Why The Restructure Isn’t What Has Been Interpreted
There has been a lot to take in this morning and things are still developing even now. So much so that things may have been cast aside or misread from the overwhelming amount of information surfacing. A lot of people feel that Sonic, and perhaps even SEGA, is dead due to the actions SEGA is planning. However all is not lost. Let me explain why with ten specific reasons.
1. SEGA’s Subsidiaries Are Okay – A lot of what we’ve read is applying to SEGA of America and a bit from SEGA of Europe. However it was reported that Creative Assembly and Sports Interactive will come out “relatively unscathed”. Atlus, despite no official word that has come out on their future so far, is owned by SEGA Sammy which is basically SEGA of Japan. Relic is stationed in Canada. Nowhere in the statements provided earlier does it suggest any impact on any of these developers. It is safe to conclude that none of them will be affected by the restructure.
2. It Won’t Be Strictly Mobile – Mobile gaming has been taking off. SEGA has been able to capitalize on this. However it will not stick with just mobile. The PC platform was also mentioned in SEGA Sammy’s statement.
SEGA has positioned Digital Games, centered around smart phone and PC online gaming, as a growth area
3. PC & Mobile Are SEGA’s Strong Points – That quote brings me to reason number three. Console gaming is no longer the selling point that SEGA once had. They are doing much better on PC and mobile. Because of this it isn’t so surprising that they have decided to target those two. Why waste resources on what doesn’t work, and what hasn’t worked for a while, and improve on what does?
4. SEGA Is Not Exactly In Financial Ruin – This may come off as quite contradictory to previous articles but, as previously stated, the news has been focused more on SEGA of America/Europe. They are financially troubled but not SEGA as a whole. There’s a certain other SEGA division across the globe in Japan. And it’s taking off. SEGA of Japan is popular, rich, and widespread. Games like Puyo Puyo and Hatsune Miku are selling majorly in Japan. SEGA merchandise in Japan is everywhere. SEGA live streams, such as the one from last year’s Tokyo Game Show, don’t get a mere few thousand viewers. They get 300,000+. It’s safe to conclude that SEGA of Japan is just fine. They’re not going anywhere. In fact even if the rest of SEGA’s divisions died out SEGA of Japan could even hold on their own and survive. This doesn’t even count the money SEGA Sammy has. Remember when they bought Atlus for 14 billion yen? Right now their stocks are rich. This restructuring is nothing more than a footnote to them. The $900,000 or so capital previously reported is also somewhat misleading. Why? Because SEGA isn’t the one doing selling or buying anything. It’s the far richer SEGA Sammy. So it’s no surprise that SEGA has a capital like this. Because they’re not the ones in need of a higher capital. SEGA Sammy is pulling the ropes, not SEGA.
5. Sonic Is Getting “Reinforced”, Not Cut Back – The details about SEGA focusing on PC and mobile gaming may have mislead those concerned about Sonic. It’s not getting cut back. It’s not dying. In fact SEGA Sammy specifically mentioned Sonic in their statement
the Sonic and merchandising businesses will be reinforced to establish a structure which can generate stable profits
Business uses a lot of lingo that may not be familiar to the average person but to “reinforce” something in business is not quite the same meaning as people may expect. To “reinforce” something is to change its behavior. Sonic is not generating stable profits. It’s all over the place. So SEGA Sammy intends to establish a plan that can change this. In other words it is putting its foot down on Sonic’s financial roller coaster.
6. Only 2 SEGA Divisions Are Impacted – As previously stated SEGA of America and a bit of SEGA of Europe are feeling some kind of impact from this and SEGA’s subsidiaries will dodge a bullet. However it’s only these two divisions. Nowhere was SEGA of Japan, SEGA’s main base of operations, intending to change. SEGA Sammy isn’t changing itself but more so what it owns. It’s a bad hit for SEGA of America, but only SEGA of America is reeling from this. In fact in SEGA of America’s statement they clearly say:
This move was crucial to keep SEGA operations moving forward throughout North America
So the focus is mainly on SEGA of America. No one else.
7. SEGA Console Gaming’s Future Is Only “Unclear” For Now – The “PC and mobile gaming focus” statement may have, once again, been misleading in this aspect. While the focus is most certainly going to be on those two platforms there was never any line of dialogue in either statement that said they were putting an end to publishing games on consoles. They’ll be downsized in frequency, yes, but not killed. There’s still a possibility at this time of a console Sonic game. Just don’t be surprised if you see a lot more mobile and PC games from now on. Likewise console gaming is still doing fine in Japan despite the growing interest in PC and mobile. It may be the end of an era still as console gaming is no longer a focus like it has been for 14 years but it’s not quite what it seems.
8. The Currently Announced Games Are Fine – Games like Yakuza 5 are not going anywhere. They’re still getting published on their respective platforms and are still scheduled to release like before. Stuff unannounced isn’t so safe but SEGA’s currently known lineup of games is safe.
9. The Focus Has Technically Been In Effect For Over A Year – Think about it. Other than the occasional Hatsune Miku, Sonic, and Alien game where have 80% of SEGA’s games in the past two years have gone? Mobile and PC. The restructure was announced last year but only hit the mainstream today. So what does this mean? We’ve already been experiencing that shift towards PC and mobile gaming. It was just made official.
10. The Entire Plan is To Downsize, Not Kill – This one is a little more up for debate but if what I’ve explained hasn’t already hinted to this it’s evident that the entire restructuring plan isn’t to destroy anything. It’s to tone it down. SEGA of America isn’t dead yet. Just smaller. Games will still be coming out like always. They’ll just be more selective on platforms.
The bottom line? What was lost are the 300 people who are, unfortunately, getting their jobs cut and the San Francisco HQ that SEGA of America is giving up to relocate elsewhere. Sonic is going to keep on chugging. SEGA, especially, is still going strong as a whole. But this isn’t the end of the world. SEGA will be focusing on what has been strong for them while paying less attention to what hasn’t. As previously stated, it’s not a killing but a toning down. Does this essentially mean a killing later on? That’s up for debate. But Sonic and SEGA will be alive by the end of the year. And, considering movies are in the works for Sonic and other SEGA IPs, there is no rest in sight. SEGA of Sammy is putting its foot down them but not kicking them out the door.