Tendo City

This is about Sammy's first announcement after the stock purchase a few days ago.

http://story.news.yahoo.com/news?tmpl=st...sammy_dc_1

Quote:Sammy CEO: Deal Adds to Muscle in Arcades

Wed Dec 10, 4:55 AM ET

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By Kunihiko Kichise and Daisuke Wakabayashi

TOKYO (Reuters) - The head of Sammy Corp., Japan's biggest maker of slot machines, said on Wednesday it can work with video game maker Sega Corp., in which it became the biggest shareholder this week, to boost its presence in the arcade game market.

Sammy, which also makes pinball-style "pachinko" game machines, agreed to buy 39.1 million shares in Sega, known for its "Sonic the Hedgehog" video games, for 45 billion yen ($420 million) on Monday from information services firm CSK Corp

The two had broken off merger talks in May due to disagreements over management and other integration terms, but Sammy Chief Executive Hajime Satomi said the biggest sticking point was trying to reach an agreement with CSK, Sega's biggest shareholder at the time.

"CSK wanted to do whatever possible to get the highest price for Sega, so it really didn't work out then," Satomi told Reuters in an interview. "But I told CSK to come to me first when it really wanted to unload Sega."

Sammy paid 1,158 yen for each Sega share, a 13 percent premium to Monday's closing price. Shares in Sega had risen more than 70 percent since Sammy pulled out of talks in May.

The new stake will be added to the 100,000 Sega shares, or 0.06 percent of shares outstanding, it acquired in 1999. It is now the biggest shareholder in Sega. Investment bank Goldman Sachs is Sega's third-biggest shareholder with a 3.5 percent stake.

Satomi, who personally holds nearly 25 percent of Sammy's shares, said taking a majority share in Sega was one of many options he had wanted to consider, including possibly setting up a holding company or a full merger.

"I can't imagine this happening, but if our vision does not agree with that of Sega then we might have to consider taking more shares," said Satomi, who categorized his relationship with Sega as friendly.

Satomi said he wanted to join Sega's board of directors as soon as possible and play a role in the video game publisher's management. Separately, sources close to the matter said Satomi would become a board member early next year.

Sammy also develops video games for commercial use, along with its core business of supplying machines for pachinko parlors, which are ubiquitous in Japan and are invariably filled with devotees watching as tiny metal balls whirl around the upright pinball machines.

Players can win or lose money but the government defines it as a form of entertainment, not gambling.

One of the potential benefits from the acquisition of Sega shares, Satomi said, will be in sales of Sammy's "Atomiswave" game machines for arcade use. Sammy plans to use Sega's library titles and branding strength to help the fledgling machines.

Sammy started selling the arcade machines in April and Satomi said the game development costs are significantly less than for existing machines. Atomiswave also allows arcade operators to change unpopular games by switching cartridges.

Shares of Sega fell 5.23 percent on Wednesday to 1,014 yen, while Sammy shares closed down 1.4 percent at 3,530 yen. By comparison, the benchmark Nikkei average fell 2.11 percent.

($1=107.11 Yen)

Hmm... no so sure if this is good or bad... I don't know if Sammy's taking over and telling Sega to do more arcade games on the Atomiswave (which I believe is more designed for 2d than 3d) will be good for Sega... looks like it could hurt Sega's uniqueness and experimental games, for sure... :(

I don't know what to think of this just yet. I'll wait until I hear whether or not Shenmue III is going to make it before I make up my mind.

It sounds pretty bad to me. Almost like a hostile takeover. From what I've heard a lot of Sega's teams don't like the management of Sammy, especially the Smilebit team. And the foucs of the arcade can only mean less console games.

Yeah, the tone of this article sounds pretty ugly. Sega might survive, but if this goes the way it looks like it might they'd lose their trademark 'we'll make what is cool at the expense of doing what would be most profitable' that has made them hardcore favorites, and well might have a big talent exodus... more focus on arcade games would go along with that since Sega has always done arcade games but never to the importance of its console games... we definitely need to learn more about this, but early indications are not good.

It certaintly doesn't sound like good news; it will probably mean less console games and not many unique ones. Not a good thing to happen.

Especially given how Sega is/was one of the most innovative console companies around, in the 'weird games' category...

I think Sega made a big mistake when they decided to spread their games across all platforms. I think they would have been better suited if they had put all of their games on PS2, maybe porting games like Sonic and Monkey Ball to GameCube.

Hmm... maybe, but then we wouldn't have gotten all those great Sega games on the Cube...

I think you're being sarcastic...but I'll answer as if you were being serious.

Great Sega games? Like what? Let's see there was Super Monkey Ball and...well you know what? That's all there is!!

I was serious.

Uhh... sure, they're Dreamcast ports, but Skies of Arcadia: Legends and Ikaruga are great games. The sports games are quite good too from what I've heard... and good games, like Sonic Adventure 2... and probably Sonic Adventure DX, and the Sonic Mega Collection... yes, and Monkey Ball 1 and 2, which are fun.

Ikaruga wasn't made by Sega.

Ports. That's what we got. Ports. Except for a very, very few games. Like Monkey Ball, which IS a great game. But when you look at everything else about the best you can say is "good".

Yup, you're right, we got ports, and the PS2 and X-Box got their top tier new games. But my point is we wouldn't even have gotten that if they had stuck to one console...

