[Editorial Tuesday] Why Sega Is Still Important to the Video Game Industry

It’s been easy to write Sega off as a game development company. They’re often seen as a once major player in the world of video games that lost its touch once they stopped manufacturing their own hardware. And it might be easy to see why some view that as the case: you’re not going to find wildly ambitious RPGs like Skies of Arcadia or strange conceptual titles like Seaman from their internal teams anymore. Without being able to sell pricey hardware, they no longer have a steady stream of revenue to fund development of such titles, and now they have very few internal teams that regularly produce titles.

This is not necessarily a bad thing, however. Over the years, they’ve managed to acquire several big name developers and make partnerships with others to pick up some of the slack. Not only that, but while they may no longer be a dominating force in the console market, they’ve become major players in other video game markets you may not normally associate with a big name studio. They’re still doing a lot for the industry, even if you don’t realize it.

1. Arcade Gaming

While the halcyon days of bugging your mother for her loose change so you could go play Teenage Mutant Ninja Turtles at your local mall’s arcade may be over, it’s still a huge business. In fact, in Japan alone, arcades were drawing in over 400 Billion Yen in revenue, which translates to over $3.5 billion! Even without Japan, though, the rise of barcades and resort locations with arcade attractions have kept arcade machines alive in the West.

Naturally, a company that got its start through development of arcade machines has its hand in the business. In fact, in Japan where you can still find arcades as a standalone business, Sega has several thriving locations. Its most obvious one would be its Club Sega brand found in both Tokyo and Okinawa. Here, you can find a gamut of different types of arcade games on its various different floors, from prize machines like UFO grabbers and what have you, to more traditional arcade experiences that Sega built its name on in the past.

However, more interestingly is its Joypolis brand of arcades. These are less like traditional arcade experiences and blur the line between gaming and amusement park. Many arcades have managed to survive by moving away from quarter grabbing games and luring you in weird looking gimmicks, like strange gimmick controllers (such as in Super Table Flip!, that game you may have seen around conventions where your controller is a wooden table you knock around). Joypolis takes this concept and pushes it to its extreme, with lavishly ridiculous cars based around hit anime series Initial D that you actually have to jump in and drive. But most importantly, it’s how these arcades have been used, and are being used, to push VR technology. Sega develops VR events specifically for its Joypolis locations, and these are the main draw. It’s been a great way to expose people to the technology and drive up public interest in the country

And it’s not just Japan either. Naturally, as we’ve stated, arcades may not be the sprawling business they once were in the West, but they still exist and manage to do quite well for themselves. Sega continues to develop several arcade machines for use in the West. And not just of their own IPs either! You might find the odd Sonic Dash machine here and there, but a lot of their output comes from building machines for other major franchises that are looking to break into the arcade market but don’t quite have the ability to make the investment to actually develop their own arcade technology. For example, if you’ve ever seen the Angry Birds or Luigi’s Mansion machines around your local Dave & Busters, those were actually manufactured by Sega. They have a host of different machines for sale on their online site, so, hey, if you’ve got a few thousand dollars burning a hole in your pocket, you could buy one of these machines for yourself!

2. PC Development

Of course, Sega hasn’t fully moved away from traditional game development either. And they do still dabble in console development at times, but for the most part, many of their releases in the West tend to be released digitally on the PC. This is important, as many Japanese developers have traditionally been quite hesitant to jump into the PC scene, which is arguably bigger than it has ever been before. While companies like Namco and Koei-Tecmo have slowly begun to accept the platform, Sega has been there for a while, leading the way.

It’s just not been with the sort of titles you might expect from them. Certainly, they’ve been good about releasing legacy franchises like Sonic the Hedgehog as they’ve been releasing new entries in the franchise, but actually some of their biggest games in recent years have been decidedly un-Sega. Both the Football Manager and Total War franchises are published and owned by Sega, and these are decidedly some of the biggest games in their respective genres. Total War alone has pushed over 20 million units since its inception by development team Creative Assembly and has kept simulation strategy gaming alive in between the breaks between Civilization games.

