Sega Corp recently treated reporters to a 1998 in-house film never shown outside the company -- a Japanese "yakuza" gangster movie depicting a turf war in which the gang bosses are all played by Sega executives. The warring gangs are named Sega and PureSute -- the Japanese abbreviation of PlayStation, the hit video game machine from Sony Corp.
In real life, Sega lost that fight.
Earlier this year, Sega was forced to abandon its Dreamcast console, whose sales never caught up with rival PlayStation2. Getting rid of inventory at slashed prices, Dreamcast sales only recently reached 10 million. But PlayStation2, which went on sale last year, has already doubled that number in shipments worldwide.
PHOTO: AP
The failure of Dreamcast has made Sega rethink its role in the video game market. It's no longer focusing on hardware, but on making games for other machines -- not only PlayStation2 but also Nintendo Co's new GameCube and portable Game Boy Advance and Microsoft Corp's soon to be released Xbox.
"We are being reborn as an entertainment company," said Tetsu Kayama, Sega's chief operating officer.
So far, the shift from machines to games seems to be helping Sega's finances. The company said Oct. 24 it expects a first-half pretax profit of US$36.7 million, a turnaround from its original forecast of a US$19.6 million loss. Revenue should reach US$790.4 million, up from an original forecast of US$668.1 million, Sega said.
Sega and other Japanese game designers will be critical factors in the three-way video game machine war that is sure to intensify over Christmas.
While there were concerns after the Sept. 11 terrorist attacks in the US that demand for video games would slacken, now it appears that any negative impact would be minimal because families are expected to spend more time and money on activities at home.
GameCube goes on sale for US$199.95 in the US on Nov. 18, three days after Xbox. Xbox, the only machine among the three with built-in hard disk and broadband access, costs US$299, the same as PlayStation2.
"It's going to be difficult to overcome PlayStation2's head-start," said Jay Defibaugh, analyst with Credit Suisse First Boston in Tokyo. "The balance of power will be decided by the availability of software."
That is why wooing game software-makers is extremely critical for the machine makers. Even more critical is clinching exclusive games -- and Sega isn't about to stake its future on any one machine.
It is making 13 games for Xbox, including versions of the Internet-linking Phantasy Star Online and Shenmue, whose Dreamcast version has sold more than a million copies.
To market its Sonic games, Sega has chosen Nintendo, a machine believed to be a good draw for younger children. And it's offering some of its strongest titles, such as Virtua Fighter, to PlayStation2.
Because of its lead in the market, PlayStation2 has a huge edge in its game lineup, with nearly 300 games for the Japanese and American markets each. Sony's machine is likely to have the easiest time acquiring games because designers generally want to make titles for the console that has sold the most.
Nintendo's GameCube has just three games out in Japan so far -- two Nintendo originals and Super Monkey Ball by Sega. But Nintendo, which has a powerful lineup of in-house games such as Mario and Zelda, says it plans to sell 1.1 million consoles in the US.
Microsoft, meanwhile, expects to have about 20 Xbox games when the machine goes on sale in the US. But that's just the start; Hirohisa Ohura, managing director of Microsoft's Japan unit, said 150 games are being manufactured for Xbox by 80 Japanese makers.
Sega has also decided to use the Xbox motherboard for its arcade games -- an area Sega dominates. Ohura said Microsoft and Sega are also together developing online games for personal computers in North America, and more online tie-ups are in the works, he said.
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
ACTION PLAN: Taiwan would expand procurement from the US and encourage more companies to invest in the US to deepen bilateral cooperation, Lai said The government would not impose reciprocal tariffs in retaliation against US levies, President William Lai (賴清德) said yesterday, as he announced five strategies to address the issue, including pledging to increase Taiwanese companies’ investments in the US. Lai has in the past few days met with administrative and national security officials, as well as representatives from various industries, to explore countermeasures after US President Donald Trump on Wednesday last week announced a 32 percent duty on Taiwanese imports. In a video released yesterday evening, Lai said that Taiwan would not retaliate against the US with higher tariffs and Taiwanese companies’ commitments to
CHIP EXCEPTION: An official said that an exception for Taiwanese semiconductors would have a limited effect, as most are packaged in third nations before being sold The Executive Yuan yesterday decried US President Donald Trump’s 32 percent tariff on Taiwanese goods announced hours earlier as “unfair,” saying it would lodge a representation with Washington. The Cabinet in a statement described the pledged US tariffs, expected to take effect on Wednesday next week, as “deeply unreasonable” and “highly regrettable.” Cabinet spokeswoman Michelle Lee (李慧芝) said that the government would “lodge a solemn representation” with the US Trade Representative and continue negotiating with Washington to “ensure the interests of our nation and industries.” Trump at a news conference in Washington on Wednesday announced a 10 percent baseline tariff on most goods
‘SPECIAL CHANNEL’: Taipei’s most important tasks are to stabilize industries affected by Trump’s trade tariffs and keep negotiations with Washington open, a source said National Security Council Secretary-General Joseph Wu (吳釗燮) arrived in the US for talks with US President Donald Trump’s administration, a source familiar with the matter said on Friday. Wu was leading a delegation for a meeting known as the “special channel,” the Financial Times reported earlier. It marked Trump’s first use of the channel since returning to the White House on Jan. 20. Citing a source familiar with the matter, the Financial Times reported that Minister of Foreign Affairs Lin Chia-lung (林佳龍) was also a part of the delegation. The visit came days after China concluded war games around Taiwan and amid Trump’s