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SEGA talks PS3 & overall industry 3rd-party support for Nintendo Wii

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Jun 30, 2006, 2:59:09 AM6/30/06
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http://www.dlmag.com/1899/sega-talks-ps3-wii.html

Sega Talks PS3, Wii

Sega, everyone's favorite ex-console developer, is apparently on-board
with all three next-generation consoles, making them one of the first
developers to confirm support for all systems. In the interview, given
to GameDaily BIZ, Sega comments on the PS3's price a performance, the
Wii's third-party support (hopefully this won't be Gamecube 2), and how
programming for each of the upcoming (and, in the Xbox 360's case,
current) consoles is different. Overall, it's interesting to see how
the developers vide the next-generation consoles, since they are the
ones who get to see all the details on each system before the rest of
us.

Sony PS3Sega of America's VP of Marketing, Scott Steinberg, began by
expressing Sega's support for all three of the next-generation
machines, with Sonic the Hedgehog scheduled to debut on all three as
well as serving as a launch title for the PS3. "...Sega is supporting
all three platforms, all three next- and new-gen platforms at launch.
So we've converted a lot of our existing brands and new brands to
next-gen launch titles. We've got Sonic the Hedgehog in its original
naming convention shipping on the PS3; and of course it'll be on the
[Xbox] 360 as well, but it'll be a launch title for the PS3. We have
Full Auto 2: Battlelines, which is a sequel off of our 360 SKU last
year, that's shipping with the launch of the PS3. Then Virtua Fighter 5
will be in March of the following year, so we've got three games out of
the gate supporting PS3," he said.

Continuing to speak on the Nintendo Wii, Steinburg said, "On the
Nintendo Wii platform, we've got another Sonic game, completely
different and built just for the controller and the new system. That'll
be shipping probably in March as well. And Super Monkey Ball Banana
Blitz will be a launch title also on the Nintendo Wii. ...The 360 we
continue to support; we're shipping in June Chromehounds, which is a
massively Xbox Live oriented game, a mech game. And we have lots of
plans to be players on all three consoles]. We're not necessarily
picking one or the other; we have the capacity and scale to support all
three."

Nintendo WiiHe went on to comment on how he feels Sony's new rig will
hold up in the gaming world. When asked if he thought that the
$500-$600 PS3 price tag was too high, Steinberg replied, "...I mean, we
know the price of the consumer electronics is over $1000; I think just
about every analyst I've seen write a report pegged it in that range,
so there's no real surprise there. I think it's an expensive device,
but it's a very powerful device. Their job is to convince the world
that Blu-ray has a high utility and delivers on a promise, a value
promise, and I'm sure they'll sell out." He also made some decidedly
disturbing comments about the Wii's third-party support. "...I've not
seen a lot of third parties developing [on Wii], so they're behind.
There's a bit of a design, creative learning curve on how to fully
exploit the nunchuks and Sega is already thinking about its second
generation software. So if they're not already here, they probably
weren't on board at the beginning and the companies are going to have a
harder time thinking about ways to innovate and Sega's already thinking
second generation."

So, in a nutshell, Sega's behind all three machines but feels that
Sony's PS3 will sell out and that the Wii needs more third-party
support. If his predictions turn out to be correct (and I hope that
he's way off), then this might turn out to be a repeat of our current
generation of consoles, which saw Nintendo's Gamecube losing badly to
the Xbox and PS2. Hopefully Nintendo can pull some third-party support
together before it's too late. While I'm not sure I agree with
Steinberg's assessment that the PS3 will sell out, I do have a feeling
that Sony will make a fortune off the machines even with the enormous
price tag. We'll just have to wait and see what happens, won't we?

.............................................................................................................................

http://biz.gamedaily.com/industry/feature/?id=13120&page=1


Sega's Scott Steinberg Talks Next-Gen

We had the chance to sit down at E3 with Sega of America's VP of
Marketing, Scott Steinberg (right), to discuss Sega's approach to
next-gen consoles, their thoughts on the Wii and the expensive pricing
on PS3, as well as the publisher's new emphasis on Western development.

GameDaily BIZ: So let's start off with a top line view. What's Sega's
strategy on next-gen consoles?