It’s these titles that have pushed Sega towards a largely digital future, and as a result, they’ve been encouraged to start moving more large-scale Japanese titles to the platform. It began with them testing the waters by putting out their 2008 strategy RPG Valkyria Chronicles, which performed spectacularly and revived the franchise. Since Valkyria Chronicles’ successful relaunch, we’ve seen more Japanese-focused companies experiment with the platform, and Sega themselves have been pushing towards a digital future. Just recently, we saw the releases of Bayonetta and Vanquish on Steam, two critical darlings from the early 2010s that have seen similar success. It’s proof that a company can find AAA level success just from a digital market.

3. Acquisition and Healthy Care of Struggling Studios

Back in 2013, a company called Index was in major trouble. They had been exposed for fraud and misleading investors and had to claim massive amounts of debt. Sega came in and kindly purchased their assets and internal studios under the name “Sega Dream Studios”, changed the name of said company to “Index Corporation”, and then sold it off the Sawada Financial Group. Before doing so, it separated out its main gaming development studio into its own branch within Sega. This branch was Atlus, who you may know for such genre-defining RPG series like Etrian Odyssey, Shin Megami Tensei, and most notably, Persona.

See, if not for Sega, Persona 5 may never have seen the light of day. It’s hard to imagine with a big name, promising title like that, someone would have had to have picked up Atlus eventually. But what we’re trying to illustrate with the above story are the lengths and dedication Sega went to acquire Atlus and its properties without disrupting the order or integrity of the studio. Sega made sure to get them before people would start jumping ship so that they wouldn’t lose out on any of the major talent involved with the development of their major franchises.

In fact, Sega is pretty well-known for not interfering with the studios they acquire. Supposedly, Atlus has managed to maintain its autonomy as a development studio while only having to answer to Sega about the big decisions. Their creative decisions are mostly handled by Atlus themselves. They haven’t been forced to adapt to a new corporate culture or been forced to alter their main franchises in any way. In fact, they’ve even been allowed to keep up their own Western publishing branch alive so that they can exclusively translate their own titles. We’re able to still see generally Japanese-focused niche releases like Etrian Odyssey V and the 3DS remakes of Shin Megami Tensei: Strange Journey and Radiant Historia, games other companies would have never given the greenlight for so close to the end of the 3DS, get a Western release.

And it’s not just Atlus we see this habit with either. When THQ died out in 2013, Sega ended up buying out Relic Entertainment, who you may recognize as the studio behind the Company of Heroes and Warhammer 40k: Dawn of War titles. Again, rather than draining them of their internal talent and moving them around into other positions within Sega to work on other projects, or forcing them to work on projects they may not be comfortable with, they kept the franchises and let them keep doing what they knew how to do best: make hardcore strategy games. It seems all too obvious to not try to fix what’s not broken in the first place, but it’s something that, strangely, Sega seems to understand that few other companies seem to at times.

4. Focus on Non-traditional Demographics

Look, we’re not going to sit here and pretend like Sonic hasn’t become the butt of a joke lately. Yes, we all know of the Sonic original character craze, and it seems weird and silly. Every new Sonic game needs a new, even more annoying new friend of Sonic’s who’s somehow more overbearing than the last one. Many question what the point of even keeping the franchise alive is, leaving it as a hollow shell of its once proud and glorious self. Now, Sega is even letting people make their own silly OCs in Sonic Forces, encouraging this bizarre habit that has sprung up.

But, here’s the thing: who else is really making games skewed towards a younger audience? You of course have Nintendo, but they have their own dedicated consoles for that. And, frankly, the dynamics of the gaming space in the living room have changed. Children are no longer dictating what their parents buy for them to play. Parents want to play too now, and most of the time they’re going to choose a system that skews towards an older player base like the PS4 or Xbox One, and can’t always afford another system just for their kids to play on. So, gaming for kids has been left to interactive gaming figure franchises like Skylanders and Disney Infinity, which are dying out, some games that are inoffensive enough, like Minecraft and Rocket League, which have a lot of appeal for kids but were never specifically designed with them in mind in the first place; and then the occasional first party effort by Sony or Microsoft.

