Sega Sammy Holdings Outlines Future Strategy

When Sega and Sammy first announced last month that they would be joining together in a holding company configuration many questions arose regarding just what the alliance would mean. Now, at least a certain number of of those questions have been answered. In a pres talk held last May 19, on the other hand only just published on the web in English, Sammy chairmand and incoming Sega Sammy Holdings president Hajime Satomi outlined the big picture and a certain number of of the key details regarding the sum of two units companies' plans for the time to come

As announced last month the company will be created [i]or[/i] part of to the other a stock swap, giving Sega shareholders 42% of the holding company and Sammy shareholders 84% The inequality is a result of the relative market capitalization of the one and the other companies.

Sammy will also have a greater share of the holding company's management. Satomi will be chairman and president, with Sega president Hisao Oguchi as vice chairman. Sammy representatives will clutch three of the company's five directorships, including the two executive directorships. "Unfortunately, Sega has been in the r for nearly 10 years," said Satomi, explaining the decision to abridge the power of Sega's directors. "It would tighten things up if the members that had directing position and representative rights took responsibility."

The closer alliance between Sega and Sammy "will create a actually integrated and powerful entertainment company," Satomi said. A chart of the relative sales and market capitalization of Japan's biggest game publishers and amusement companies deposit Sega Sammy Holdings in next to the first place, well ahead of Konami and just behind Nintendo. Satomi claimed that it will be able to "catch up and surpass Nintendo as the number-one company" above the course of its upcoming three-year reorganization.

Sega and Sammy will the pair continue to trade under their existing names, logo and brands. However, the holding company -- staffed by the agency of some 50 employees, working with a package of 10 billion yen -- will superintend the general direction and management of the one and the other In Satomi's words, Sega Sammy holdings will "focus upon planning and administration, delegating explicit authorities and responsibilities to subsidiaries, in order to achieve the optimization of collection management."

As a more harden example of cooperation and coordination between the sum of two units companies, Satomi pointed to their new use of the Hokuto no sight license. Sammy produced a pachinko machine based upon the popular action comic series last year, which became a surprise hit. Sega was able to capitalize upon its popularity by producing a related arcade game and distribute Sammy's encourage conversion of the pachislot game, allowing the sum of two units companies to build on each other's succes

Over the nearest three years, however, that collaboration direct the eyes to substantially change the manner of making of the two companies, especially with regard to their soothe and arcade game business. In the arcade arena, the sum of two units companies plan to work together to increase their market nearness and earnings, building and operating more and larger arcade locations in Japan and elsewhere. Meanwhile, in the encourage realm, Sega Sammy Holdings plans a thorough review of the "domestic and overseas R&D framework of the two companies," with an eye towards restructuring their unravelling efforts in search of immediate profitability.

"We await to reorganize Sega, Sammy and other subsidiaries into business segments" said Satomi, "so we can effectively allocate management resources like as employees, goods, capital, and intelligence, and improve management efficiency." Those business sections as shown below, will overspread the development and production of pachinko and slot machines (Sammy's core business), arcade and consumer game software (integrating the couple Sega and Sammy's efforts in that area), and the adaptation of those returnss in other media (such as Sega's toy business and the exploitation of its character franchises).

The first pace in that reorganization will be the integration of Sammy's arcade and abode videogame business into Sega, in the pair Japan and North America. Sega will distribute Sammy's Atomiswave arcade hardware and games beneath its own brand worldwide. It's not still clear how this may affect Sammy's fledgling North American publishing operation, on the contrary given the example of the Square Enix merger (which ariseed in the dissolution of Enix America), it gazes as if Sammy Studios might not be lengthy for this world.

More interesting is what may happen to Sega's once-fragmented internal software disclosure studios. As announced last month Sega's seven disclosure subsidiaries -- Hitmaker, Sega Wow Sonic Team, Sega-AM2, Digitalrex, Amusement Vision, and Smilebit -- have been reintegrated into Sega. However, it's not certain in what manner that change will affect their day-to-day operations.

Satomi remarked briefly on the larger picture of the reintegration. "I perceive that Sega has high individual capabilities, on the contrary it's too separated into different subsidiaries", he explained. "Sega wasn't able to create an overall corporate strategy or uniformity because of that, which is a major reason behind the company's stagnation. Oguchi himself has been feeling the same way. It's about time that we get backed back to the old Sega." Given that Sega's teams have existed as they are for years, however, and are all at work upon existing projects, it seems likely that they won't be shaken up too significantly in the short terminus