Sega Sammy shifts more developers to gaming apps

Yuji Nakamura and Takashi Amano
Bloomberg News

A screenshot from “Sonic Boom: Rise of Lyric.” Sega Sammy owns the Sonic the Hedgehog games.

Sega Sammy Holdings Inc.'s game unit has tasked almost a third of its developers with creating mobile titles as more gamers move to smartphones.

The Japanese publisher of the Sonic the Hedgehog and Total War game franchises has increased the portion of its 2,000 developers designing titles especially for mobile devices, Hideki Okamura, president and chief operations officer of game unit Sega Corp., said in an interview yesterday. Okamura didn't say whether Sega intended to develop mobile versions of its popular PC and console titles, such as Virtua Fighter and Phantasy Star. Company spokesman Yasushi Nagumo said no Sonic titles were in the works.

"As the new devices have come out and created a market for smartphone applications, we're putting a lot of resources into that," Okamura said on the sidelines of the annual Tokyo Game Show. "We're shifting developers from other areas."

Sega Sammy, which was formed a decade ago when pachinko- machine maker Sammy Corp. bought video-game company Sega Corp., has seen sales of packaged games decline as players shift from traditional game consoles to smartphones. The Tokyo-based game maker sold 8.7 million traditional video games in the 12 months ended in March, down from 10.8 million in the previous year, the company said in its annual report.

A shift to mobile gaming will help spur a 29 percent increase in video-game and other consumer-product sales to 128.5 billion yen ($1.2 billion) for the fiscal year ending March, the company forecast. It expects operating profit at the consumer business to more than triple to 6.6 billion yen.

The reshuffling of developers has led to at least one hit.

A team formerly tasked with producing amusement park games developed Chain Chronicle, which has been downloaded almost 3 million times and generated 7.5 billion yen since its release, the company said in May. Sega and mobile game developer Gumi Inc. announced plans in July to jointly publish Sega games in Europe, North America and South Asia, beginning with Chain Chronicle this year.

Sega Sammy rose 0.7 percent to 1,779 yen in Tokyo trading yesterday. The stock has declined 34 percent this year, compared with the benchmark Topix index's 1.2 percent gain.

Sales of Sony Corp.'s PS4 and Microsoft Corp.'s Xbox One appeared to be picking up and would probably surpass their predecessors by the second half of next year, Okamura said.

The consoles would probably also catch on in China, where the central government last year lifted a 13-year ban on set-top gaming devices, the Sega president said. The Xbox One, the first console to hit the nation's market, is expected to begin shipping in the coming weeks.

Sega was studying the Chinese market to see what titles would best fit and meet approval of the government. He said games with military, martial arts and cultural themes have proven particularly popular with PC gamers in China, which might provide a guide for game console titles.

"You might find an explosive hit if you play it right," Okamura said. "Once PS4 and Xbox take off, we need to release titles that will fit within the regulatory framework."