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Op-Ed: Why Sega’s Drift Away From Console Games May Be For the Best

Console games aren’t profitable, apparently.

Editor’s note: It’s 2023 and this hasn’t aged well. Enjoy!

The Sega of 2015 is not the Sega of your childhood.

This seems like an obvious statement, but nowhere was it made clearer than on January 30th when Sega announced that it was closing its San Francisco offices, laying off hundreds of employees, and positioning their business around mobile and PC. Why are they taking such drastic measures? Because they’re down about 200 million in net profit from 2013 (according to this Gamespot article), and they don’t have a Nintendo-sized war-chest to get them through the hard times. Console gaming isn’t bringing in money like it used to, though to be fair, name a recent Sega-developed game that you enjoyed (Sega-published is a different story). Maybe Yakuza: Dead Souls if you’re into that sort of thing? Mine would have to be Sonic Generations and I’m still unsure if I actually enjoyed it or if I just enjoyed suffocating under the game’s nostalgic blanket.

“At least we’re not in Sonic 06!”

Point is, Sega hasn’t developed a memorable console game in a long time. People get on their case for how much Sonic games are crap, but hey, at least they never stop trying with Sonic (well, not Sonic Boom, but Sega didn’t develop that one). At least they’re putting some effort in his direction, and they should. He’s the reason people know who Sega is. But outside of Valkyria Chronicles, Yakuza – which has a razor-thin Western presence to begin with – and Sonic reboots, can you name a Sega-developed console game that’s stood out in the last six years? I don’t know what the Sega brand name means anymore. In the Master System and Genesis days, it was Alex Kidd, OutRun, Phantasy Star, Golden Axe, Streets of Rage, Toe Jam and Earl, Kid Chameleon, Shining Force. But the end of the Genesis-era was nearly twenty years ago. Hell, Sega quit making games for their own consoles nearly fifteen years ago now. Add to that the Japanese gaming industry’s identity crisis, and you see Sega doing exactly what they’re doing: cutting costs by cutting consoles and hoping that PC and mobile will save them.

Sonic Boom 2: Still Booming (iPhone exclusive, 2016)

And frankly, good for them. I’d rather Sega be upfront with the direction that they’re taking – knowing that it will piss off a ton of people – than try and pump out crappy game after crappy game on console and pretend like all is well (they may continue to produce crap on PC and mobile, but I’ll never know ’cause those aren’t my play devices of choice). Businesses have to evolve with the times, and for the majority of game companies today, console development is an inescapable money pit unless your game sells about ten million copies. We as gamers may not like the directions Sega’s taking, but ultimately, the company has to do what they think is best. And I don’t think any gamer can begrudge them for that.

This op-ed isn’t meant to be a great big Sega apology cake, though. Sega has made so many horrible choices over the years, it’s unreal. Between 1992 and 1995 – three wallet-busting years – they released the Sega CD, 32X, and Saturn, expecting that people would buy them all with that disposable Clinton-era income. When that blew up in their face, they made a ton of right decisions with the Dreamcast and fans welcomed them back… for a time. Then the PS2 conquered the world in 2000. Sega called it quits on the console business and moved to strict third-party development. This also benefited them, at least at first. Sega’s alliance with the Xbox and Gamecube produced some great games (games that would have arguably been put on the Dreamcast, but hey, at least we got them at all!), like Panzer Dragoon Orta, Jet Set Radio Future, and, er, Billy Hatcher and the Giant Egg. The third-party transition was their last great shakeup fourteen years ago, and frankly, they’re overdue. They shouldn’t have let themselves get to this point, but if it takes losing 200 million to rouse the giant from its apathy, then so be it.

It could be worse: we could all pretend we’re ok with this.

Personally, I think it would benefit Sega to evaluate why their console games aren’t selling, as opposed to just cutting out consoles entirely – but for all we know, they’ve already done that. Maybe they believe that, despite the humongous Xbox One and PS4 user base, there’s no future for consoles and it’s better to take the plunge now before everyone else does. Ever since the Master System days and in the arcade, Sega’s always been a trend-setter, always the ones to jump in the pool first to tell everybody the water’s fine. I’m not saying that Sega’s predicting the end of consoles as we know it or anything – I still believe their decision is based on loss-of-profit versus prophetic insight – but we’d all be fools if we looked at the current gaming landscape and said we expect it to stay the same. Perhaps we’ll see more mid-tier companies cut their losses and move to mobile and PC development exclusively, instead of dying off outright. And video game companies staying alive is always a good thing. Even if I’m not in a company’s key demographic and even if I don’t buy their product, if they’re able to thrive and keep hundreds of people’s jobs going, I’m all for it.

