Sega president says companies with a ‘good record’ tend to have a strong global GAAS business

Sega president and COO Shuji Utsumi recently spoke about the company’s push for making its Games as a Service (GAAS) business model global, as it’s a sign of a company’s “good record.”

In an interview with The Game Business, Utsumi said that game companies with “a good record tend to have a strong [global] GAAS business.” In regards to Sega, while the console and PC standalone business is “getting better,” the publisher and developer is still working on making its GAAS business global. “That’s one of the biggest challenges,” he added.

Currently, Sega’s GAAS focus is on free-to-play mobile games, including the likes of Sonic Rumble, which is free to play but offers in-app purchases. In a 2024 interview with Automaton, which was translated from Japanese, game director Makoto Tase said that “monetization models that use gacha mechanics have not been very successful when it comes to games targeted towards worldwide audiences of all ages,” and that these mechanics “tend to be shunned overseas,” leading to ultimately deciding not to include them in Rumble.

While Utsumi didn’t specifically mentioned gacha mechanics, he sees developer Rovio, which Sega acquired back in August 2023, as the candidate for this business push. “Rovio has deep knowledge of the global mobile business, and very strong IP with Angry Birds,” Utsumi said. “We feel like the fit between Rovio and Sega is good. We are working closely with Rovio to have a Sonic mobile game, and we are giving them access to IPs, including Sonic, to come up with nice, welcoming GAAS titles.”

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Sega’s plans of expansion also include developing properties beyond games, with Utsumi referencing the success of the Sonic movies, which topped $1 billion at the global box office on January of this year. According to the president, the films have had a major impact on the franchise, leading to a significant boost to Sonic game sales.

“When I started to get involved in the video game business, I picked up Crash Bandicoot and started asking some of the movie studios if they were interested in turning that property into a movie,” he said. “But I was treated like… ‘hey, video games is like a toy business’. They didn’t really take it seriously.”

Live service games aren’t going through a healthy phase

Even though Utsumi said that game companies with strong GAAS business show a good record, studios have been struggling around live service launches.

Sony reportedly poured $200 million into live service shooter Concord, which was released late last year and pulled from sale within weeks, shuttering the studio behind it in the process. In January of this year, it canceled two first-party live service titles in development at Bluepoint Games and Bend Studio. Weeks later, contractors were reportedly cut at the latter.

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Mere weeks later, Warner Bros. Games announced it would be shutting down free-to-play brawler Multiversus on May 30. There’s still an interest around live-service models—Pragma, a backend engine for live-service games like Spectre Divide and Predecessor, secured a $12.75 million investment in March. Despite the decisions in the preceding months, previous PlayStation Studios boss Hermen Hulst said that Bungie’s upcoming live-service shooter, Marathon, won’t be making the same mistakes as Concord.

“I think that some really good work went into that title,” Hulst said during a fireside chat aimed at investors. “Some really big efforts. But ultimately that title entered into a hyper-competitive segment of the market. I think it was insufficiently differentiated to be able to resonate with players. So we have reviewed our processes in light of this to deeply understand how and why that title failed to meet expectations—and to ensure that we are not going to make the same mistakes again.”

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