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Sega CEO Haruki Satomi Interview on the Company's Future Revelations on the Sammy merger and thoughts on Sonic

#1 User is offline 360 

Posted 05 May 2018 - 07:05 AM

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So thought this new interview with Sega's CEO was super interesting and worthy of discussion.

On the Sammy merger - which everyone has believed up to this point was a hostile take-over (according to this - it wasn't):

Quote

CT: You joined the family business around the time when your father acquired Sega in 2004 and merged both companies together. At that time Sega had already abandoned its console business and was focusing very much on software development. What was the vision back then of your father to bring these 2 companies, Sega and Sammy together?

Haruki Satomi: He definitely wanted to be a global entertainment company at the time and by adding the Sega part into the business and moving in a different direction, it was easier to achieve. But when he made the decision at that time it was not only a business decision because the former owner of Sega was my father's mentor and had even asked him to be the CEO of Sega prior to acquisition. But at the time he had to focus on the Sammy business so he denied being the CEO of Sega. But after he passed away, Sega's senior management got in trouble as you know. Their performance was not great, so he decided to come to the rescue, and it was him giving back to his mentor.

CT: Mm, so he felt obligated to save Sega because it belonged to his friend?

Haruki Satomi: Yes.


The mentor: Isao Okawa. The guy as you may remember who gave hundreds of millions of cash and CSK stock to save Sega in the Dreamcast days. He was also the reason why the Dreamcast even happened in the first place (he wanted Sega to go out on a high-note after the failure of the Saturn). So according to this, Haruki Satomi's Father swooped in to save Sega with the blessing of and as a kind gesture to Isao Okawa - who previously wanted Sammy and their then-CEO involved.

Then we have some interesting comments on Sonic - or more specifically Sonic Mania and Sonic Boom:

Quote

CT: You joined Sega immediately after the merger. The company had a huge fan base, but it was bleeding. Turning the company around was difficult and you had issued a statement to say you betrayed the trust of fans and you were working very hard to improve the quality of games. What actually happened?

Haruki Satomi: Simply that several years ago when we launched a Sonic game, the reception was very bad, there was a site called Meta-critic that aggregates the critics and scores games from 1-100, and at that time the Sonic game got 30 out of 100 so I felt like we…

CT: Disappointed fans?

Haruki Satomi: Yeah disappointed, did not meet those expectations for the big fan base we have. So after I took the lead it will never happen again and I told our development team or even sales team that we should not release a game unless we 100 percent agree with and are confident of the quality.

CT: So back in the 90s Sonic the Hedgehog was one of the most successful and well-known franchises of Sega. Now fans of Sega are wondering when Sonic is going to make a successful comeback. What are you telling them?

Haruki Satomi: One of the answers I gave was the latest two titles which we launched last year, Sonic Mania and Sonic Forces, especially Sonic Mania which got a 80s, 85ish Meta-critic score and fans are excited about this game and people really love it, actual sales was very strong, and we introduced a Sonic animation series over the last two years. We recently announced the new partnership with Paramount for a Sonic movie project that's going to be available November 15th to December 19th so it's a little more than one year but it's coming soon and we're really excited about it. We can bring Sonic to the next level and not only bring the Sonic game to existing fans but we try to grow our fan base worldwide.

CT: So you think this movie is going to be a big thing when it comes to reviving Sonic the Hedgehog, making a successful comeback?

Haruki Satomi: Yes, one of it, one of our efforts to do so.


At first, because he said "several years ago" I thought he meant Sonic 2006. But he mentions "30" on Metacritic with Sonic Boom: Rise of Lyric standing at 32 and thus the only Sonic game scoring that low so he must mean Sonic Boom.

So it was Sonic that spearheaded the quality-first initiative with Sonic Mania being a prime product of that - and he notes that Mania was ultra-successful, something important that he recognises, and given this is being said at the top of the company it points to a potentially bright future for Mania and similar Sonic-led initiatives. It's a really interesting interview. These are only two particular sections but it ultimately paints a picture of a bright future for Sega. The right guy is absolutely in charge here. He clearly cares, passionately so, and coming off the recent Sega arcade event with all those cool announcements like Shenmue HD it appears he's righting the ship so to speak.

So thought I'd give you guys a heads up. Sega seems to be in a strong position with big ambitions for Japan and elsewhere. Hope it leads them to immense recovery and success.
This post has been edited by 360: 05 May 2018 - 07:39 AM

#2 User is offline itsstillthinking 

Posted 05 May 2018 - 01:46 PM

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Nice find! While iv never been a fan of the Sammy merger as much as the next guy, in order for Sega to survive financially it was in a sense really needed as 2004 was the first time Sega had made a profit since 97

#3 User is offline Billy 

Posted 05 May 2018 - 04:26 PM

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Very interesting. It does seem that big business in Japan values keeping power over companies in the hands of friends and family. As opposed to here in the US, where the start and end of the decision seems to be "who can make is more profit?" (Not that I know anything about big business.)

Also glad to hear confirmation of the success of Mania, and that even the top is paying attention. Gives me real hope for the future of the franchise.

