Sega To Shift Focus To Digital And Social As Packaged Game Sales Decline

By Ishaan . May 11, 2012 . 10:31am

Sega have released their earnings report for last year. Here’s a look at how their major games performed:

 

Mario & Sonic at the London 2012 Olympic Games (US/EU) – 3.28 million [Wii/3DS]

Sonic Generations (US/EU/JP) – 1.85 million [360/PS3/PC/3DS]

Virtua Tennis 4 (US/EU/JP) – 1.04 million [360/PS3/Wii/PC/Vita]

Football Manager 2012  (EU) – 710,000 [PC/PSP]

Yakuza: Dead Souls (US/EU/JP) – 550,000 [PS3]

 

Last year, Sega sold 17.2 million copies of packaged games, worldwide. For their ongoing fiscal year, they presently forecast a far lower 8.9 million. Of course, this estimate may change as the year goes on, but as previously reported, in the face of weak overseas sales, Sega are undergoing a major restructuring in order to focus on established brands.

 

Something of interest jumped out in Sega’s platform mix for the ongoing fiscal year, too. Sega estimate they’ll sell 380,000 units of software across three games on the Nintendo 3DS. Meanwhile, Sega estimate they’ll sell just 600,000 units of retail software across eight games on the PlayStation Vita. Next Hatsune Miku: Project Diva will be among Sega’s Vita releases this year, and should account for a fair portion of that 600K estimate.

 

This makes one wonder just how low sales of their other packaged Vita titles will be. Perhaps more of Sega’s Vita games will rely on digital revenue like Samurai & Dragon? For instance, Phantasy Star Online 2, which is scheduled for release sometime in 2013, will be a freely downloadable title powered by micro-transactions.

 

On a related note, while Sega’s packaged games business is suffering, their social games are thriving. One such title, Kingdom Conquest, has achieved 2.5 million downloads as of March. As a result, Sega said they will restructure themselves to focus on the development of digital and social games for mobiles, smartphones and PC.



  • http://profiles.yahoo.com/u/HAEBCODVH3BGFIHE47BKNDXD2I Jonathan

    man, it’s sad to see so many gaming companies have to put up with the nasty social gaming phase right now. . .

    • Jeremy Barnes

      Let’s be fair here. Sega hasn’t been worthy of being called a ‘gaming’ company for awhile.

      • BadGenome

        I don’t agree at all. Sega has really brought it this generation, both as a developer and as a publisher. My experience this gen would be a lot poorer without Valkyria Chronicles, Bayonetta, Vanquish, Yakuza, Resonance of Fate, and Binary Domain. It’s just too bad those titles didn’t fare so well commercially.

        • Luna Kazemaru

           Could not agree more with you.

        • HeatPhoenix

          Trufax, except Bayonetta, can’t see to get into that for some reason. Picked up a copy last week for cheap. It’s so over-the-top that I can’t stand it.

        • boundries_san

          Sega should advertise their game like how Nintendo does.T_T

          Kid Icarus success can be said is helped a lot from all the advertisement. If only Sega market their game more and of course choose the best time to release a game.(Releasing Yakuza:Black Panther 2 with a minimum amount of marketing vs Kid Icarus which is heavily marketed is almost equal to dead.)

          Don’t forget about Shining series and Infinite Space too there.^^

        • fayt255

           yeah Sega has good games like the ones you mentioned but the problem is not to many people know that Sega has more games other than Sonic.

      • SirRichard

        Let’s be fair here: that’s a stupid thing to say. In what way haven’t they been a gaming company? They’ve been pretty active and their output has been surprisingly varied as a publisher and a developer this generation, rocky start with Sonic aside. How has anything they’ve done not qualified them as being a videogame company?

      • Nemesis_Dawn

        I don’t want to live on whatever world you’re from.

      • boundries_san

        ??? Does everyone now just love to hate everything from Sega even though they still produce quality title?

  • SirRichard

    It’s an interesting contrast, isn’t it? Sony and Capcom are pretty damn confident and optimistic, especially the former in light of its struggles, but Sega aren’t expecting more than 600k sales from eight different titles combined. Sure, the PSV isn’t doing so hot, but Sony seems confident in their ability to turn that around.

    There’s lowering your expectations due to weaker sales, and then there’s being a bit overly pessimistic.

    • http://www.siliconera.com/ Ishaan

      Capcom haven’t said anything about PSV, actually. Namco Bandai didn’t even have PSV listed in their platform mix for the upcoming year. PSV stuff was relegated to an “Other” category, which included six titles for various platforms. 3DS, on the other hand, had 10 titles listed just for it. And PSP? 32.

