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Sega embraces "grassroots" games-as-a-service

John Clark details organic approach led by studios, focused on communities, and applied to everything from recurring revenue to PC ports

Sega is no stranger to the idea behind games-as-a-service. As Sega Europe SVP of commercial publishing John Clark pointed out to GamesIndustry.biz at E3 last month, the name "Sega" was conceived as a sort of portmanteau of "Service Games."

Be that as it may, Sega's approach to games-as-a-service can be hard to pin down. Some games offer little or nothing in the way of downloadable content (Warhammer 40,000: Dawn of War III, Football Manager 2017), while others have enough DLC to double the cost of the game or more (Total War: Warhammer, Football Manager 2017 Touch).

"Absolutely we're embracing [games-as-a-service] in terms of the mindset, in terms of our own approach to it and our definition of it," Clark said. "But we're not putting a banner up there saying, 'This is games-as-a-service. This is what it means. This is our road to games-as-a-service as an organization; let's head there.' We're still thinking organically from the grassroots in terms of how we nurture these relationships and expand upon them."

"We want to develop that expertise, but we also want to learn from other areas of the business that maybe we're not at the core of, and we're not ready to put ourselves at the core of right now."

Sometimes that organic, grassroots path to games-as-a-service seems to be a bit circuitous. In 2011, Sega bought into the Western free-to-play PC scene by acquiring Puzzle Pirates studio Three Rings, but it shut the company down last year, citing concerns about a hyper-competitive mobile market. Be that as it may, Sega has continued to produce free-to-play mobile games like Crazy Taxi Gazillionaire and Total War Battles: Kingdom, but felt the need to team up with World of Tanks outfit Wargaming for the upcoming PC free-to-play title Total War: Arena.

"We're building that expertise and understanding how we can work with technology to build that two-way content-and-creator relationship," Clark said in regards to the Wargaming partnership. "As a publisher, we put ourselves behind. We want the studio to take the forefront and the community to be involved in that. We want to develop that expertise, but we also want to learn from other areas of the business that maybe we're not at the core of, and we're not ready to put ourselves at the core of right now. How do we learn from experts in that business?"

If there is a consistent through-line for Sega's various games-as-a-service efforts, it's a focus on community and relationships with players, an idea Clark returns to repeatedly, and one he characterizes as a shift for the company along the lines of when it axed the Dreamcast and started making multiplatform games.

"When we see where we were--and many years ago we were a particular platform business that moved to a multiplatform business that was console-driven--we now see ourselves as an IP business and a franchise business that is aimed at aligning the franchise we have with community, and understanding the value of that relationship," Clark said. "The way we operate across platforms, whether it's delivering content digitally or physically on PlayStation or Xbox or Switch or PC, or whether it's communicating and building those relationships, we just see ourselves as connecting the IP and building that depth of relationship with the audience and community."

That focus extends beyond the company's games-as-a-service efforts. It's also driving a few of the company's projects with essentially no recurring revenue opportunities, such as the recent PC ports of Bayonetta and Vanquish. But as Clark pointed out, porting old console games to the PC isn't an automatic win, and even though the company has been doing it for years, there's still a learning curve involved.

"It's been incredible," Clark said of the PC port business. "It hasn't happened overnight. We know that Steam has grown, and as Steam grows, discovery gets more challenging. And we know that as discovery gets more challenging and Steam grows, the average number of copies sold of a Steam game goes down. It's not a license to get your game in the hands of millions of people, but it's an incredible marketplace. For us, we're passionate about Sega games and to make them available for the Steam audience, but it has to be right. Over the years, we've brought out many conversions, and we learn lessons. We learn what's really important to that community."

"Bayonetta's a great game and we know people are going to love it, but they're not going to love it if we don't care for that specific community."

That learning process has been ongoing since 2013's The Typing of the Dead: Overkill, Clark said. Sega took lessons from that, and more from Valkyria Chronicles the following year. Clark gave a list of things the company needed to better understand: variable frame rates, Steam Workshop functionality, graphics card functionality, mouse-and-keyboard controls... things that console players generally don't think about, but can be essentially important to the PC crowd.

"Bayonetta's a great game and we know people are going to love it, but they're not going to love it if we don't care for that specific community," Clark said. "So it's really important that control mapping is specifically included."

The learning on this front is ongoing. While Sega earned praise for how the Bayonetta PC port was handled, the Vanquish port introduced some unusual bugs. For example, the amount of damage to players increased with the game's frame rate, so anyone looking to take advantage of a good PC's ability to run Vanquish at 60 frames per second was also making the game significantly harder to play. (The bug was fixed within days of discovery.)

Clark said that finding the right projects to be ported to the right audience with the right features and standards is just one responsibility of Sega Searchlight, an internal team at the company devoted to identifying new opportunities. Another big part of that team's remit is identifying start-ups and studios for acquisitions and partnerships. It's been a busy few years for Sega on that front. Since 2013, it has acquired Atlus, Relic, Amplitude, and Crytek Black Sea, and in May announced a publishing partnership with upstart Two Point Studios. Clark suggests there will be more to come on both fronts.

"That's still very much on the radar, to expand our portfolio by working with some of the world's best talent," Clark said. "We are acquisitive, we are looking that way."

But just as with Sega's approach to games-as-a-service or PC ports, what it does now is not necessarily an indication of what it will do in the future because in a constantly changing industry, there are always new things to learn.

"All of the organizations that operate in the games industry, whether you're a developer or a service organization or publisher, we're constantly learning new things--new things about technology, tools to build relationships, content to deliver, business models," Clark said. "We're constantly learning new things about the user base. Whether it's a journey or a destination, who knows? We're following the creative vision of the studios and thinking about delivering against the community. We're looking at what other people are doing in that as well, but we're just enjoying building these content experiences and communities and businesses, and we'll take it from there."

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