Sega's Big Bet on Console Games Falls Short

Gamespot:
Beleaguered publisher Sega has revealed details of how its big spend on console games has not materialised into major profits, with sales of Wii U games and Football Manager 2015 falling short in particular.

For the nine months between April and December, Sega spent $210 million on games development, representing a 27 percent increase compared to the year prior. Meanwhile, its advertising expenses climbed 53 percent, up to $73 million.

This major push will result in the release of 50 games by the end of the financial year in March, but combined sales of all those are expected to be about 5.4 million units--a figure that is eclipsed, singlehandedly, by the best selling games from rival publishers.

[masterfox]

" Sega has revealed details of how its big spend on console games has not materialised into major profits, with sales of Wii U games"
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lol seriously you don't need to be a rocket scientist to know where the problem is on why Sega is failing.

[SilentNegotiator]

You know, I know Nintendo helped pay for the development, but to sign a multi-game contract of one of your biggest IPs with a company whose home console isn't doing well is an incredibly stupid move...I'm assuming that they didn't pay them so much that they could not at all worry about selling copies and still profit. Wii U was doing TERRIBLY in early-mid 2013.

[Concertoine]

The thing is, sonic games usually sell well on nintendo, even in the GC days where they were also last in sales the sales easily competed with the ps2 and xbox.

I think it comes down to the quality. The install base was a factor but the fact that the games sucked was the real kicker. Because the past few sonic games even on 3ds sold about as well as on wii u.

They really screwed up now because this was the last series they could consistently bank on, and now they're back to 2006 where the series' future is in serious question.

[N4g_null]

First of all sega doesn't sell games on other consoles hardly at all. Ask sega about the ps3 and xb360 sales. Sega was completely pitchforked by so called sonic fans on those systems. Then wii fans showed some interest. Sega retreated to the wiiu and got some money out of nintendo because they knew they could not do what the fanbase wanted.

That last sonic game OMG! really that is the wiiu fault huh? Your development crew bailed!

[3-4-5]

You can't make crap games, include sonic, and hope that people will like it.

Sega, with the Sonic IP, has FORGOT how to make a good sonic game.

Go back to Sonic 1,2,3..

Just made that!

[dcj0524]

They gave sonic to some random studio and that ruined the IP this year. Sonic was on a roll:Sonic Unleashed,Sonic Colors,Sonic Generations,Sonic Dash,Sonic Lost World then A cessation thanks to Sonic Boom. We'd need another multiplatform Unleashed/Colors style game this year to redeem him but it looks like he's going mobile for a while so

[pcz]

it doesnt help that the games are total shit. i mean, that last sonic on wiiu was an embarrassment. and while sonic lost world showed great potential, it turned out to be mediocre at best.

sega only have themselves to blame.

[lpfm]

Broken game = broken sale

[MegaRay]

Limited platforms = limited sales

[lpfm]

Come on Guy!
Don't say $hit like that... Only if Sega sell on costumers'stupidity, and in that case they also deserve broken sales.

[Gamer1982]

No he's right they sold a 3rd party game on the WiiU and if Bayonetta 2 wasn't proof enough of why 3rd partys should avoid that console I don't know what will be. Top AAA game with low sales as was exclusive but wasn't a Nintendo game. The fact is unlike with the Wii people only buy nintendo consoles (not handhelds) for nintendo games.

[Baka-akaB]

Bayo has no real strength as a brand , even if some of us love it ... so no it's not entirely that .

Sega just expected a repeat of the sonic commercial success on the wii ... on a console that's not even close in sales and popularity .

And with as a mighty cherry on top , a worthless and expensive broken Sonic game

[N4g_null]

Sonic and bayo sold about the same on the seller salling wiiu as did 30-50 million hd twin gamers. So putting it on other consoles would not have helped unless you wanted them to pull a unity like how ubisoft did. Imagine the money lost on a unfinished sonic that was mutiplatform ouch!

[Loadedklip]

Their Sonic games on Wii U are amongst the WORST games Sonic game ever ... they are lucky to have sold so much.

[FlyingFoxy]

They should have stuck to the SA2 formula instead of screwing around trying different things, at least they could have improved what made the first 3d games decent.

