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Sega's Mike Hayes Part 1

The Western president assesses Nintendo, Sony and Microsoft's latest technology

We've heard a lot of talk from the format holders about their new technology – home 3D and Move from Sony, Xbox 360 Kinect from Microsoft and Nintendo's 3DS, all of which were front and centre at last week's annual E3 conference.

To get and opinion from a company that is going to be working on all of those new technologies, spoke to Sega West president Mike Hayes, to find out which technology it will be pursuing initially, and how the new formats can help Sega grow its business in the US and Europe. Looking at the high-end gaming market, Sony is putting a lot of money into home 3D for the PlayStation 3 – what are your thoughts on that technology now that it's coming to market as we speak?
Mike Hayes

It's very exciting. I was talking to someone playing MotorStorm who pointed out that you do get nauseous after about 15 minutes with motion sickness, which is a fundamental issue about how much 3D you can consume. However, it's marvellous technology.

The good news as a developer is that to implement 3D it's relatively cheap, and a lot of us can do that relatively painlessly so you'll find that we'll be included at some point, and we'll announce our 3D titles so we'll be there at the party. Having played a couple of games it really is good but you could not sit down for two hours with your glasses on and play an intense shooter. I just think that would be impossible. How that is managed is going to be interesting. I think this stat came from Sony, that it's going to take five years to get a 40 per cent installed base in key territories, so if this were an expensive thing to do I doubt that we would be rushing into it.

Because it's a relatively inexpensive tasks we can do it a lot earlier than we would normally. It's going to be a technology that's going to make major changes. Interestingly of course, people still want to consume a lot of things in 2D. You don't want the news or a romantic comedy in 3D. There are going to be games that are appropriate to 3D and some that aren't but it's definitely an exciting thing. The feedback from those that have experienced it so far is very positive. It's relatively cheap for developers but it's not cheap for consumers, it's very expensive.
Mike Hayes

It's expensive now but it should drop down within a few years. The main reason being for the first time ever all the major manufacturers have approved a common standard. That will drive penetration up and also price down a lot quicker, which is good news. For us it does add an extra dimension – excuse the pun – for gaming, and we're all over that as quickly as we can be. What did you think to Nintendo's 3DS, because that seems the opposite to home 3D. It's in your hands, there's no need for glasses and it's going to be much cheaper. How long has Sega been working with that?
Mike Hayes

I can't answer the first question about time because the NDAs were amazingly strict this time around. The point was made in the Nintendo conference at E3 that when the Wii and DS came in there were a lot of doubting about those two platforms, which Nintendo chastised some publishers on. That thank you to the publishers last week was right because we need to be in there. But the 3DS is Nintendo through and through, this is Nintendo's brilliance. They're almost in their own technological world, doing their own thing. Whilst 3D TV is quite an amazing technology advancement, and many companies will get into that, Nintendo will now create this huge business with their own unique piece of technology that very few if any, will be able to copy. That's Nintendo over and over again, it's fantastic. For us as a third-party it's a great leg up in terms of the portable business.

The other thing is that with the quality of the device they've got it's possible they can expand their audience into an older, broader audience. It was interesting to see games like Saint's Row on the device. If we could bring, let's say, a House of the Dead or an Aliens title, if the audience for 3DS is much broader it could give us much more scope in that market, and that's as exciting as well as Mario & Sonic and Monkey Ball games. That's Nintendo all over. It does seem at times they operate in their own market and invite everyone else in. Sega has had lots of success with Nintendo's Wii, so how do you feel about PlayStation Move and Microsoft Kinect – do they really advance motion control gaming?
Mike Hayes

I think so. Kinect is very clever as a device. We will see publishers including ourselves do a lot more with Kinect as time goes on. Right now, I don't think we're using that device as much as we possibly can, simply because we haven't had enough time to develop for it. But we're really pleased with Sonic Riders. It's one of the only branded Kinect games so far. Move is an absolute delight, I've been playing with that with games that are in development and it really is a great natural motion device. Do you think consumers will be able to understand the difference between all three motion control consoles on the market?
Mike Hayes

Move is very much the device in terms of something physical, whereas Kinect is about spacial movement, and I think they are very different. You could argue that the PlayStation 3 owner with the wand versus the Wii owner is a different gaming experience. I'm not sure they would necessarily compare them.

Clearly, Sony and Microsoft want a slice of that mass market that they've not yet captured. As a third-party publisher, if they can do that, Sega has already had success with Wii globally, if we can get those consumers onto the Xbox 360 and the PlayStation 3, we'll be delighted because the kind of games that we've got will suit those controllers. The key thing is will it drive the installed base of those consoles? And that's something where we'll have to wait and see. The last set of Sega Sammy financial results highlighted a weakness in the US and Europe – do you see these new technologies helping to lift those regions, or is it something you need to change at Sega as well?
Mike Hayes

We can't break down results, but actually Sega Europe last year had its biggest year since 1993. It was also one of our most profitable. The success we have there is driven by how well we've done with Mario & Sonic, Virtua Tennis, Football Manager and Total War. Where those brands may be less successful in the US is where we have a bigger task in pulling Sega back to the position it was.

We want Sega in the US to be in as good a position as it is in Europe. We're very well balanced in Europe with good PC products, we're certainly very good in the mass market, and with 360 and PS3 we know we can't compete with Ubisoft, Activision and EA. However, we are prepared to invest in titles like Aliens Vs Predator, Bayonetta or Vanquish to get good games out. What I need to do is find games that are more appropriate for the American territory. That is very much where the focus for the company is going to be, whether that is in acquisition or working with developers on commissions to create more product for the American market.

That's very much my position as well as building the digital parts in the US. We're never complacent. We're happy with our position in Europe, but I need to be able to build the American business quite aggressively over the next three to five years.

Mike Hayes is president of Sega West. Interview by Matt Martin. The second part of our interview with Mike Hayes, where he discusses Sega's digital plan in detail, will be published next week.

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Matt Martin avatar
Matt Martin: Matt Martin joined GamesIndustry in 2006 and was made editor of the site in 2008. With over ten years experience in journalism, he has written for multiple trade, consumer, contract and business-to-business publications in the games, retail and technology sectors.
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