This has left Sonic in the unique position as one of the few remaining franchises that still plays like a traditional game that was specifically designed for kids that can be found on a variety of different consoles. Most of us tend not to think of that as a big deal because we figure parents don’t really care that much about the content of what their kids are playing, so they’re just going to end up playing Call of Duty and Grand Theft Auto anyway, but this doesn’t really seem fair. Kids are getting their tastes forced upon by what adults want, but honestly Sonic is one of the few franchises that actually take into consideration what kids want. For example, Sonic Unleashed was famously derided for introducing a mechanic where Sonic turns into a werewolf and for citing that their decision was made due to hearing a lot of kids request Sonic turn into a monster. Maybe this doesn’t exactly make great “art”, but what other company is really listening to what children are asking for in their games. We might mock the OC creator that is Sonic Forces, but hey, clearly the kids are into it. Why should Sega satisfy their wants too? It’s not like we don’t have the more traditional Sonic Mania to satiate our nostalgia for the series.

But it’s not just kids that Sega seems to have an odd pull with. Strangely, Sega has managed to tap into an older demographic as well. And by “older”, we don’t mean the standard 18-25 year-old otaku fanbase that dominates gaming fandom in Japan. An interview between series director Toshihiro Naogoshi and Siliconera revealed that while the series is growing with a younger audience, the main demographic for the series in Japan has been 30-some year old men. There are certainly older otaku out there, but not enough for this to really be a main target group. Yakuza’s more adult appeal and discussion of themes not generally found in most games has struck a chord with older audiences, and it’s currently one of Sega’s biggest traditional gaming franchises, having sold over 9 million copies in total.

5. Freely Cooperates with the Usage of Its Franchises

No one thought Bayonetta 2 would ever happen. Platinum games had been creating pitches for a sequel to their critical darling, but financially failing, Bayonetta, and even tried to alter the art design to make it more palatable to a mainstream audience. Sega was still turning it down. However, somehow Platinum managed to attract the attention of family-friendly Nintendo, who was keen to publish the game. It’s hard to imagine any company wanting to go through licensing hell so that they could still own the rights to a franchise while allowing an entirely separate outside company to go ahead and publish a single game.

But, strangely, this was exactly what Sega did. They gave the okay and licensed the series out to Nintendo solely for them to publish. Sega still has control over the franchise (as evident by the recent release of Bayonetta on Steam), but Platinum was able to develop the game they originally wanted to, and Nintendo took on pretty much all of the risk for the development.

This is actually not uncommon of Sega to do. MonolithSoft, one of Nintendo’s current internal teams that still has a publishing deal with Namco, was hired on to develop a sequel to Namco x Capcom, a PS2 strategy RPG that never saw the light of day outside of Japan due to the licensing headache. Except, for the sequel, they also somehow managed to convince Sega to come into the crossover fold as well! It’s almost baffling that they allowed so many of their own properties to be mixed into the fold, but hey, they were cool with it and somehow the game even gave their blessing for an international release.

So many companies are so hyper-protective of their own IPs that they sometimes forget that the reason people want to work with their franchises is because of how long it’s been since the original company even used them. But Sega seems content with other companies making use of their own properties because they realize that it can come back to them in goodwill. Perhaps most noteworthy of this is going so far as to letting Yu Suzuki finally finish up the story he started with the Shenmue trilogy by licensing him the franchise for a Kickstarter campaign. They’re smart enough to realize that, so long as they’re not taking the financial burden, why shouldn’t they let others use their properties? It seems like common sense, but it’s not something many companies seem to understand.


Final Thoughts

Sega may not be the most traditional gaming company out there. They don’t always do what we want because their business model has shifted so subtly away from the traditional gaming market that at times it’s hard to notice that. And it’s not like they’re uninterested in this market either. They’ll sometimes fund a crazy action game like Bayonetta or an RPG like Sands of Destruction, but for the most part they seem more focused on keeping other aspects of gaming alive. And that’s fine. Because sometimes their interests crossover with what we want too. They did eventually get around to translating the later Yakuza games after years of staying silent on the subject, so it’s clear they listen to their fans. Maybe they’ll eventually get around to porting Skies of Arcadia to PC.

Did we miss anything? Any aspect of Sega you really love? Anything that really frustrates you in particular about the company? Please, let us know in the comments below?

Matt Knodle

Writer

Author: Matt Knodle

I come from Indiana, where I grew up near a video rental shop that proudly stated “The widest selection of anime in the state”, setting me on a course to enjoy as much anime as possible. I’ve devoted myself to over-analyzing various sports anime and video games probably more than they were ever intended. I currently co-host a weekly sports anime fan podcast called KoshienCast with my good friend, Matt.

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