[MSBAUSTX]

I agree. they had a formula that worked and screwed it up. Hell even Unleashed and Generations were ten times better than Lost World and Boom. The problem is that Sega has started treating their Sonic franchise the way they treated their consoles. Make one one way and before you know it release a system that is different in every way and too soon. Find what works and stick with it Sega. Stop flip floping around and start listening to the feed back of your fans.

[Loadedklip]

I don't understand what they were thinking.

[lemoncake]

50 games yet the only decent one I can think of is alien isolation, they just churning out crap and paying someone millions in the process to make it. Sega is in big trouble and I don't think a shuffling of the pack is going to fix it.

[issa3032]

It breaks my heart how stupid sega is. Where are all the big games/franchises we begged for. Why didn't they focus on ps4 and x1 which have over 30 million market share? Where is a sequel to skies of Arcadia, shenmue hd, panzer dragoon. They released a bunch of wii-u shovelware.

[DEEBO]

Well said issa3032 you're right, sega was big in the 80's and 90's but after the dreamcast seem like they just gave up.

[OrangePowerz]

Well if you spend a lot of money on a crappy game that's on top of it exclusive to WiiU you can't expect to make big bucks.

[issa3032]

They were boneheads making Bayonetta exclusive to wii-u. They could have made sequels to any of these franchises:
http://arcadesushi.com/best...
If I were ceo of sega, I'd set up a site where fans could vote on what they want game they want to see next.

[Nerdmaster]

You do know that SEGA has nothing to do with Bayonetta 2, right? SEGA owns the property, but the developer was Platinum was the publisher was Nintendo. If it depended on SEGA, Bayonetta 2 wouldn't even have been made.

[GokuSolosAll]

Hm, try releasing good games, reviving resting IP, localizing more often, and making Dreamcast 2.

[MrSec84]

I'd love to see a Dreamcast 2, but it would be a costly investment at this point, consoles cost quite a bit to get into.

Although if they did make one Sega could partner up with Steam/Valve and make a console nowadays, make a simple PC in a Sega branded box, make a custom Sega OS, with an API based around GLNext.
Be the only console to use an Intel CPU and NVidia GPU, maybe a scaled back i5 3570K (clocked at 2.5GHz) and something like a GTX 960 clocked at like 1GHz would easily fit in a box the size of XB1, use 6GBs of DDR3, 2-3GBs of GDDR5, 1TB HDD, Bluray drive it could be released for $400 for a minor profit because the cost of parts direct from TSMC would be a fraction of what it costs to buy a PC components.

Sega could almost just buy the chips as they are, like those you'd buy from Amazon or whatever retailer, but get them direct from TSMC.

Use a case around the same size as PS4, it could handle just under 200w fine and that system would probably outperform PS4 by quite a big margin graphically.

Get Valve to use the steam store and steam online, brand it as the Steam/Valve/Sega gaming console.
Have classic Sega games as exclusives and of course some new IPs.

[MSBAUSTX]

Dude if the OUYA can be made and mass produced then Sega can make a Dreamcast 2.

[MrSec84]

Seriously if Sega bothered to listen to fans, look at other developers like Ninja Theory and how they're going to try make some of their games in the future, they'd be fine.

Use smaller, quality teams per project.
People want a Shenmue game, put out what you always planned to make, the full 16 episodes of the saga, but instead of spending $70 million to make each episode, put a few million dollars behind each episode and think creatively about how to approach the project overall.

Hellblade only needs to sell 300K copies to make a return on investment.
If you sold each episode of Shenmue for $15/£10 digitally, release it on PS4, XB1, PC and wait for the profits to roll in.
A lot of the assets could be re-used because it essentially takes place across the same few locations through the game's story.
For the price of less than the 1st games $70M budget you could easily make all 16 games, put a team of 13-20 people behind each episode, aim to get the whole saga released by the end of this console generation.

If they want to release a full retail copy of Shenmue split up the saga into 4 releases of every 4 episodes, sell that for $60/£10 when you have them ready for release and unify the advertizing budget for every 4 episodes.

Same goes for releasing classics like Sonic, Eco, Nights, basically any old Sega game.
Most would probably sell a couple of million copies a piece, so at an investment of a million dollars each and a cost of $15/£10 each to customers Sega would easily make like 30X what it costs them to make each game.

Seems like a no brainer too me!

