Sega's fate to be decided within the next few hours

[Silas]

Welcome to the Dojo, Warthog, I must say I'm surprised at the positive welcome you've had so far. Normally, as you probably know, saying that Shenmue III won't appear is fightin' words and will unleash a barrage of flame in your direction.

You have an interesting idea - I must say it never occurred to me that we, the fans, would have even the smallest bone thrown our way. After all, if they released the scenario or the scripts, then some fan could make a 2D game out of it! Or other fans would make a live action movie! I wouldn't mind any of that!

But the sad reality is that Sammy/SEGA will sooner or later pull out a list of games we are never going to see again, and Shenmue will be near the top of the list. And that will be all she wrote.

Sorry I sound down, but the fact is the company I work for has recently had its share of troubles, lost clients etc - and the upshot is that everybody loses morale, nobody sticks around - they leave to work for the biggest rivals, and it's very hard to keep the spark of creativity going under such circumstances. So unless the whole exercise was because the CEO of Sammy was a huge Shenmue fan and bought SEGA to order that they make Shenmue III, I myself am not very optimistic.

[Garbaman]

I won't be using the words optimistic and Shenmue 3 in same sentence anytime soon.

[b_ren]

If Shenmue 3 doesn't get confirmed I won't becoming here ever again, unless it's to post something stupid. The only reason I come here and play Shenmue is because there was always a little chance of Shenmue 3 comming out. From this point I may never play Shenmue again.


Jizz, jizz, jizz....

[reporter]

Update

Sega reacts to Sammy invasion - Statements inside
Cautious Sega accepts fate.
17th Feb 2004

Related Links Companies SEGA
Sammy

People Hajime Satomi
Hideki Sato


Link to This Article http://spong.com/x?art=6202



Sammy's forthcoming Darkwatch game.Sega has released a reactionary statement to today’s bombshell news that sees pachinko giant Sammy’s CEO, Hajime Satomi replace Hideki Sato as Sega chairman, with the latter man embarrassingly demoted.

Sega released the following restructure clarification:

Sega Corporation announced today that at the board meeting, it appointed the representative director and to establish the new business execution structures to be effective from February 17, 2004.

1. Appointment of the Representative Director (To be effective February 17, 2004).

Chairman and Representative Director: Hajime Satomi.

2. New Business Execution Structure (To be effective February 17, 2004).

Chairman and Representative Director: Hajime Satomi (newly appointed).

President and Representative Director: Hisao Oguchi
Vice Chairman and Director: Hideki Sato
Directors: Tetsu Kayama, Akira Nagai, Hisashi Suzuki, Yoshiharu Suzuki (newly appointed)

Statutory Auditors: Kazutada Ieda, Iwao Nishi

Auditors: Kinzuke Miyazaki, Yoshiyasu Gemma

Two Directors of the Company, Masahiro Aozono and Makoto Kaneshiro, resigned their position as of February 16, 2004.

This was followed up by two statements on the above. The first deals with the appointment of Satomi and reads:

"Mr Satomi is well-experienced in management, and Mr Suzuki has proven front-line performance in the amusement business. Having them aboard in Sega board members, Sega expects to expand its corporate value and maximize the interests of shareholders. Sega will proactively explore opportunities of alliances with Sammy. Maintaining the on-going alliance relationship, Sega will work with Sammy as necessary while examining both companies' interests."

A second statement explains that everything is indeed fine: "Sega Corp. announced today that at the board meeting, it appointed the representative directors and to establish the new business execution structures to be effective from February 17, 2004. In the new business execution structures, Sega will work to strengthen the profitability and marketability to become the global independent content publisher in the entertainment industry."

Stay tuned for dedicated updates on this breaking story right here, as it happens.

http://www.spong.com/detail/news.asp?prid=6202

[reporter]

Here is Adam Doree's take on the matter -

Sammy and Sega: The Nightmare Begins

Disheartening news today as the inevitable happens in Tokyo: Sammy takes effective control over Sega Corporation. Full details.

Sega fans will be worried today as ultimate control of the corporation lands comfortably in the hands of Sammy's President, Hajime Satome. It is a rather dreadful situation for Sega and its fans, viewed by insiders as a hostile takeover, but for the time being there is still good news for fans - more on this in a moment.



