Sega could spend $1bn on its super game including studio acquisitions

Sega has said it will consider investing nearly $1 billion in its game development capabilities in the next few years, including the potential acquisition of other game companies.

The Japanese publisher has committed to a new ‘super game’ initiative this year, a mid to long-term strategy aimed at creating a “major global title” focusing on the pillars of “global”, “online”, “community” and “IP utilization”.

In the company’s annual report published this week, parent company SegaSammy said it would consider investing up to ¥100.0 billion ($882 million) over the next five years to achieve its ‘super game’ ambitions.

This investment could be spent on not only its internal development resources and in-development games, but also on the acquisition of other companies either in Japan or abroad.

Sega has one of the largest studio networks of any Japanese company. Since the acquisiton of UK-based Creative Assembly (known for Total War) in 2005, it’s gone on to acquire Sports Interactive (Football Manager), Relic (Age of Empires IV), Atlus (Persona), Amplitude (Humankind) and Two Point (Two Point Hospital).

In SegaSammy’s annual report, it suggested that any future acquisitions would be considered based on how they can compliment its existing developers.

“The way people interact with games is becoming more diverse and the ecosystem is growing exponentially,” it said. “In this context, SEGA wants to go beyond the boundaries of conventional games and take on the challenge of creating super games that excite the gaming community, which is a web of diverse relationships.”

It added: “Naturally, we project that the scale of investment in the development of such super games will be sizable. We will need to incorporate new technologies and trends. To this end, we will have to invest from the perspective of developing the pipeline and shoring up our value chains.”

President and COO Yukio Sugino went on to use Persona developer Atlus as an example of an acquisition that helped Sega grow its business by utilising the company’s expertise at localising games for a global audience.

“I think back to when we acquired and consolidated Atlus,” he said. “This brought us two major benefits. One was the highly appealing, world-class IPs Atlus had developed in the role-playing game genre. The other was the solid localization capabilities of the U.S.-based site.

“Drawing on these localization capabilities, very Japanese IPs like Yakuza and Hatsune Miku have been translated using expressions that really resonate with local users, which has enhanced game quality.

“The outcome of this is clearly evident in the rising Metacritic scores, which in turn is leading to growing sales in overseas markets. These kinds of acquisitions that enhance our functionality will definitely be a major strength in the long run, and we will continue to proactively explore investments from this point of view.”

Finally, Sugino said that Sega intended to increase the number of collaborations with other companies. The comments come on the same week Sega announced “a strategic alliance” with Microsoft, which will see it develop games using the Xbox firm’s Azure cloud platform.

“I also have the sense that our collaboration with other companies has been lacking,” he said. “Now, in part to better respond to rapid changes in the market, we are increasing opportunities to be in communication with our various business partners.

“More robust collaboration has enabled us to enhance game quality and gain footholds in the development of new services and games. Of course, collaboration brings challenges. But backed by our strong brand recognition and a rich lineup of IPs, SEGA stands firmly in position of strength.”

While Sega prepares this ‘Super Game’, it will also release a number of new projects over the course of the next five years, including a new FPS title at a European studio (likely Creative Assembly) and the ‘utilisation of IP assets’ in remakes, reboots and remasters.

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