If they want to make the odd $20M-$200M game then they'd have plenty of cash to do that, without completely killing their bottom line.

[Baka-akaB]

In a just world , Atlus would be the one purchasing Sega .

More seriously , that what happens when on top of quality issues , you decide to keep to Japan the few games people are actually praising and do want .

The fans arent even asking some grand dub project with Troy baker or whatever for most of those . But an actual release and a proper planning and marketing .

But by all mean , do release someday Yakuza 8 or 9 on the same date than GTA 6 , with no promotion , not even text localization for non english countries , just for kicks ... and blame it on the market

[DougLord]

Sega has almost no franchises that are relevant to todays consoles. All 10 of the best selling Sega games are Sonic related. And the 5 most recent of them have a Mario tie in which means Sega's best franchise is tied to Nintendo's poor sales. Sega has failed to translate Sonic to the 3d world. As such it's seen as a budget/casual title rather then AAA.

Outside of Sonic - Sega's biggest hits are Tennis (360), NFL 2K5 (Killed by NFL exclusivity to Madden), Streets of Rage (1990), Crazy Taxi, Super Monkey Ball, and Virtua Fighter.

Crazy Taxi would translate well to this gen. Streets of Rage would have to be completely redone - but it has potential. Virtua Fighter simply doesn't have the characters or plots to keep up with SSF, MC, SC or Tekken. It was only big because it was the 1st 3D fighter.

They have a couple of niche titles that sold 1mm copies. Bayonetta, Shenumue, Valkyria - but if you are going to sell 1mm copies - you can only really spend $20mm on development.

MRSEC - I love your idea of Episodic Shenumue. Spend $10 million per episode. I think that could make a fortune. They should also port Baynetta 2 to PS3 and Xone.

[Loadedklip]

"Virtua Fighter simply doesn't have the characters or plots to keep up with SSF, MC, SC or Tekken. It was only big because it was the 1st 3D fighter.
"

FEW people actually care about the story in fighting games. It's the gameplay and the accessibility. Virtua Fighter is a deep fighting game but unfortunately is TOO deep compared to Tekken and Soul Calibur. That is why is is not as big.

"Sega has failed to translate Sonic to the 3d world."

Sonic stags in Sonic Adventure 1 and 2 are fantastic. Unfortunately for whatever reason they keep changing it.

[dcj0524]

Imo Sonic Colors was even better than the adventure titles minus story of course. They finally found a good formula for 3D sonic that people loved (Unleashed ,Colors,Generations) then for unknown reasons change it (Lost World) or shit on it (Boom)

[Wonderful101]

That's the result of quantity over quality. At least when your game isn't Fifa, CoD, or AC anyways.

[AKR]

The 3 time Sonic deal failed due to the low quality of the games, even if it was on another set of platforms.

Bayonetta 2 is another story. Platinum IPs are known to under perform, so, there's no guarantee it would have sold any better. Bayonetta 1 barely broke 1 million on the PS3 / 360.

Oh well. They made their bed, now they have to sleep in it.

[Amigaengine]

Sega, let Platinum use the Streets of Rage IP.

[TheCommentator]

Why is it almost always a Japanese company that is going under financially? Do they have to stick to outdated ideas in order to stay popular in Japan? I'm just curious, not bashing, but they very rarely advance any genre with new ideas any more. Back on SNES, no western studio made anything worth playing but look at them now...

[ZeekQuattro]

Most games Sega publised over the years flopped hard. V. Chronicles, Binary Domain, Vanquish, Sonic Boom, Colonial Marines, Resonance of Fate you name it it most likely flooped. There is plety of blame to go around but its mostly Sega's fault. Its sucks that Sega has fallen to low. I was a big Nintendo and Sega console fan for munh of the 90s.

[TheRacingX]

Sega has franchises and IP's they forgot how to make them great.... Panzer Dragoon, Shinobi, Sonic Adventure, Crazy Taxi, Clockwork Knight, Virtua On, Skies of Arcadia, Phantasy Star, Shenmue, Jet Set Radio, Eternal Champions, MadWorld.... get these in the hands of capable teams and you will sell copies.....

[SegaGamer]

Then stop making a mess of your games then SEGA, it's simple really.

It's unbelievable how they can keep making mistakes like they do.