Press release: 2001-01-30: Sega Focuses On Its Content and Network Strengths

This is an unaltered copy of a press release, for use as a primary source on Sega Retro. Please do not edit the contents below. Language: English Original source: The Free Library

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 30, 2001

New Company Strategy Gives Sega a Range of Revenue Possibilities and a Path to Profitability; Poised to Become Leading Network Entertainment Company

Sega(R) today announced it would restructure the company to capitalize on its game content -- an area that has been Sega's biggest strength for more than 40 years. In turn, Sega will unveil a three-pronged approach -- becoming a platform-agnostic third party videogame publisher for game consoles, focusing on its advantage in the networked gaming arena, and becoming an architecture provider of the powerful Dreamcast chip-set technology to a range of devices including the Pace Micro Technology set-top-box. By embracing technologies including Java, Sega will also be taking advantage of different publishing channels and will deliver Sega games to Palm(TM) handheld computers and Motorola cellular phones. With this new strategy, Sega will be significantly broadening its accessibility to consumers and dramatically expanding its revenue possibilities, leading the company to a path of profitability.

World's Leading Publisher of Interactive Entertainment

"Sega is a company that has always dared to innovate and push this industry forward," said Peter Moore, president and COO, Sega of America. "Sega will continue to do so with its new strategy, and the result for consumers will be what you would always expect from a `rules-breaker' like Sega -- a library of pioneering, jaw-dropping content now available any way you want to play."

Sega plans to ship more than 30 games for Dreamcast in the U.S. this year and a number for other platforms. The first Sega games to be available on other game consoles this year will include "Virtua Fighter(TM) 4," the "Space Channel 5(TM)" series, the popular "Sakura Wars" series and two titles from the "Let's Make a Sports Team" series (which has been highly successful in Japan) for Sony PlayStation(R)2. "Sonic the Hedgehog Advance(TM)," "ChuChu Rocket!(TM)" and "Puyo Puyo(TM)" will ship for Nintendo's Game Boy Advance(R). Further details on availability of these titles will be announced shortly.

Sega will continue to sell through and market the Dreamcast console and its games at retail for the next year. To help accelerate the transition of Sega from a hardware to a software company, the company has announced a new MSRP of $99.95 for Dreamcast. The new price point becomes effective on February 4, 2001 throughout the United States and Canada ($149 CND). In addition, Sega of America will be undergoing a company restructuring as they transform into a third party publisher.

Sega is already well positioned to become the world's leading publisher of interactive entertainment. The company has more than 40 years of experience in interactive entertainment, in addition to thousands of Sega developers worldwide creating quality games. The combination of a greatly expanded installed base provided by other videogame consoles and the world's best developer talent including Yu Suzuki (creator of the "Shenmue(TM)" and the "Virtua Fighter" series), Yuji Naka (creator of the "Sonic the Hedgehog(R)" series, "Samba de Amigo(TM)" and "Phantasy Star Online(TM)") and Hisao Oguchi (creator of "Crazy Taxi(TM)" and "Virtua Tennis(TM)"), Sega is well positioned to become the world's leading videogame publisher.

Alternative Platform Support

Sega will leverage its powerful Dreamcast technology and other technologies such as Java to further the objective of putting Sega games virtually everywhere. To that end, Sega today announced it will bring its legendary videogame content to Palm handheld computers, and announced a relationship with Pace, a leading set-top box company. Under the relationship with Palm, Sega will provide both on and offline games for Palm Powered(TM) handhelds sometime this year. Sega has licensed the Dreamcast technology to Pace, which is creating a set-top box that will play Dreamcast games. Additionally, Sega also announced late last year that the company would bring Java-based games to Motorola phones this year.

In further support of Dreamcast consumers, many of the 30 Dreamcast games shipping in the U.S. will be exclusive to the Dreamcast console. There will also be best-selling franchises such as "Sonic Adventure 2," "Crazy Taxi 2(TM)" and "Shenmue 2" coming to Dreamcast this year. Dreamcast gamers can also enjoy the current library of more than 200 games including hits such as the award-winning "Shenmue," which USA Today called "one of the most immersive and gratifying games around" and the top-selling "Sega Sports(TM) NFL 2K1" and "Crazy Taxi."

"We have an incredible line-up, key opportunities with other non-gaming devices and a huge combined installed base worldwide for next generation platforms," continued Moore. "With this in place, Sega is well positioned to become the world's dominant interactive software publisher and the leading network entertainment company given our online strengths."

Networked Gaming and Entertainment

With this new company strategy, Sega will not only be focusing on content, but also the company's networked gaming strengths. Utilizing Sega.com's SegaNet(TM) network, Sega will be able to bring network gaming to virtually any platform from other videogame consoles to other Internet devices. SegaNet delivers additional revenue streams to the company via subscriptions, commerce and advertising.