#4 User is offline JaxTH 

Posted 05 May 2018 - 11:37 PM

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View Post360, on 05 May 2018 - 07:05 AM, said:

On the Sammy merger - which everyone has believed up to this point was a hostile take-over

I've literally never heard this.

#5 User is offline Overlord 

Posted 06 May 2018 - 01:57 PM

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"Hostile" in the sense that Sega was the minor partner, and the one that got bought by the other, but yeah the Sammy merger has, all things considered, been nothing but good for both companies. A single holdings entity let the two effectively continue running as their own things, and Sega got much-needed financial stability. Looking back on it, it all makes sense with the above story.

#6 User is offline 360 

Posted 06 May 2018 - 03:52 PM

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View PostJaxTH, on 05 May 2018 - 11:37 PM, said:

I've literally never heard this.


What Overlord said, essentially. Though it was reported at the time as a hostile take-over as memory serves. Microsoft showed interest and almost bought them, Sega almost merged with Namco but discussions failed and then the business world reported Sammy winning out (perhaps mistakenly given these revelations) with a hostile take-over by Sammy - though evidently the real truth is that it was amicable.

I mean, check out this article from GamesIndustry.biz in 2004:

Quote

Admittedly, what eventually transpired was a hostile takeover by Sammy rather than a happy merger - but given that Sega's board was aware of, and by all accounts actually approved of, Sammy's purchase of former parent company CSK's shares well ahead of the fact, this has to be one of the least hostile "hostile take-overs" in business history.


It was genuinely reported at the time, in a mass of news outlets, that it was a hostile take-over. These revelations however indicate, importantly, that that is however not the truth.
This post has been edited by 360: 06 May 2018 - 03:54 PM

#7 User is offline Black Squirrel 

Posted 06 May 2018 - 04:10 PM

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I'm no expert in this field, but I'm pretty sure the "hostile" part comes from the target company not wanting to be acquired.

Sega were whoring themselves out all over the place at the time.



I was going to write this all down once, including the failed Bandai merger and lots of statistics from annual reports, but I just didn't find myself caring enough about the topic. That and we can't do graphs on the wiki.
This post has been edited by Black Squirrel: 06 May 2018 - 04:11 PM

#8 User is offline 360 

Posted 06 May 2018 - 05:10 PM

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View PostBlack Squirrel, on 06 May 2018 - 04:10 PM, said:

I'm no expert in this field, but I'm pretty sure the "hostile" part comes from the target company not wanting to be acquired.

Sega were whoring themselves out all over the place at the time.

I was going to write this all down once, including the failed Bandai merger and lots of statistics from annual reports, but I just didn't find myself caring enough about the topic. That and we can't do graphs on the wiki.


I'm supposed to be an expert - given I have a business degree - but I did it so long ago and transitioned in to screenwriting shortly thereafter that my memory/education is hazy now. From what I recall it's business terminology to describe a specific type of acquisition - meaning if business outlets were reporting it as a hostile take-over at the time that genuinely was the type of business acquisition it was even if the Sega execs feel differently whether it be now or even back then. For what it's worth I'd be super interested in a report/document about all this stuff.

So if you ever did becoming willing to write one I'd love to read it.
This post has been edited by 360: 06 May 2018 - 05:11 PM

#9 User is offline Laughingcow 

Posted 06 May 2018 - 11:57 PM

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This has to be one of the few times that a video game executive listening to Metacritic is a good thing.

Now they need to figure out what the dysfunction is within Sonic Team so we can at least get some 70-ish Modern Sonic games.

#10 User is offline Covarr 

Posted 07 May 2018 - 01:11 AM

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Quote

A hostile takeover is the acquisition of one company (called the target company) by another (called the acquirer) that is accomplished by going directly to the company's shareholders or fighting to replace management to get the acquisition approved. A hostile takeover can be accomplished through either a tender offer or a proxy fight.

The key characteristic of a hostile takeover is that the target company's management does not want the deal to go through.

Source

If there were other interested companies, it's distinctly possible that one reporter misread the situation and several others sourced him. I don't think that's the case though. Almost everything I've been able to find points to two primary reasons for this label:

  • Revisionist history and complete guesses by angry fans at the time (there were a LOT of people who didn't want Sega to be bought by Sammy, some because they thought Sammy would ruin Sega and others because they wanted Sega to just die)
  • Analysts concluding that it was a hostile takeover without enough information, and media outlets reporting analyst guesses as facts.


These two things, combined with a decade and a half long game of telephone and fuzzy memories can make it really easy to assume the hostile takeover was common knowledge, because it was certainly commonly said. I'm certainly inclined to take an insider's word over unsourced and badly-sourced hearsay.

Not to mention, a hostile takeover of a company in the midst of such profound flailing as 2004-era Sega just wouldn't be a sensible business decision. If anything, it ought to have seemed like Sammy was just throwing their money away on a company that had just spent the past decade proving itself quite adept at producing unprofitable market failures, especially considering they didn't follow the purchase up with sweeping executive changes.

As an aside, does anybody else see this as similar to Sega's own buying of Atlus? Both were pretty much out of nowhere, and both proved to be very good for both the buyer and the buyee.

#11 User is offline Cooljerk 

Posted 11 May 2018 - 08:37 AM

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Satomi has been doing an awesome job with sega lately. Great interview.

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