SEGA's John Clark
The UK MD on price cuts, portfolios and the battle for Christmas cash
Although he's been at SEGA for three years, John Clark only became managing director of the company's UK arm a few months ago. He was promoted as part of a reshuffle which saw Mike Hayes becoming of SEGA West, overseeing operations in both the US and Europe. But it was Clark who took to the stage at last month's Fast Forward retailers' conference to present SEGA's Christmas line-up.
Afterwards, GamesIndustry.biz sat down with the UK boss to find out his predictions for this festive season, his reaction to the recent hardware price cuts and how SEGA plans to move forward in 2010.
Q: How has the recent executive reshuffle changed the way SEGA operates in practical terms?
John Clark: SEGA is putting a lot more investment, trust, authority and freedom into our offices outside of Japan, and so far it's paying off. The whole SEGA Sammy corporation looks on the work the entertainment section does very fondly and we've shown really good growth. Certainly over the last five years, SEGA Europe has been a strong, growing and very profitable part of the business.
Q: You sometimes hear staff working for Japanese firms complain their parent company can be very controlling. Is that something you've encountered at SEGA?
John Clark: Prior to working for SEGA I spent eight years at Eidos. The headquarters were in Wimbledon, and that was the worldwide head office. Therefore every decision was made just down the corridor from where I was sitting. You get used to that, and you don't realise just how much freedom you have and how close to the business you are until you're away from it. A lowly sales person, as I was then, could have direct input into the direction of the business, and that was always quite exciting.
So I was interested to see how I would adjust. But I have to say, the autonomy that SEGA Europe has and the entrepreneurial spirit is phenomenal. Based on my knowledge of places like Activision and Ubisoft, I would say SEGA is still more entrepreneurial than any other publisher based out of the UK. It feels a lot like Eidos in terms of the influence individuals and senior execs can have on the direction of the business, from signing deals with developers to discussing direction and profitability.
It really is divested into the European and SEGA West offices, so it almost feels as though it's a European business. Japan is very hands-off. Every business has certain procedures you have to go through, and there are definitely some Japanese-style influences, but they don't dominate the business.
Since I became UK MD we're looking at how we all operate, and all of our opinions within the entire team count. It's about taking the best energies and efforts and putting them in the right direction. We've got a lot of freedom and support when it comes to making the right changes.
Q: SEGA's current line-up seems to feature quite a broad range of software. There are family titles in there but also games like Resonance of Fate, a Japanese RPG which is very hardcore. Isn't there a danger that with that kind of breadth, you spread yourself too thin?
John Clark: Yes, but the sort of titles we release come from three different areas - Japan, Europe and the US - and they're three different, viable markets. The titles which come out of Japan and work well globally tend to be Sonic, Super Monkey Ball, those core arcade-style SEGA licences. Then there are the RPG elements which are focused for Japan, do fairly well in the US and less so in Europe.
Then we have the European driven titles - Total War, Football Manager - which give us strength here. And we have forged alliances with companies like Marvel Studios which give us great success in the US.
That's the key for us. SEGA has spent a lot of time sourcing, hiring and creating partnerships with many different developers. Now we're really defining what those different segments mean.
Q: What about games like MadWorld? That was a very stylish, innovative cult title, praised by critics and core gamers - but at the end of the day, did it sell enough copies?
John Clark: I go back to what I said about the entrepreneurial spirit of SEGA. We're prepared to have a go and try to be innovative, and we want to crack core gaming. We've spent a lot of time thinking there must be a way to release mature, more adult content on the Wii format.
House of the Dead performed really well. Was that because it was mature or because it was an arcade title? You might lean towards the SEGA IP and the affiliation with Nintendo, but we matured that up by bringing out House of the Dead Overkill, and made it more of a core game.
At the same time we entered into an exciting partnership with Platinum Games, the first result of which was MadWorld - a fantastic, innovative, original game, no doubt about it.
Q: But did it sell well enough?
John Clark: It sold well enough to position SEGA as a company that's prepared to invest in high quality, new IP.
Q: So that's an experiment you would try again?
John Clark: Yes. You can look at quality thresholds and the proven track records of Sonic and Total War and Football Manager, but the industry we're in demands creativity and innovation. There has to be inspiration from the development level as well as the publishing level. There has to be balance.
Q: The first Mario and Sonic at the Olympics title was a huge hit. Are you expecting the same success with the sequel?
John Clark: Particularly in the UK, we're really proud of what we achieved with Mario and Sonic. Out of all the European territories, and even the US, we've got by far the best attach rate. If you look at the Chart-Track report, in the last nine years the only games that have outsold Mario and Sonic are Brain Training, GTA San Andreas, Wii Play, Wii Fit and FIFA 2009. And at last count, FIFA had only outsold Mario and Sonic by 2000 units.
Q: How confident are you of achieving that?
John Clark: How long is a piece of string? We think the other titles vying for that spot are FIFA and Modern Warfare 2. We know Mario and Sonic is going to be in the top three.
The original Mario & Sonic - for Wii only - achieved an attach rate of something like 30 per cent to hardware. If we've got our hardware forecasts correct, and of course that could be influenced by the price drops on the other formats, we could be Christmas number one if we achieved a 15 per cent attach rate. So we've got a really strong chance.
Q: Some publishers have complained that Nintendo dominates the Wii software market with first-party titles. Has that been a problem for SEGA?
John Clark: You work with every single hardware publisher in completely different ways. Historically, you always see Nintendo titles doing exceptionally well on Nintendo formats. With the Wii, we saw a massive opportunity to release titles because everything was selling so quickly and going out of stock. There were quick development timelines and opportune moments to get lots of software sales, we we announced a plethora of releases.
Nintendo just carried on doing what they do, which is releasing good quality games. But they've released different games, more lifestyle titles, and other publishers are looking to take a share of that market. I think the emphasis has to be on publishers to think about the games they bring out.
Q: What are your predictions for hardware and software sales this Christmas?
John Clark: I think last year was the peak for hardware, and software always seems to follow just behind. This year hardware will still be strong, but not as strong as last year, in my opinion. Software will be bigger.
The attach rate will be stronger and this will be the year software peaks - anything between 2 and 10 per cent bigger in value than last year. This Christmas is software's peak, and therefore revenues overall at retail are going to be really strong.
John Clark is MD of SEGA UK. Interview by Ellie Gibson.