EA In Talks For Sega Partnership

Thanks to an anonymous reader for pointing out a Reuters report (via Yahoo News) that Sega have received an offer from Electronic Arts to form a North American sales alliance. The information, which comes from new Sega boss Hisao Oguchi, is scant on the actual details, but could be anything from a partial buy-out to simply a publishing alliance, with Oguchi saying "We have been badly beaten in the U.S. consumer video game market... If we can't resolve this on our own, then it's better to join hands with someone." Sega are still considering the deal, which could easily go the way of Sammy and Namco's failed discussions, and also denied rumors that Microsoft are interested in taking a stake in the company.

The new possibilities

[AndyAMPohl]

I guess Sonic the Hedgehog will be on the sidelines in Madden 2005! I'll buy it.

AP

Why, Sega Why?... Ok, I know why, but still!

[Painaxl]

I understand Sega's financial difficulty (meaning I understand that they have some, I'm not that good with business models), but why would you consider partnering with your biggest U.S. competitor in the very market (sports) that you've invested most of your North American development in? To me, this just doesn't make any sense.

Re:Why, Sega Why?... Ok, I know why, but still!

[Albert Pussyjuice]

I'm going to play fast and hard with numbers here so watch out if something doesn't quite add up but anyway...

let's suppose Sega Sports spent 10 dollars on development to corner 33% of the sports game market. Now, EA spends 10 dollars to get their 33% of the market, leaving 33% for Company X. Now, with a business alliance, Sega can throw in 5 dollars and EA can throw in 5 dollars to get 66% of the market. Or, if we want to get nuts, both companies can throw in 8 dollars and use some of the excess for adver

They need to cut loose from Sega America

[Gizzmonic]

Sega America is the largest source of problems for Sega Japan. In the early to mid-nineties, SoA's CEO Bernie Stolar's "it's a different market" idea kept most of the Saturn's best games from reaching US shores.

During the Dreamcast era, SoA CEO Peter Moore played (mostly) the same fiddle. Sports titles received close to 100% of advertising money (most of the rest went to the flop called Space Channel 5). He let the DC fold with a whimper as soon as the PS2 was announced. Post-DC, his advertising spend

Re:They need to cut loose from Sega America

[Albert Pussyjuice]

Well, isn't it a different market? It seems to me that the biggest hits in Japan haven't always been the biggest hits in North America. I haven't checked out the global market much. I'm curious though.

Was GTA a big hit in Japan? Was it even sold there? I remember reading about Dance Dance Revolution being a huge hit in Japan and only being a niche market in North America (although, I seem to see Dance Dance Revolution everywhere I go). Does someone have a table of top ten selling video games for N. America

Re:They need to cut loose from Sega America

[Babbster]

I don't disagree that SoA has made questionable decisions but pumping their sports games is necessary if they want to continue publishing them given EA's constant domination in that market. Despite the fact that the people who have played both 2k3 and Madden 2003 believe 2k3 is the superior game, EA continues to lead the market simply on the basis of name recognition and marketing.

Re:They need to cut loose from Sega America

[Gizzmonic]

During the 2003 season, I didn't see a single commercial break in any football game which did not include an NFL2k3 advertisement. And I watch a lot of football.

That type of exposure costs millions. And when Sega of America has to decide between continuing to spend tens of millions on this ad campaign (which obviously hasn't worked) and cut the budget by 50% and promote a variety of games, they've decided to continue the saturation advertising. And in my opinion, that's the wrong choice.

Re:They need to cut loose from Sega America

[Babbster]

How does it help to advertise 50% less and advertise many games instead of a few (or one)? Your logic - and more importantly your understanding of advertising - is flawed. The objective of television advertising is mindshare, making more people aware of your product. If you can't do that with ONE game and a ton of advertising, how do you do it with "a variety of games" and half as many ads?

Besides, companies try to market products to people already inclined to have interest in the product. It's an obv

Re:They need to cut loose from Sega America

[Gizzmonic]

I don't appreciate your tone. I am not a marketing genius, however I do have a background in communication theory. But here on Slashdot, we're both just pundits. The only difference is that one of us is an asshole about it.

Mr. Marketing Genius, you are arguing what communication theorists call the "magic bullet" theory. In other words, people receive a communication, and they decide to act on it. The louder you broadcast, the more people will hear.

If it was as simple as this, then the sales for games

Re:They need to cut loose from Sega America

[Kris_J]

What's particularly stunning is that pretty much any avid video gamer will tell you that sports titles don't sell as well as non-sports titles. Major liquidations of stock will ultimately leave the retailer with a bargain bin full of only sports titles. Sell games on eBay and the sports titles will consistently get lower prices than the non-sports titles. Yet for some reason some executives just don't give the non-sports titles a fair go.

As a seperate point, language translation aside, we wouldn't have t

Understandable from EA's point of view

[Kethinov]

Seeing as how EA has been getting a record number of people complaining and quitting [stratics.com] from their recent Ultima Online rate hike [slashdot.org], I can see why EA is looking for a corporate partner to lean on.