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Last Updated: Friday, 19 May 2006, 07:21 GMT 08:21 UK
Sega sets sights on game giants
By Alfred Hermida
Technology editor, BBC News website

Sega stand at E3
Retro heroes were prominent at Sega's E3 stand
The mention of Sega is likely to spark off memories of playing Sonic the Hedgehog on the Megadrive for many.

But those glory days are long behind a company that abandoned its console hopes in 2001, after disappointing sales of its Dreamcast machine.

Instead Sega is trying to reinvent itself as a software powerhouse, building on its iconic games and expanding its range of titles.

At last week's E3 games expo in Los Angeles, the company showcased the games it hopes will fuel its resurgence.

On its stand the latest versions of Sonic the Hedgehog and Virtua Tennis rubbed shoulders with new games like The Club and Chromehounds.

"We need our key heritage brands like Sonic, like Virtua Tennis," said Sega UK managing director Alan Pritchard.

"But we also need to bring new IP [intellectual property], new creativity, different types of gaming experiences, to the marketplace," he told the BBC News website.

Foot in the door

Sega has ambitious plans to become one of the top five games publishers, rivalling the like of Activision, Ubisoft and THQ.

Alan Pritchard
Sega is a bit like Disney. It is associated with being fun. It is safe, clean
Alan Pritchard, Sega UK
It is going through a process of reinvention since it fell on hard times in 2003 and was eventually taken over by Sammy of Japan.

Gone are the days of the Dreamcast. Instead Sega is focused on making games for a variety of consoles by Nintendo, Sony and Microsoft.

"When we relaunched in 2003, it was easier to get a foot in the door with an iconic, historic background," said Mr Pritchard.

But the company entered the games market at a time when its competitors were already well-established.

It has failed to come up with a blockbuster title like Grand Theft Auto for the PlayStation 2 or Halo for the Xbox.

It hopes to catch up with its rivals in making games for the next generation of consoles.

Film appeal

The Japanese company recently strengthened its position in the Western games market by spending $68m on two development studios.

Screenshot of Sonic Adventure 2
Sonic Adventure 2 was one of the last titles for the Dreamcast
It snapped up the London-based Sports Interactive, behind the Football Manager series of games, and the San Francisco-based Secret Level, which is making a new version of the Sega classic Golden Axe.

"Acquisition is part of our future strategy," said Mr Pritchard. "We can present Sega as a global publisher. We can demonstrate success. That was very difficult to do three years ago."

Sega is also one of the few game companies bucking the financial trend of its competitors. Earlier this week it announced that yearly net profits rose by 31%.

Operating profits in the consumer games division are also up, helped by sales of its Shadow the Hedgehog game.

Going into the future, Sega is looking to build up the variety of games it produces, including trying to get the rights for more film adaptations.

It is dipping its toes into this area with a game for the Nintendo DS and GameBoy based on the Paramount film of Charlotte's Web.

"Because it is very young and has a slightly female bent, it sits very well under the Sega banner," said Mr Pritchard.

"But there have been some discussions recently on grander projects."

Mature games

One of the challenges for Sega is balancing its family-friendly reputation with the pressure to make new games such as Condemned: Criminal Origins for the Xbox 360.

Screenshot of Condemned
Condemned was one of the Xbox 360 launch titles
Condemned was a visceral and gory crime game, rated as an 18+.

"Sega is a bit like Disney," explained Mr Pritchard. "It is associated with being fun. It is safe, clean.

"Condemned was the most severe game we've made. We need to be careful in those areas, but I don't think there are areas we would not look at.

"We've rekindled the Sega brand successfully and plan to revisit the Sega branding to take it into next generation and beyond," he said.


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