      Sony’s PSV forecast is very optimistic. It’s going to be interesting to see what they have to show at E3, because I don’t think Soul Sacrifice is going to cut it.

      • SirRichard

        Well, I wasn’t talking about the PSV specifically in relation to Capcom, just that Sega aren’t expecting very much from eight games combined.

        But yeah, E3 is going to be very interesting. They’ve claimed they have 20 unannounced titles lined up for the show, and that’s a hell of a boast.

  • http://twitter.com/RaiuLyn Raiu

    Please tell me Sega doesn’t plan to ditch the retail package boxes and go digital download only… How am I supposed to import the Next Hatsune Miku PD without going through the Japanese PSN???

    • HeatPhoenix

      Whose PSN cards are horribly overpriced on eBay!

  • malek86

    I noticed that they are expecting to distribute only three 3DS titles for the fiscal year, compared to the PSV’s six. That sounds like very little.

    • XYZ_JolteonZ980

      Seems really conservative on 3ds even while that platform has dozen mln hardware unuts out and about.

    • http://www.siliconera.com/ Ishaan

      That was why I included that bit about 3DS/PSV. Strangely conservative on the 3DS front. And those super-low forecasts for PSV software sales makes you wonder if they intend to make their money back through online revenue, like with Samurai & Dragons and PSO2.

    • http://www.siliconera.com/ Ishaan

      That was why I included that bit about 3DS/PSV. Strangely conservative on the 3DS front. And those super-low forecasts for PSV software sales makes you wonder if they intend to make their money back through online revenue, like with Samurai & Dragons and PSO2.

  • http://www.facebook.com/people/Roberto-Armando-Iraheta/775564143 Roberto Armando Iraheta

    This wouldn’t be a problem is their quality wasn’t so poor. Almost none of their first party offerings have been good in over a decade and they’re terrible at marketing their 3rd party games like Resonance of Fate and Vanquish.

    Ladies and Gentlemen. The once great Sega.

    • Darrel Daley

      Yakuza and Valkyria Chronicles are great. 

    • SirRichard

      In over a decade? Mate, just because you haven’t enjoyed any of their games for so long doesn’t mean those games are terrible. Ask around, many people have enjoyed the more recent Sonic titles and Generations is widely considered a return to form, to say nothing of their other series like Yakuza.

      Sonic ’06 was their lowest point, they’ve done nothing but rise since then. I daresay they’ve long since proven they’re over that sort of rot.

    • raymk

      What!?  Sonic DS,colors,Yakuza,Valkyria chronicles,Phantasy Star and another game I can’t quite remember but it came out not long ago.  Man you keep proving to me that you don’t play games man or apparently look at them either.

      • http://wiredjungle.wordpress.com/ DrakosAmatras

        And then there are games that just might linger in Japan but are still pretty good, like 7th Dragon 2020 and Shining Blade.

        • boundries_san

          Which also does not sell so good in Japan due to the lack of good ads there.

          If only they release the game together with the anime as an advertisement method, i am sure the game will sell more.(This Shining Hearts anime should be released together with the game.T_T)

          Hell for any Shining series, they can just said “Tony Taka”Art and all moe lover, will surely goes in drones to buy the game.

      • boundries_san

        Infinite Space is what u miss there.

    • Nemesis_Dawn

      First…what first party offerings? Does Sega have a hardware platform I am unaware of?

      And yes, they are terrible at marketing their titles, but they have made excellent games. If Sega actually had a hardware platform and they made all the games they’ve released this gen exclusive to it, they’d have a better lineup than Microsoft, Sony, and Nintendo combined.

    • boundries_san

      Umm…. are u joking here? They have no consoles so they will never have first party offerring here.

      The lack of marketing is probably their downfall here.

  • http://www.facebook.com/profile.php?id=769970011 Tina Olah

    Go away Social Games, please!! :( *sad Tina*

  • Tanthalas

    Sigh, I don’t really like it when software companies shift their focus to social games.

    • Darrel Daley

      I don’t mind. The gaming market is crowded as it is. Hopefully this gives companies like Level 5 and Atlus a chance to grow.

      • boundries_san

        Man this is Sega lol and Sega is probably one of the better game company minus the no advertisement policy from the upper echeleon.

        And i never heard of gaming market being overcrowded here?lol

        • Fire.fire.kun

          Overcrowded? Domestic gaming markets are practically build up of publisher monopolies.