"As Sega makes its incredible content available across multiple networked platforms and devices, SegaNet is uniquely positioned to create the world's largest game and entertainment network," said Jonathan Kaplan, chief executive officer, Sega.com.

SegaNet, launched in September 2000, is the world's first high-speed, low-latency console gaming network. The network, which already has over 200,000 user sign-ups, was designed to support multiple platforms including gaming consoles, PCs, wireless devices, and set-top boxes. In addition, with the recent acquisition of FamilyWonder, SegaNet is poised to expand beyond gaming content to other forms of entertainment, including music and movies, as it continues to lead the industry with innovative online entertainment offerings.

Sega's Software Heritage

Sega has been an interactive entertainment leader for more than 40 years. In fact, no other company has had more "firsts" in the $8 billion videogame market than Sega. Sega created the first-ever arcade simulator game with "Hang On(TM)" in 1985. In 1990, Sega unveiled "R-360," the first arcade game to be able to rotate 360 degrees. In 1993, Yu Suzuki pioneered the 3D fighting game genre with "Virtua Fighter(TM)." The year 2000 brought other industry firsts including "Seaman(TM)," the first-ever voice recognition videogame in the U.S. and "Sega Sports(TM) NFL 2K1," the first ever online console videogame.

About Sega

Sega(R) of America is the American arm of Tokyo-based Sega Corporation, responsible for the development, marketing and distribution of Sega video game systems and video games in the Americas. Sega Corporation is a nearly $2.5 billion company recognized as the industry leader in interactive digital entertainment media, offering interactive entertainment experiences both inside and outside the home.

About Sega.com and SegaNet

Sega.com, Inc. (www.sega.com) is an online entertainment company that integrates Internet technology and innovation with over 40 years of experience in the video game industry. Sega.com also built SegaNet (www.sega.net), the only high-speed online console gaming network and community destination for gamers that provides game users with the ultimate in speed, reliability and content. SegaNet offers both Dreamcast and PC gamers the best in 3D multi-player games, chat, community, cheat codes, tournaments and content. SegaNet is also a full service ISP offering everything including e-mail, high-speed Internet access and great game content to music, TV, community, movies, sports and e-commerce. SegaNet is the one stop destination for online games and gaming related content, offering gamers a community built specifically with them in mind.

About Nintendo

Nintendo Co., Ltd., of Kyoto, Japan, is the acknowledged worldwide leader in the creation of interactive entertainment. To date, Nintendo has sold more than one billion video games worldwide, has created such industry icons as Mario(R) and Donkey Kong(R) and launched franchises like The Legend of Zelda(R) and Pokemon. Nintendo manufactures and markets hardware and software for its popular home video game systems, including the Nintendo 64 and Game Boy -- the world's best-selling video game system. As a wholly owned subsidiary, Nintendo of America Inc., based in Redmond, Wash., serves as headquarters for Nintendo's operations in North America.

About Pace Micro Technology

Pace Micro Technology plc is a pioneer of digital technology for the home and has helped build the global market for pay television services. Using this expertise, Pace is evolving the set-top box into a sophisticated home gateway to enable revenue-generating services for TV and the networked home. In this networked home, the Pace home gateway is the portal for entertainment and interactive communications around the home and with the outside world.

Pace analog and digital technology has been installed in over 11 million homes worldwide since it was founded in 1982. The company is now actively involved in all digital platforms -- satellite, terrestrial, cable, wireless and xDSL -- through relationships with broadcasters, network operators and technology partners in the UK, USA, Europe, Latin America, Australasia and the Far East. These achievements were made possible through the commitment of Pace's 1,200 strong workforce, over a third of whom are research and development engineers, dedicated to the development of digital technology for the home and small and home office markets.

Pace's head office is in Shipley West Yorkshire, with further offices in Bracknell, Cambridge, the USA and Hong Kong. The company's shares are traded on the London Stock Exchange (PIC). Pace's U.S. operations are based in Boca Raton, Fla. For further information, please visit Pace's web site at http://www.pacemicro.com.

About Sony Computer Entertainment

Recognized as the undisputed industry leader, Sony Computer Entertainment America Inc. markets the PlayStation game console and develops, publishes, markets and distributes software for the PlayStation game console and the upcoming PlayStation 2 computer entertainment system for the North American market. Based in Foster City, Calif., Sony Computer Entertainment America Inc. serves as headquarters for all North American operations and is a wholly owned subsidiary of Sony Computer Entertainment Inc.

A recording of the teleconference that will take place on January 31, 2001 will be available until February 3, 2001 by dialing 800/756-0129 (US) or 402/998-0753 (International).

Compelling visuals of Sega licensed characters such as Sonic, a timeline of Sega milestones and other visuals are available at ftp://ftp.accesspr.com/public/sega. Look under the New Sega Strategy folder.

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