Well now if this don’t get the goat NOTHING will. First – before I print this interview I made a LOOOOOOOOONG rant about this, the PS2 launch and Sega at the Mobius Forum. I urge everyone to read it because I’m not sure (after reading Tristan’s news reply) if I understand the full impact of this myself as its pretty danged big. So I _REALLY_ want people to read and reply and sorta get me straight if I’m wrong on some facts, as well as getting input from others on this…. The post is located here and opens in a new window.
Note: Please excuse the “cute” theme on the Mofo right now. ^_^ We’re sort of in the middle of a sanity lapse.
Now for the story that I’m sure you ALL want to read – Sega goes Multi Platform verbatim from Reuters…
TOKYO (Reuters) – Struggling Japanese game console maker Sega Enterprises Ltd forecast on Friday a fourth straight net loss, and unveiled ambitious plans to shift into software provision to move back into the black.
The projection of a consolidated net loss of 22.1 billion yen ($204.2 million) for the business year to the end of next March was revised from an earlier estimate of a 1.5 billion yen net profit.
Sega attributed the loss largely to an 18.5 billion yen loss from its recent decision to cut the overseas sales price of its mainstay Dreamcast (news – web sites) game console to combat a competitive threat from rival Sony Corp, which launched its snazzy PlayStation 2 console in the U.S. on Thursday.
“We might have had good demand without the price cut but we wanted to achieve cumulative total sales of 10 million units by March,” Hideki Sato, who will become chief operating officer (COO) on November 1, told a news conference.
Analysts expect even fiercer competition next year when Nintendo (news – web sites) Co Ltd and Microsoft Corp launch new consoles.
Sega tried to calm concerns by announcing a far-reaching new business strategy, including a future plan to provide its game software to rival makers’ consoles.
We are already in talks with a few foreign firms”, Sato said when asked about licensees. He declined to give details.
That transformation into a software provider from a hardware maker marked a drastic, and welcome, policy shift, analysts said.
Sega declined to specify for which rival game consoles it plans to make software, and emphasized it would not withdraw from the Dreamcast hardware business.
“We applaud the company’s decision to shift its focus to providing content and away from the loss-making home game hardware business even though it isn’t pulling completely out of hardware,’ said Nomura Securities analyst Yuta Sakuai.
“The fourth straight annual net loss is a blow to Sega, but it now has a better chance of returning to profit next year”.
Hefty Loss
Sega, the world’s third-largest maker of home video game players, said it sees group sales of 320 billion yen for this business year against an initial estimate of 336 billion yen.
It slashed the price of Dreamcast to $149 from $199 in the United States on August 31, before the PlayStation 2 debut, followed by a reduction in Europe in September to 149 pounds from 199 pounds to solidify its footing before Sony’s launch.
“The loss has been expected since the console price cuts, because the company had been making a 1,000 yen loss per machine even before the price reduction,” Nomura’s Sakurai said.
The news came just before the Tokyo stock market closed and Sega shares ended down 31 yen or 3.68 percent at 811 yen.
In the business year ended last March 31, Sega posted a net loss of 42.88 billion yen. Its president resigned to take responsibility.
For April-September, Sega sold 1.06 million Dreamcast consoles, boosting cumulative sales to 5.87 million.
It aims to sell 2.1 million Dreamcast consoles in North America in the six months to next March, 770,000 units in Europe and 730,000 in Japan to try to achieve its post-launch target of 10 million by next March.
CSK Corp, which holds a 17.2 percent stake in Sega, also revised down its estimate, forecasting a group net loss of 11 billion yen, against its previous forecast of a net profit of 300 million yen.
Drastic Move
Sega’s new business strategy includes a plan to seek to license the Dreamcast design technology to manufacturers of personal computers, audio-visual equipment and cellular phones to increase compatible PCs and other devices.
“The company is heading in the right direction by trying to boost loyalty income through its attractive software library,” Deutsche Securities analyst Takashi Oya said.
But I am not convinced the company can make a decent profit from licensing the Dreamcast technology.”
Nomura’s Sakurai said Sega’s partial move away from making game boxes would help rival game makers Sony and Nintendo Co Ltd as well as U.S. Software giant Microsoft Corp, which plans to enter the market next year with its Xbox machine.
“Sega’s decision will be positive for rivals, meaning less competition in the hardware business and offering a possible new strong partner to provide games.”
If this means what I think it means – then Sega may not be making any new hardware, but then again – I’m not sure if I read the article right. O_O I urge and ask everyone to GO HERE, read my rant, and then please post on it. I’d like to get the facts straight on just what this means and whether its as good or bad (a double edged sword) as I think it is. Claricication and input please.