Sega’s President Aims to Expand Fanbase Beyond Gamers, Inspired by Disney’s Approach: “We See Everyone as Potential Fans”

In recent years, Sega has embarked on an ambitious journey to expand the reach of its beloved franchises beyond traditional gaming. This initiative goes beyond just Sonic the Hedgehog and Angry Birds, which have made their mark in Hollywood. The company has opened its first physical stores in Japan and launched retail locations in China, hosted pop-up events worldwide, and organized concert series featuring music from their games. These efforts aim to monetize their properties in innovative ways, moving beyond direct game sales.

In a detailed interview with a Japanese business publication, Sega President and COO Shuji Utsumi emphasized the significance of diversifying their intellectual property (IP) across various media. He noted that many fans of their franchises may not actively play the games, yet they contribute to Sega’s growth.

Utsumi pointed out, “In recent years, the number of fans of our games who don’t actually play them has increased. For instance, merchandise for the Like a Dragon series is thriving, with about 60-70% of purchases made by women. Many fans have engaged with the series through YouTube channels and streams, even if they haven’t played the games themselves.”

He added, “Even if these individuals haven’t played the games, we consider them fans and gamers. The power of transmedia lies in creating multiple pathways to fandom, sometimes resulting in fans who are even more engaged than those who play the games directly.”

This strategy of expanding IP into new mediums and heavily merchandising them for core fans is a long-standing approach in Japanese gaming and entertainment. Utsumi sees this as a crucial area for growth, especially given the current challenges in the industry. While the PC gaming sector is on the rise and Sega has found success on Microsoft platforms, supply chain issues and increasing costs are making it harder to maintain consistent growth, prompting the company to adapt.

Utsumi also highlighted the global success of anime in recent years and how it has boosted the visibility of Japanese music artists and songs linked to popular shows. Sega aims to replicate this success with its merchandising strategy, not only to generate revenue but also to introduce its IP to new audiences who might eventually return to the original games.

“The transmedia project I’m working on at Sega is heavily influenced by my previous experience at Disney Interactive Asia,” he explained. “Disney has a clear licensing program when releasing a movie to maximize profits. We developed a calendar around film releases and built long-term relationships with licensees to create clothing, stationery, toys, and more. I’m applying a similar transmedia strategy at Sega.”

This approach was also behind the now-canceled “Super Game,” a game-as-a-service initiative that aimed to explore broader possibilities for Sega’s properties. However, as development progressed, the challenges of scaling the project became apparent. “Our transmedia expansion focuses on growing our business outside of games, but Sega remains a game developer, and we couldn’t overlook the games-as-a-service sector,” Utsumi noted.

“If we could create something from scratch that appeals to a global audience using our IP, the potential rewards would be significant. We invested in developing the necessary technology, but as we advanced, the scale of investment and operational demands grew tremendously, making it increasingly difficult. Given the current global situation, we decided it was too challenging to continue, leading to the cancellation of Super Game.”

Despite this setback, Sega is actively developing games that leverage its classic IP, like Crazy Taxi, which resonate with Gen X and Millennial players and offer opportunities for transmedia growth. The company’s modern strategy focuses on capitalizing on its marketable characters, not just to create new games but to engage audiences who may not play them. A Persona fan who enjoys concerts and merchandise is just as valuable as a Like a Dragon enthusiast attending stage shows or a Sonic fan who simply finds the blue blur adorable.

“When I first entered the gaming industry, I felt that both players and developers viewed games primarily as toys,” Utsumi reflected. “Thanks to efforts to elevate games as a significant form of entertainment, the medium has become a dominant cultural force, akin to movies and music. As we develop games in line with current trends, it’s crucial to consider how to expand these IPs and maximize profits, with transmedia expansion being a key component.”