Scott Steinberg: Top line, Sega is supporting all three platforms, all
three next- and new-gen platforms at launch. So we've converted a lot
of our existing brands and new brands to next-gen launch titles. We've
got Sonic the Hedgehog in its original naming convention shipping on
the PS3; and of course it'll be on the [Xbox] 360 as well, but it'll be
a launch title for the PS3. We have Full Auto 2: Battlelines, which is
a sequel off of our 360 SKU last year, that's shipping with the launch
of the PS3. Then Virtua Fighter 5 will be in March of the following
year, so we've got three games out of the gate supporting PS3.

On the Nintendo Wii platform, we've got another Sonic game, completely
different and built just for the controller and the new system. That'll
be shipping probably in March as well. And Super Monkey Ball Banana
Blitz will be a launch title also on the Nintendo Wii. So we're
bringing our frontline brands as well as some new IP. You'll be seeing
some new IP that kind of rounds out our efforts on the two new
platforms. The 360 we continue to support; we're shipping in June
Chromehounds, which is a massively Xbox Live oriented game, a mech
game. And we have lots of plans to be players on all three [consoles].
We're not necessarily picking one or the other; we have the capacity
and scale to support all three.

BIZ: Full Auto was a 360 game, and now the sequel is a PS3 exclusive.
Why is that if you're supporting all three? Is it just perhaps an
exclusivity window?

SS: We haven't announced a 360 SKU, so we're exclusive on the PS3 right
now.

BIZ: So, basically it's coming but Sega isn't ready to announce it...

SS: [laughs]

BIZ: From your perspective though at Sega, is there one advantage or
disadvantage to any of the three platforms?

SS: We have to be platform agnostic and it's definitely a different
development approach for Nintendo's [console] than the other two. There
isn't yet a lot known about what Sony is doing online, so there's kind
of a question mark there and obviously we know a great deal about what
[Xbox] Live is. All the cards haven't been revealed from the deck in
that instance, but the two next-gen platforms... we're taking a
slightly different strategy with them as opposed to Nintendo's, which
has such a unique architecture to it that we mentally really have to
think differently.

BIZ: One of the supposed advantages of developing for the Wii is that
it should cost far less than developing on Xbox 360 or PS3. How much
would you estimate Wii development to be on average, or how much less
than 360 or PS3 do you think it is?

SS: Yeah, I've been asked this question a lot and it's difficult to put
it [in terms] of the kind of relationship you want, headline type
relationship, because it's like buying a car... You can buy a $100,000
car or you can buy a $20,000 car. Next-gen games don't automatically
cost $20 million dollars. It really depends on what you want to create.
And you can spend, and people do, spend $15 million on today's gen
games. So, there's no doubt that Wii is a more affordable [console] for
developers and publishers to build games on; it's much more analogous
to the GameCube. And there's no doubt that you can spend a lot of money
chasing billions of polygons on the 360 and PS3, but you also don't
have to. I think the industry uses the 2X factor on next-gen games and
that's certainly a decent rule of thumb-it doesn't always have to be
that way-and we're far below that on the Nintendo Wii. There's no
need-well you can I guess-but there's no need to go that high.

So, family friendly, by that definition you're not trying to do a lot
with violence and with guns, and so on the Nintendo Wii we're able to
cost control a lot better. I think the economics with how the machine
is going to be more affordable for the family and having games that are
probably a bit more affordable for the family is really going to strike
a nice installed base and we're one of the few third-party companies,
as Sega, that has had success on GameCube and quite frankly it's easier
to bring that success to the Wii because we've already introduced our
brands to the [previous] platform holders.

BIZ: Do you think this affordability is going to allow for much greater
third-party support on the Wii than Nintendo has seen on previous
consoles?

SS: Well, we have always supported Nintendo, so we're one of the top
third-party companies, and we're the top third-party company on
GameCube, so I would think they would have to rethink their strategy if
they're not building Wii titles. I recently got back from a little tour
around, and I've not seen a lot of third parties developing [on Wii],
so they're behind. There's a bit of a design, creative learning curve
on how to fully exploit the nunchuks and Sega is already thinking about
its second generation software. So if they're not already here, they
probably weren't on board at the beginning and the companies are going
to have a harder time thinking about ways to innovate and Sega's
already thinking second generation.

BIZ: What is Sega's perspective on the PlayStation 3 pricing? Doesn't
$499 and $599 seem like a bit too much?

SS: I think it's within expectations, quite frankly. I think there's a
lot of much to do about what we all thought they would have to do. I
mean, we know the price of the consumer electronics is over $1000; I
think just about every analyst I've seen write a report pegged it in
that range, so there's no real surprise there. I think it's an
expensive device, but it's a very powerful device. Their job is to
convince the world that Blu-ray has a high utility and delivers on a
promise, a value promise, and I'm sure they'll sell out.

