of course if it's not possible from a technology standpoint, although i've seen some of those ports, too.

They can save money and just go for Gamecube. Renderware cost money, since its a third party engine. They can easily reuse what they've got from porting SA and make another game, I am assuming those engines are written by Sonic Team themself.

[Gubbi]

Originally Posted by Fox5

...I spent a week looking for sailors...

Steady with the bum-buggering inuendos please.

Cheers
Gubbi

[see colon]

They can save money and just go for Gamecube. Renderware cost money, since its a third party engine. They can easily reuse what they've got from porting SA and make another game, I am assuming those engines are written by Sonic Team themself.

but why? renderware can't be that expensive, or it wouldn't be used by nearly ever developer, and alot of budget developers as well. why fight with an aging ported dreamcast engine when you can use more capable "off the shelf" middleware that allows the option to port to multiple systems without much effort.

sega is trying to maintain profetability, and have said multiple times that their goal is to be the largest publisher in the industry. you can't do that if all of your games are exclusive to one system or another. you need mass market, cross patform games, and sonic is about as mass market as sega gets.

[Evil_Cloud]

Originally Posted by V3

They can save money and just go for Gamecube. Renderware cost money, since its a third party engine. They can easily reuse what they've got from porting SA and make another game, I am assuming those engines are written by Sonic Team themself.

Doesn't Sonic Heroes use Renderware.

[Sonic]

Who owns Renderware now? I think the expense will go through the roof.

[Farid]

Originally Posted by Sonic

Who owns Renderware now?

Electronic Arts...

[V3]

but why? renderware can't be that expensive,

Up front cost maybe not, but like any engines, they want royalties.

or it wouldn't be used by nearly ever developer, and alot of budget developers as well.

Sometimes you don't have a choice. But as for Sega, I beg to differ.

why fight with an aging ported dreamcast engine when you can use more capable "off the shelf" middleware that allows the option to port to multiple systems without much effort.

Because Sonic doesn't sell particularly well on the other two consoles. Beside looking at how bad Sonic Heroes turns out, Renderware isn't suited for Sonic games either.

sega is trying to maintain profetability, and have said multiple times that their goal is to be the largest publisher in the industry. you can't do that if all of your games are exclusive to one system or another. you need mass market, cross patform games, and sonic is about as mass market as sega gets.

I know Sega been pretty dumb in the past, but come on Gamecube audience and Sonic is a good match. I just hope they don't ruin that because of Sonic Heroes. And they really should make another Sonic games using non renderware engine exclusive to GC before this generation is over.

[V3]

Doesn't Sonic Heroes use Renderware.

Yes we know that, that's what we're discussing.

[see colon]

I know Sega been pretty dumb in the past, but come on Gamecube audience and Sonic is a good match. I just hope they don't ruin that because of Sonic Heroes. And they really should make another Sonic games using non renderware engine exclusive to GC before this generation is over.

but they aren't loosing any gamecube sales by porting a game that's on the gamecube to other consoles, they are just gaining sales from those other consoles. the cost of porting would be less than (lackluster they may be compared to the GC versions) sales they could reap. why do you think rockstar ported gta3 and vice city to xbox? do you think the xbox sales of gta3 were anywhere near what they were on ps2? of course not, but they got extra money for doing an insignifigant amount of work.

renderware in itself was just an example of how cross platform everything has become this generation. middleware is huge. sega could very easily license another middleware solution or create their own (they have experience on all 3 magor platforms and pc).

[Fox5]

Originally Posted by see colon

but they aren't loosing any gamecube sales by porting a game that's on the gamecube to other consoles, they are just gaining sales from those other consoles. the cost of porting would be less than (lackluster they may be compared to the GC versions) sales they could reap. why do you think rockstar ported gta3 and vice city to xbox? do you think the xbox sales of gta3 were anywhere near what they were on ps2? of course not, but they got extra money for doing an insignifigant amount of work.

renderware in itself was just an example of how cross platform everything has become this generation. middleware is huge. sega could very easily license another middleware solution or create their own (they have experience on all 3 magor platforms and pc).

Yeah, but sonic heroes sucked, maybe if they didn't spend time porting it to 3 consoles and trying to make it accessible to owners of all 3 consoles/people who didn't like the sonic adventures series then maybe it would have been better and thus sold better. Ok, the porting of sonic heroes probably had little influence on the final outcome of the game.