The Scene: Shinagawa Prince Hotel, Executive Tower
The fifth floor of Tokyo's Shinagawa Prince Hotel was the setting at the shareholders' meeting today, which saw the swift and immediately effective appointment of Sammy's Hajime Satome as Chairman and Representative Director on the board at Sega. Former Hitmaker president Hisao Oguchi remains President and Representative Director at Sega, but Satome is the one with ultimate control over the way Sega Corporation operates as of today.



Trouble: Sega Corporation
In addition, Sega's board has been bolstered with another Sammy foot soldier, Yoshiharu Suzuki - while two existing Sega directors, Masahiro Aozono and Makoto Kaneshiro, resigned their position yesterday.

The unnerving events follow Sammy's purchase of a gigantic 22.4% stake in Sega Corporation late last year, directly from CSK Corporation, which had wanted to chuck its blue stock for some time.

Sources point towards a Sammy strategy that sees rapid expansion in the Japanese and international arcade marketplace, including Pachinko machines and the Atomiswave, an arcade platform built from 'leftover' Dreamcast components. It is thought that Sammy's interest in Sega stems entirely from the massive arcade floor space across the world, into which Atomiswave products can be rolled out and operate on a highly profitable basis.



Threatened: Current Sega President, Hisao Oguchi
How much thought will be spared for Sega's world-class development talent, massively loyal fanbase, recent upswing in financials and wealth of valuable intellectual property, remains to be seen, but Sammy will clearly be using selecting the parts it wants to further its strategy in some way.

Satome's aggressive approach towards an alliance with Sega was underlined last year when he commented, "If our vision does not agree with that of Sega then we might have to consider taking more shares." But it was also revealed last Friday that Sammy plans to release bonds to the tune of $380 million to pay off debts arising from the purchase of Sega stock - which casts further doubt over the entire situation.



Studios like Yu Suzuki's Digital Rex are still making the games fans want, but for how long?
The good news is that, for the time being, Sega still has a solid line-up of products that will continue to be released for at least the next couple of years. The industry is expecting a strong line-up from the company at E3 2004, while big titles like Virtua Fighter 5 are already in production. In Europe, big deals such as Sports Interactive are still going ahead, but where will they end up?

We will keep you fully updated on the situation with Sega and Sammy, which is more than can be said for either of the two corporations in question - the former's pants rapidly filling up, and the latter thinking it is too clever to have to tell anyone what it's doing in an honest fashion.

Adam Doree
Editorial Director, Kikizo

http://games.kikizo.com/news/200402/014.asp

[b_ren]

Here is Adam Doree's take on the matter -

Studios like Yu Suzuki's Digital Rex are still making the games fans want, but for how long?
The good news is that, for the time being, Sega still has a solid line-up of products that will continue to be released for at least the next couple of years. The industry is expecting a strong line-up from the company at E3 2004, while big titles like Virtua Fighter 5 are already in production. In Europe, big deals such as Sports Interactive are still going ahead, but where will they end up?

We will keep you fully updated on the situation with Sega and Sammy, which is more than can be said for either of the two corporations in question - the former's pants rapidly filling up, and the latter thinking it is too clever to have to tell anyone what it's doing in an honest fashion.

Adam Doree
Editorial Director, Kikizo

http://games.kikizo.com/news/200402/014.asp

This is amazing news.

[reporter]

Goldman Sachs upgrades SEGA to outperform today on this news...

Sega (7964.T, ¥1,060, OP, N) - Market Cap: ¥185.4 bn

Sega: Expectations of drastic reform from new chairman Hajime Satomi, upgrading to OP from IL


* Growing expectations of profit recovery: Around 1:00 pm on February 17, Sega formally announced
the appointment of Hajime Satomi (current president of Sammy) as its chairman. While the inclusion of
Mr. Satomi in Sega?s top management team is not really a surprise, the taking of this decision at an
extraordinary shareholders? meeting indicates a commitment to reform, and there are growing
expectations of an early start to the process of such reform. Sega?s heavy burden of fixed costs presents
ample room for cuts, especially in R&D, where Sega?s annual investment of about ¥20 bn is well above
the industry average and indicates room for cuts of ¥1.5 bn-¥5.0 bn. We believe this could boost operating
profits by 20% or more. If expectations of earnings recovery, centered on consumer software (CS)
business, are discounted by the market, this could result in significant recovery in share-price momentum.
We believe the share price is close to bottom, following the pricing in of delayed entry into the black of
CS business, and that downside is limited. Over the past year the share price has shown volatility in excess
of the industry average of about 15%, and we believe the stock looks an attractive investment proposition,
depending on the speed of momentum recovery. We are upgrading our rating on the shares to Outperform
(OP) from In-Line (IL). Our coverage view remains Neutral.