Running as far away from Sega as possible.

So Sega, I’m glad you’re doing what’s best for you. We’ve had some good times and I will always cherish that. But… who are we kidding, we’ve been distant since Sonic Heroes. This new development in your life just confirms to me what I’ve already known: we’re going our separate ways. I’ll always cherish the memories you’ve given me, but I can’t accompany you down that path. I hope the future works out well for you, though. We’ll always have the 90s…

8 replies on “Op-Ed: Why Sega’s Drift Away From Console Games May Be For the Best”

I don’t think it was ever clearly stated Sega was complety exiting console gaming. As far as money Sega Sammy has like 5 billion dollars in assets. They are just restructuring there console games business. And most of the restructuring is downsizing SOA. Which frankly no longer has a need to be so large. Some speculate the move to SoCal is to consolidate with Atlus offices which are in SoCal. Sega is making a lot of console games in Japan. They just aren’t bringing them out here as much. For instance they have Phantasy Star online 2, shining resonance,yakuza zero. Some Puyo Puyo games, soccer manager series, fighting climax, Hatune Miku. Most have not released in the west. I’m think they will focus more on mobile games is what I’ve read since there games like hero bank (which is getting a 3DS release.) are doing quite well for them. But the exit from the console business is a little overblown. But Definetly there games are far more Japan focused now. I also read that that Sonic would continue to be marketed aggressively so I wouldn’t count out another console game. I think the exit of Sega making console games has been largely overblown.

Hmm… that’s a shame, in a way. I was really hoping Sega would have to hunker down and rethink their complete focus and strategy. I suppose they still might, but the way you make it sound is that they’re just patching up the wound and moving on.

Also this is the kind of move that people are clamoring for Nintendo to make as well. I also forgot to mention another part of the problem is console gaming is more or less dying in Japan. This is something Nintendo will eventually have to face as well. As Wii U and PS4 are doing very poorly in Japan compared to in the US.

After spending my early childhood watching that blue logo swipe across my screen and hearing that digitized “Say-Gah” I knew the writing was on the wall when the Playstation and Saturn came along. I summed up the two and made a leap of faith by turning to the new kid on the block and I don’t regret it. Sega had a bloody good run and lets be honest while they did seem to be constantly catching up to Nintendo in the 80s they were really the only company that could challenge them in that time and that is some achievement in itself. It is sad to see Sega pull out entirely now from consoles but from a nostalgia/retrogamer’s point of view it makes dusting off the SMS/Mega Drive/etc all the more sweet an experience.

I know thats no consolation to those who lost their jobs and as someone who lost his job recently I can sympathize at least.

I’m sorry to hear about your job, Tony. I hope you find a new one soon, man.

Yeah, the Dreamcast was starting to recapture the glory of Sega during the Genesis days, but it never really got the chance. They’ve been running on fumes for years now, with only a couple exceptions.

Ya for me anyway the last time SEGA was really inspired was the Dreamcast. It carried over into the Gamecube and PS2 a bit too I suppose. Now most of their great games are just With Sega as a publisher. It’s their second parties Devs who do the really good games. Like Sumo digital with Sonic all star racing. Like their biggest thing now is Hatsune Miku I supose. But that hasn’t really caught Fire in the West. Although I supose it does have its fans.

Sega’s retreat from the Western market support is a little sad, but it has just as Tony said, it makes playing some of the older Sega consoles much sweeter, and somewhat of a revival of interest in retro for me. I look at quite a few of the last games made for PS3 and XBOX 360 and hardly any had an actual Sega employees working on them. What I can tell is the core of AM2, Amusement Vision, Smile-bit, and all the other developers that did it right during the Saturn and Dreamcast era left a while ago or got promoted to take the place of sacrificed leaders from mid 2000s on. Give me the 16-bit era Sega over much of this and I will never touch a cell phone game that bears Sega’s logo. If they are leaving the console business, its probably for the best.

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