Yeah, but what's good for us GameCube fans wasn't necessarily good for Sega. They needed to focus on PS2 because they were in a very delicate situation financially and the PS2 has by-far the largest userbase. Sega games sold like crap on Xbox and MS even bundled them trying to get rid of them. I still think they should have put Monkey Ball and the Sonic ports on both PS2 and GameCube, though, since those games sold pretty well for third-party GameCube games. If Sega had focused on one console, though, they wouldn't have split up their fans. Not every hardcore Sega fan can afford to buy all three consoles, so those who stuck with one console ended up not buying Sega's games on other consoles. Given the niche quality of many of Sega's titles it is not a good idea to split up your userbase.

True, given their financial situation breaking up their fanbase wasn't the best idea, but I'm sure they did it in the hopes of growing their fanbase into the users of those platforms... sticking to one platform would be best for Sega fans, but if you want to get the most new fans you'll have to support multiple platforms. The problem was that they released almost everything for just one platform, which is something that most third parties just don't do. I guess they didn't have the money to release them on all formats or something, but it probably would have been the best path, and one most all third parties take... or at least the two platforms you find most suited for the game. Their sports games are the one exception.

They would have done a lot better if they hadn't released all those Xbox games that sold horribly.

I don't think it's been reported anywhere yet, and it's just talk at this point, but it sounds like the first casualty of the Sammy takeover is going to be Visual Concepts. The ESPN games haven't been selling too well even though many people think they are better than EA's games, so Sammy is thinking of just ending them. This would be a horrible, horrible shame because ESPN is the only major competition for EA right now. I don't want to see them getting lazy. What I'd love, but what will never happen, is if Nintendo bought VC to become an exclusive sports developer for the next Nintendo. It's too late to try to bring sports fans back to GameCube, so get one of the best sports developers around and make sure you have all the major sports covered next-gen.

I am sure they will not be the last... I mean, Sega is a much bigger than the average developer purchased by another company, but that doesn't seem to matter here because Sammy is in control... it seems like Sega's going through what so many companies have when they get bought.

The end result (sometimes it takes a while, but it usually happens) usually seems to be a company nowhere near as good as it was and without any of its top talent.

http://www.gamespot.com/xbox/driving/seg...85901.html

The first of many?

Damn, this is Rare all over again.

I'd compare it more to the collapse of Atari than to Rare.

It's too early to call it a collapse. Just a few key figures are leaving, just like what happened with Rare a few years back.

Yeah, but it is easy to see that this is just the beginning. There's talk that VC is gone, that a lot of Smilebit wants out, and even that a lot of the members of Sonic Team are thinking of leaving. I guess it is too early to say, but things look much worse than Rare's situation in my opinion.

Yeah, it definitely makes me think of Rare and/or Atari... or the numerous other companies that had troubles, had to be sold, and then bled talent...

Need I mention the very recent case of Interplay?

Yeah, this is pretty depressing. Well who knows? Maybe Yuji Naka and co. will start their own studio or move to Nintendo, and Yu Suzuki will move to Microsoft and get to working on Shenmue III.

Sure, you can console yourself by saying 'maybe they will go elsewhere and still work their magic and be great', and you know what? Sometimes that is true. Frequently it seems that other companies do step in to do something to replace them... but you just can't recreate the same magic, even if you can still make great games, I'd say...

How about Sid Meier? By any standards, leaving Microprose was a good idea -- Microprose went steeply downhill from under Spectrum Holobyte to now owner Infogrames, and Firaxis has made some great games... but still... maybe it's with the dispersion of talent and stuff, but Civ 3 dissapointed me. SimGolf didn't look like a Firaxis title. I know they're still great, but compared to what he did under Microprose... you can never quite recreate that magic, even if you can still make great games.

Something similar has been happening with Black Isle and the companies it influenced, Bioware, Troika, and Obsidian... all three are great, but are they as great as they were when their talent was all working together? Probably not... even if they are still really good.

Now... is a big part of this nostalgia? Sure. But it's not 100% nostalgia, I'd say. But what does this say for Sega? Well for one thing it's a much bigger company. Oh, sure, Interplay once released like fifteen games a year, and Sierra in that same category at least (I think we've discussed that one enough to not have me have to repeat it all), but Sega is a huge, huge publisher. It's very sad to see them struggle. As I've said, they've been one of the big innovators... and like Looking Glass Studios, failed despite making some of the greatest games in the categories they have made games in. So sad. Of course Looking Glass is a more depressing topic... sure, one good team escaped (the guys who made Freedom Force and are now doing Tribes 3), and Warren Spector got Theif, but Theif isn't Looking Glass. Looking Glass was about some of the most innovative 3d games ever. I haven't seen anyone seriously try to step into their shoes and really change that genre like Looking Glass did with Ultima Underworld, System Shock, Terra Firma (uh, forget the exact name, but it had mechs or powersuits or something...), Theif, etc. did.

Or look at Free Radical Design, who so far have released two solid FPS's and have the potential to become a AAA developer. If enough people move to the same company then it can end up well.

Of course as I said the problem usually is that these broken up companies spawn a whole group of offspring... Firaxis was lucky for a while, having all three of the big names there, but Brian Reynolds left a few years ago... oh, sure, he's been quite successful (Rise of Nations), but still, losing him had to hurt Firaxis. I'd say it defintely hurt Civilization -- Civ 2 and Alpha Centauri were both his, and were better than Sid's Civ 1 or Jeff Briggs' Civ 3, I'd say.

Free Radical... Rare people, right? They aren't the only ex-Rare group, though... isn't ZooCube one too? But I don't know the details of who went where.

Haha, it's Zoonami. They're working on stuff but have yet to show anything.

Yeah, I thought I had the name wrong but didn't remember what it was. :) And you're right, we have no idea what they are making, but they are definitely ex-Rare guys.