Sega's Mike Hayes

It's interesting, the Anglo Saxon territories, I know it's a terrible expression, but by that I mean the UK, Australia, Nordic, they are powering ahead with core games, and we've just seen it again with L.A. Noire and the fact that Microsoft is so strong in those territories, which has got this great core games symbiosis, and they are doing very, very well. However the bit that's below that, which is the more family orientated, has done less well. But then you flip into countries like France and Spain and Italy and they're actually doing very well in that middle market on PlayStation 3, and actually they're sort of balancing... there's a little bit more balancing that's going on.

What Microsoft did with Kinect, is very clever. They've expanded the use of that box. That to me is great innovation.

Having said all of that, there's no doubt that the markets are clearly down again. We're in quite a long period of the life cycle and its probably not unreasonable, particularly with Wii falling like it has done, that that market is going to dip. The question is will it get back up to the heady heights of two or three years ago with new platforms? That's an interesting question. My guess is probably not, only in so far as gamers are gaming elsewhere.

The total amount of time and money spent on gaming is growing consistently but the amounts spent on what we call traditional platforms is decreasing because people are spending more time on other formats. So overall, because I said that thing about how I was "staggered" how the UK had dropped, but there were two things about that. One is what I did say was actually, gaming overall is on the increase, but it's in different areas, and second I was just actually referring to Sega because we started out as effectively a UK company selling Football Manager and Sonic, and now we're across Europe and the UK share of our business has just shrunk. So it's kind of mixed. For us, definitely... Oh, and I missed out Germany as well! Germany is doing very well for us on things like Sonic, it's quite strong. And interestingly on Virtua Tennis, which did as well in the UK as we had expected, it's actually motoring ahead in Germany. So it's quite a mosaic, it really is a patchwork of different stories. If you've got a core game you can still blast, absolutely, and it sells big, big numbers.

I never speculate on first party. That's their business.

You're sort of defining what does that mean any more? I mean it's interesting isn't it? Again, probably wrong to speculate but does it need to keep getting bigger and bigger? It should probably be getting deeper and broader. You know, because the way people are consuming games.

But you see that's what I think Microsoft did, and to an extent Sony, with Kinect, is very, very clever. As developers we can make great Kinect games that cost relatively less, but what they've done is expanded the use of that box quite cleverly with that. I think that's what I'm saying by being sort of... That to me is great innovation. Rather than what we're used to, the next huge step change, for bigger better bolder games that's going to cost us ten million dollars more to make. I'm not entirely sure that's where it's headed but as I said, we don't know. We're just happy to see the first party make changes.

I think it's important actually. I think the UK development industry has had a bit of a knock recently, to say the least, and then there's all the scuttlebutt about if we don't get tax breaks then we're all off, but well, actually the reason we are there is the talent, it's got good talent. So there's nothing magical, there's a lot of good people in that area, we want to make a good game, so we just get on with it. Also Miles [Jacobson] is expanding Sports Interactive, we made less of a thing there, but we're doing some really interesting projects, again that we'll talk about them later, but there's quite a lot of expansion going on with Miles' team as well.