    • Luna Kazemaru

       its more money for them which will in term be a good thing I see no issue.

    • Fire.fire.kun

      Social gaming is a growing and it’s not surprising people are jumping on board to make money, but in SEGA’s case it seems like an act of desperation.

      Hopefully they meet success and reinvigorate the SEGA brand or at least make enough to make up for the business slump. V:

  • Luis Camargo

    Sega had some great games lately, so I truly hope they can get better sales.
    I truly hope that the numbers for Yakuza Dead Souls won’t compromise a localization of Yakuza 5.
    Also, I really wouls like to see a Valkyria Chronicles in the US again. We didn’t received VC3 =(
     

  • https://twitter.com/A_Beast_of_Prey Equinox K

     I can understand with Sega cutting back jobs,cancelling projects, and restructuring due to the global economic climate the last I read about the company profile, but this seems abit much not to still want to distribute disc companies of games. Not everyone wants to go digital and trying to make everything digital without giving people a choice in the matter isn’t necessarily a good thing.

    Still, I have been very pleased with how Sega has been doing with churning out unique,varied, and good IPs as over the past several years, maybe when things pick back up again they’re outlook on things will change. At any rate as much as I do not care for social games, like with Insomniac and a few other companies branching off into that territory will help somewhat.

    • ShinStar

      What I don’t understand is why did they cut a bunch of jobs from a team who really didn’t have anything to do with their poor sales? My brother was one of them and he was on the Q&A team. They let the crappy higher ups keep their jobs and they hardly know anything about the games being published/developed. I’m talking about SEGA of America by the way (although I feel SoJ is kinda lousy too.)

      I agree with what some people have said here. They did publish some great games, but I feel that they don’t market them very well (hence low sales maybe?) Games like Valkyria Chronicles 3 probably won’t make it here because of it.

      • https://twitter.com/A_Beast_of_Prey Equinox K

         Poor decision making, because even when I heard they were going to do that I could level with why but not with how come considering the games that have come out in the past 4 years. Also the peons are usually the first ones to get axed and it depends on what they deem necessary as a whole. When the Dreamcast went belly up this is why so many of the inhouse studios Sega had either got canned or merged into others. And yeh, even with many of the games that have come out over the past decade, PR has not been the greatest. If anything we get to play the wait and see game on how things are going to go like with everything else going on in the world right now.

        On a sidenote apologies for your brother losing his job, I’ve been out for almost 5 months and I can assure you the outlook for me isn’t the best right now especially considering I may not have internet next week :( . Either way hopefully something will pick up for him.

      • Hinataharem

        Im sorry to hear that. I hope your brother gets a newer, better job.

        • http://twitter.com/Kneewrote Niroth Keo

           I am now working at Present Creative as a contract Art Creator :)

  • Seijien

    Time for a new publisher, Platinum Games. Don’t let Sega drag you down. 

  • XYZ_JolteonZ980

    Scared of what this may mean for the future of Sonic. I guess they will start work on a socialesque aspect to the future of this series? Or branch Sonic out to more sports mini games type arenas? I hope they wont give up in the innovative jrpg realm, after Resonance of Fate they really ought to at least still contribute to advancing that aspect of gaming even though returns on the investment may not be as high as the social digital pieces of cake.

  • usagi_san

    This is question directed towards to the Siliconera readers from the States or Canada: When Valkyria Chronicles was first released, did you receive any sort of advertisement for the game before its release? 

    • http://twitter.com/ifarah12 Gren

      I don’t exactly remember, probably not.

    • Luna Kazemaru

       not really it showed up in the GI mag like once or twice and it wasn’t really much.

    • Luna Kazemaru

       not really it showed up in the GI mag like once or twice and it wasn’t really much.

    • usagi_san

      @twitter-42254023:disqus and @ValkyriaXEdge:disqus  Thanks for answering! If SEGA don’t put some effort into advertising games that they want to see sale, otherwise they’ll sale the amount they deserve from the lack of exposure.

      One way to improve sales other titles is to use their well-known titles and adding a demo of those games to help advertise and gain more exposure for them. Similar to how Capcom has added a RE6 demo onto Dragon Dogma, or how Level-5′s Guild 01 has the Time Travellers. 

    • http://www.facebook.com/people/Al-Sait/100002903060013 Al Sait

      When it first came out i had read a review of it in Game Informer then i saw a review of it on G4..so that pretty much made up Sega’s advertisement for me lol…i went out and got it right after X play went off!

