Posted: 01/05/2000    Previous | Headlines | Next

GameSpot News

Japanese investment firm Nikko Solomon Smith Barney has released a report detailing the present and future of Sega. In the report, the firm mentions ways in which Sega hopes to become more profitable in the future - including possible game development for other platforms.

The report begins with an overview of Sega's future by reaffirming the company's strong interest in becoming a network force. However, it also very interestingly goes on to speak of future alliances. "First, Sega has clearly indicated its intent to transform its business model to one centered around network business. Second, the Dreamcast platform is not an end in itself, but rather a transitional measure designed to attract network users; Sega has indicated alliances with competitors over the longer term to gain more network subscribers." Interpret that as you will.

Also strongly stated in the report is the Dreamcast's success in the North American and European markets. Currently 1.85 million units have been shipped in North America and 800,000 in Europe. However, the report mentions that these figures are a little short of the firm's expectations - bottlenecks in production have held up the production of systems, and, according to Nikko Solomon Smith Barney, more should have been ready for the holiday season. The firm goes on to say that Sega can only produce 350,000 consoles per month, but, thanks to a second chip supplier, it should be able to bring that number to one million per month by April. Also, Sega currently loses approximately 2,000 yen (US$20) on each Dreamcast console sold, but it expects to release a lower-cost version of the Dreamcast in June to at least break even.

As for network plans, Nikko Solomon Smith Barney states that almost all software being developed by Sega in Japan is for network use. Games being developed in the US, such as NFL 2001, will make use of the network. Sega development group Nextech is currently developing online games that will support up to 2,000 simultaneous players.

The firm also mentions that Sega plans to make its network accessible to other terminals besides the Dreamcast. Whether this means PC or future consoles such as the Microsoft X-Box remains to be seen.

The last interesting revelation contained in the Nikko Solomon Smith Barney report is the mention of Sega spinning off future development divisions. While GameSpot News has previously reported that over the course of the next few months Sega will begin setting up several spin-off companies, the firm mentions that Sega intends for the groups to adhere to an open platform principle - meaning that these development divisions will be able to produce software for whichever platform they deem will offer the most profitable rewards. The firm goes as far as to mention the PlayStation2 and the PC platform as possibilities.