* We expect cuts in fixed costs: We estimate Sega?s FY2004 R&D expense budget at ¥20 bn, and we
believe the majority is likely to be accounted for by CS business fixed costs. While such investment would
correspond to shipments of 13-14 mn copies at other software makers, Sega?s CS business ships only
about 10 mn copies annually, indicating excessive development investment. There are expectations that
the outside perspective of the new chairman should enable drastic restructuring of development, including
headcount cuts, resulting in swift reform of the CS business profit structure. Even if restructuring is
delayed somewhat, the path toward profitability in the CS business is becoming clearer, and we maintain
our scenario regarding the bottoming of overall earnings.

* Attractive investment prospect: We see few short-term negatives and we believe the share price is close
to bottom (see our February 6 GamesFlash). Moreover, assuming the pricing in of expectations of profit
growth based on progress in structural reform, given high volatility associated with the stock we see Sega
as an attractive investment prospect. Near-term catalysts should include comments by the new chairman at
the announcement of Sega?s new medium-term business plan, which is likely to take place in March.
Risks include temporary slowdown in momentum due to the sudden departure of development staff.

With the new chairman set to take the management helm, we believe vice-chairman Hideki Sato (former
chairman) may take on an industry mediation role, leaving president Hisao Oguchi free to focus on tasks such
as directing development.

[Xellos]

Silas, are we still lovers?

[sex machiene]

well its good doree said they will be making games for at least a couple more years. i don't think shenmue will be released anything after 2006 at the latest so this is a little uplifting. and sammy can't take sega out of the console business permanently. look at sega hits such as the most popular, sonic. sonic will always be with sega on a console

[warthog]

Silas: Yea, i should perhaps have put on the flame suit just to be sure Thanks for the welcome also!
I guess i got off easy since i have a few valid points at least. Like you I don't either have any high hopes. But what i would like to know is, let's say they announce that there will be no shenmue III game, would they still be holding on to the script, that's the question.. I mean if it were up to Suzuki himself at that point then he'd probably at least put out the script to get some kind of closure on the whole saga. My worst case scenario would be that he wouldn't be allowed to do even that and that it would just be collecting dust in some archive never to be seen again

[Sailorstick]

Man...this is absolutely horrible for SEGA...let's hope microsoft decides to buy out sega.

You know, that would probably be the best thing that could happen to Sega right now. Microsoft gives a lot of freedom to it's game developers and Sega/MS already have a good relationship.
As long as they wouldn't call the company Sega-Microsoft then I'd be very happy. Maybe we should petition MS?

[CharmedGamer]

Silas: Yea, i should perhaps have put on the flame suit just to be sure Thanks for the welcome also!
I guess i got off easy since i have a few valid points at least. Like you I don't either have any high hopes. But what i would like to know is, let's say they announce that there will be no shenmue III game, would they still be holding on to the script, that's the question.. I mean if it were up to Suzuki himself at that point then he'd probably at least put out the script to get some kind of closure on the whole saga. My worst case scenario would be that he wouldn't be allowed to do even that and that it would just be collecting dust in some archive never to be seen again

I agree but, The redesigning of the site and the new post here and there(Valentine's Day) make me think something is going to be announced at E3. If not That's pretty sadistic of them. I think money was the biggest problem but you never know what may have happened behind closed doors. We'll just have to wait until May.

[PILMAN]

Even if the 3rd isn't made I'll still come here, it's nice to have a game despite the fact we don't really have solid news yet about whats happening and to be able to talk about the game. There are plenty of older games from my day that people discover and seem to enjoy then when they visit a forum for that game it's dead because it's not popular anymore.

[drporkchop]

Man...this is absolutely horrible for SEGA...let's hope microsoft decides to buy out sega.

You know, that would probably be the best thing that could happen to Sega right now. Microsoft gives a lot of freedom to it's game developers and Sega/MS already have a good relationship.
As long as they wouldn't call the company Sega-Microsoft then I'd be very happy. Maybe we should petition MS?

I hate to say it, but agree. As much as I detest microsoft, it probably would be best for the future of Shenmue and Sega in general.

[white lotus]

There goes Shenmue III down the drain....Cant wait until Sega.com refirects me to Sammystudios.com! Bye Sega, See ya in Heaven..