We're obviously staunch supporters of the PS3 and we think the platform
is going to be successful; they just have a job to do in selling and
marketing it to not only gamers, but they've also got to play with the
Blu-ray platform in the consumer electronics market as well. So they've
really got to do two things with their tech to get this platform to be
successful.

BIZ: It's one thing for the hardcore gamer to put down $600, but do you
honestly feel that the average, more mainstream PS2 user will do so?
Are you concerned that this price may slow the adoption rate?

SS: In some ways, of course, naturally. We've never seen a piece of
video game equipment cost this much ever [Actually, the 3DO retailed
for $699 and we all know how well that went - Ed.]. It's definitely new
territory, but again I look at on the arcade side, we're bringing
Virtua Fighter 5 from the arcades to the PS3 in a relatively few number
of months, and there is going to be very little if any noticeable
degradation to the graphics. So, effectively you've got thousands of
dollars worth of arcade tech in a machine that's 500 bucks, 600 bucks.
So there's a lot of value in that machine.

It's a matter of how Sony can bring that to life with their games, and
there are some pretty awesome games coming out. Definitely, the [price]
is a concern, but globally the brand is so strong that when you think
about the marketplace in Japan, North America and Europe, Sony has been
the clear winner, so there's a lot of marketing momentum and sales
momentum that they're going to absolutely carry into the PS3. To ignore
that and sort of use price-I mean PS2 was $299 for a long, long time,
so there's definitely a band of consumers who if they're fired up about
a piece of software or multiple pieces of software, they'll pay it.
Whether that's after the 5th million or 6th million unit is sold,
that's super arguable and they're going to have to lifecycle price the
hardware in a way that brings it to the masses, I would think
relatively soon, because it is expensive. For a lot of families that's
too expensive.

BIZ: Sega recently acquired Creative Assembly, Sports Interactive and
others as part of its new "Western focus" planning. How did this change
in strategy come about?

SS: Well, it's easy to peg the moment. It was when Sammy acquired Sega,
and at that point the mission was to bring the company back to a point
of leadership on next-gen. We kind of knew where the die had already
been cast on existing gen, but the timing was outstanding in 2004,
early 2004, to kind of make the determination that the hardware
transition is upon us. Let's make capital investments now that'll bear
fruit 2, 3, 4 years from now when the new machines are just taking
root. And that was not based on Japanese content, but was based on
blending and balancing a third, a third, a third in the three major
territories, and to truly think globally you have to have products
sourced in those territories to really appease the marketplace.

So it was a part of our overall capital infusion, which is what fueled
the next-gen development; it was brought about by the Sammy purchase,
and the challenge of building Sega back up is a definite mission
brought by Mr. Satomi, who is the chairman of Sega-Sammy.

BIZ: Since we only have time for one more, let me throw in a question
for all the hardcore gamers... Is Shenmue III ever going into
production?

SS: I really can't answer that, although I will say that we look very
closely at our IP and a few days ago we [announced] the comeback of
Golden Axe... and I know a Sega guy who worked here in the early '90s
on Genesis and touched a lot of the core brands in a prior life, so
having come back here in 2004 when we started to relaunch the company,
part of our mission is to look at our library of IP and be real
selective and smart about which ones we bring out, which ones are
"next-genable" and creatively that we bring something new to the table
with them. I never want to comment on any specific one, but that is a
big part of our strategy... taking advantage of what we have, and of
all companies in this industry, there aren't very many that have as
many great brands as Sega does across all of its hardware iterations as
well as arcade IP.

BIZ: Thanks for your time, Scott.

Profile:
Scott A. Steinberg
Vice President of Marketing
SEGA of America

History: Originally with SEGA during the Genesis days in the early
'90s, Scott brings to SEGA more than 17 years of experience marketing
entertainment and technology products at companies such as Roxio,
Liquid Audio, Eidos Interactive, and Crystal Dynamics.
Highlights: He led Roxio's marketing and e-commerce efforts and
orchestrated the marketing re-launch of the company's digital music
subsidiary, Napster 2.0 as a legal digital music service.

Currently: As VP of marketing for SEGA of America, he is responsible
for all of SEGA's marketing, consumer brand, and e-commerce efforts in
North America, & he participates in SEGA's global product planning
group designed to evaluate development and licensed IP

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