      • Luna Kazemaru

        Ah yes I remember when G4 wasn’t BS.

  • http://ggftw.com/forum/ Monkey_T

    Oh Sega, what has happened to you?
    It’s very depressing to see one of your favorite companies reduced from a video game giant at Nintendo’s level to this.

  • http://www.youtube.com/B4ULoveShine Tim_at_where

    @SEGA I hope you’d spend more on marketing, especially when you declared this shift to digital games.

    @Steam_powered STEAM, Virtual Console, PSN, XBLA are goldmines you’ve been sitting on for years, especially when you have a backlog of Japan-onlies, while simultaneously and concurrently committing financial suicide by expecting COD-profit levels on your packaged games.

  • http://twitter.com/IcelandicHossi Hossi Blumengaarten

    NO WAY MAN, I remember when I got my Genesis(mega drive) and SEGA was the best thing

    then they had all the add ons that just JACKED MY MONEY so I bought a PS1 instead of the Saturn

    Sega would have died after the Dreamcast failed if it was not for the founder giving them like 600 millions

    sooner or later SEGA will die or end up like ATARI

  • http://www.facebook.com/profile.php?id=100003583595295 Shaun Huseman

    The reason why Sega’s games havent been selling that well is because the games they have put out are largely mediocre.

    All the past Yakuza games were great, but Dead Souls was panned as being shallow and not like the other games in the series.

    Their party games with Mario in them sell decent and cant cost much to make, but their core Sonic games usually dont get great reviews due to mediocrity.

    Just release Valkyria Chronicles 3 as a download outside of Japan as a subtitled release and Ill buy it. Dubbed or not.

    • http://wiredjungle.wordpress.com/ DrakosAmatras

      Other users have already addressed above regarding Sega’s release library: They do make good games, even if they’re not exactly good at making them known. And if we’re gonna assess a company’s record, counting only the titles released in English would be missing the full perspective.

    • boundries_san

      I don’t think Shining series is a mediocore game here. It is just poorly marketised which caused the game to sell lower.

      U can easily see that from the chart each week. Compared to Nintendo titles, Sega’s titles will sell a lot on the first week however decreased in a large percentage for the next 2-3 weeks. Which is the exact opposite for Nintendo as they sell in steady amount for each week.

  • HeatPhoenix

    Maybe if they did company-esque stuff like, y’know, ads. That would probably help.

    The only SEGA game I’ve seen advertised here was Sonic Generations. And I don’t think 1.85 is that bad at all. If they keep going like this they’ll make a comeback with Sonic. They really shouldn’t see this as a failure, just the start of a grand success.

  • thebanditking

    This news saddens my Panzer Dragoon loving heart. Oh Sega I miss your consoles….

  • http://twitter.com/ChestnutBowl Chestnut Bowl

    So it begins.

  • Patrick Lawson

    SEGASammy is restructing and reforming into a new multi-media,multindustrial conglomorate called “SEGA Orbi Enterprises,International”.

    Among the new divisions that will be included is a 1st party home game consumer division, in other words VIDEO GAME HARDWARE/GAME CONSOLES!

    http://tdr.uspto.gov/jsp/DocumentViewPage.jsp?85517210/OOA20120327142047/Offc%20Action%20Outgoing/2/27-Mar-2012/sn/false#p=1 

    http://www.trademarkia.com/orbi-85517210.html 

    SEGA is ready to return to hardware manufacturing. They could care less if their packaged consumer division overseas is losing money. Its investors are looking for an excuse to abandon development of 3rd party software, going entirely digital,PC,mobile and social networking is an ingenious idea that will save them a ton of budget in R&D to reserve for future 1st party projects.

  • http://myanimelist.net/profile/Kuronoa Kuronoa

    Remember last gen when there was many sequels that we cared about but didn’t seem to sell all that great?  Yeah that has to stop.

    I’m planning on getting Rhythm Thief when it comes out.  I actually want to see SEGA make creative games and feel confident to release them for retail.  I’m sure it may flop like everything else that is creative these days but at least I voted with my wallet.

  • Zonron

     i don’t know if i’m happy or sad right now.
    im sad tha there sales dipped so much, but im happy to hear more digital releases. it makes me hopeful on seeing more sonic games for psn and such. I love you sega, keep up the good fight!

    if worse comes to worse i know a little blue fella that can led you some gems to get back up there!

  • パンダ

    quite disappointed that Sega won’t likely be localizing j-rpg ever again… and how the f does sonic keep selling, its the same thing over and over

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