Dateline: 22 May, 1998. Not even 24 hours have passed since the New Challenge Conference where Sega announced the Dreamcast hardware. A group of the most prominent and respected journalists, including SEGA SATURN MAGAZINE, have massed at Sega's Tokyo headquarters. The primary purpose of this visit is to meet Shoichiro Irimajiri - President of Sega Enterprises and Dreamcast visionary. The image you may have of a corporate leader of a multinational may be of a stuffy, super- professional businessman... but in the case of Mr Irimajiri, nothing could be further from the truth. In the time that we spent with him, he came across as a very charismatic, forthright leader with a clear vision for Sega's future. He was optimistic about the position of Sega in the Japanese market and was not afraid to tackle what could have been difficult issues, such as the relative failure of the Saturn in the western markets.
But perhaps the most important aspect of the interview was the fact that he could have just dwelled on the jaw-dropping 3D performance of Dreamcast. He didn't. Instead he explored a new focus for Sega, which is great news for the games players of the world. Sega's new strategy is to put the customers FIRST, taking on-board their perceptions and suggestions from the very beginning. The bottom line is that Sega are back with a vengeance thanks to Dreamcast. The machine's right, the games are going to be right and the firm are spending more money on the launch than Sony did with PlayStation. How can it fail?
SEGA SATURN MAGAZINE: With the Saturn remaining in a strong position in Japan,
how will Dreamcast fit into the market?
SHOICHIRO IRIMAJIRI: Our basic strategy is to bring the new machine into the Japanese market at the end of this year. If there is the demand for Saturn hardware we can supply and we will support the software business in parallel with Dreamcast - we are planning between 150 to 200 Saturn titles between now and the end of this year. We are encouraging the third parties to develop Saturn titles because some developers have been less than proficient in the Saturn world... and with an installed base of five million units there might be a good business chance for them. Mainly, some third parties who have very good capabilities with 2D graphics will find the Saturn to be the best machine for this. The Japanese market has a huge following for 2D animation, so 3D titles will go to Dreamcast and 2D titles might go to the Saturn.
SSM: Is there not a threat that the PlayStation has too strong a following? What can
Sega do to attract games players from PlayStation?
SI: As you saw yesterday, the performance level of our hardware is far superior to PlayStation so the quality of Dreamcast will be much, much better than PlayStation. Most of the third parties are saying that they want to devote their big titles to Dreamcast because of the superiority of the hardware. I think that for a while - either one or two years - there is no question about this. The most important thing is that we get the most considerable share of the market before the PlayStation 2 comes out and then carry on the momentum. That's our basic strategy. Also we have the confidence that even though the PlayStation 2 will come out in 1999 our hardware performance will be superior because I believe the basic elements of Dreamcast are the most advanced in all categories: CPU, graphics engine and sound engine. I have no question about the PlayStation titles versus the Dreamcast titles. My biggest concern is PlayStation 2.
SSM: Why the Autumn 1999 release in Europe and the States? Is this because the
PlayStation will be in a weaker position at this time?
SI: We have recognised that the American and European business is much more difficult than in Japan so we decided that we should be 100% or 200% prepared for the launch of the next platform - we want to get enough quantity and quality titles for the launch of Dreamcast. So this year we are 100% happy with preparation for the domestic launch... and as you know, in Europe and US, the period to develop titles is a lot longer than in Japan - 18 months is the average development period. When we launch Dreamcast next year we will have lots of good titles because we can transfer our best games from the Japanese market to the US and European markets and lots of other third parties will have titles too. Right now our people are visiting third parties and some of the developers have already started games for the US and Europe. This will be the first time we launch a new platform with enough titles for US and Europe.
SSM: Dreamcast is based on Windows and has network capabilities. Is there a danger
that it will be perceived as a cut-down PC?
SI: We believe that Dreamcast will be the best games machine in the world for between three and five years. Technology is always developing so beyond 2000 there might be a much better performance machine but the Dreamcast is best for games - that's our perception. It will probably be one of the best home entertainment platforms in many ways. We will focus on the "games machine" and the reason we use Windows CE is very simple - we want to get a wider range of titles for Dreamcast. Some of the developers who have very good engineering capabilities will not use Windows CE - they might directly access the hardware to get to the true performance of the machine. That's okay, but we are very familiar with the titles existing in the past, like fighting, driving and simulation games. But we think that thanks to the much higher performance of the hardware, the boundaries of the genre will be broadened. Music will be one of the major elements in the future of games titles. In some way we will see that the music is the major part of games in some cases. There might be very unusual titles for Dreamcast. For example is it a music title or a games title? Is it an education title or a games title? Those categories will merge so who will develop those titles? Probably the big publishers or the traditional developers will not produce games like this. It will be newcomers who develop those titles. For those people the Windows CE development environment offers the most favourable situation.
SSM: Role-playing games very important for the Japanese market. How will Dreamcast
SI: As you saw yesterday the biggest benefit of Dreamcast is to provide the almost movie-like graphics. So when you think about role-playing games, it's kind of a story, like the movies. In the past, even though the graphics movies ahead of the gameplay are very attractive, when you go into the game itself the graphics suddenly change but with the performance of the Dreamcast, the graphics will be exactly the same quality as the movies - the movies and the gameplay will be seamless. This machine is the most exciting platform for role-playing games.
SSM: Internet gaming is seen as being very important for the future and yet there is
concern for the business in that no-one is making any money from it. So why support
it with Dreamcast?
SI: Online gaming will be mandatory in the very near future. At the same time, from the online game business we cannot get money, but knowing that, everybody has to add some value by supporting it. I discussed these issues with lots of top management people from the big publishers and all of them said that they cannot get the money from online games within the next couple of years, but that they have to explore the business opportunities. That's the universal consensus.
SSM: The Saturn was not successful in the US and European market. Will this
performance negatively impact the future of Dreamcast in those territories? How can
you recapture the faith of the consumers again?
SI: This is a very good question. Even in Japan we have lost some credibility from our Saturn owners because our users have been seeing the PlayStation become the dominant force. To recapture the minds of the consumers, we have to do lots of activities. Sega is very serious and Sega will do everything to satisfy their customers. Good evidence of this was the conference yesterday. Sega has never done such a huge conference like this in the past to send a message to the consumers and until November 20 we will do everything to send our message out to the customers. In the US and Europe the frustration is much higher of course. We recognise that we have to do much more to show how serious we are until we launch Dreamcast in the US, Europe and Japan.
SSM: You took over the presidency of Sega Enterprises in February this year. In what
direction will you lead the company?
SI: Since I became president of this company I have been saying only one thing. Think and look at things from the customer viewpoint. In the past I think that Sega's basic philosophy has been that when we create a new thing we can get the customers. But we decided that it would help to listen to our customers and view the issues from the customer's side and always think of customer satisfaction. That's my philosophy and my belief.
SSM: How does Dreamcast attract the light and casual gamer?
SI: I think that this issue will depend on the titles you can buy. So to get the casual gamers we need to provide lighter titles and more games which capture the customers who are not used to being gamers but have strong interest in some areas. For that purpose we decided to use Windows CE on this machine.
SSM: Can you tell us anything about the third party producers who have signed on to
make games for Dreamcast and how many there are?
SI: I am reluctant to answer this question [laughs]. At the next conference in August or September we will reveal a lot of third parties but at this time I can say that 120 developers have already been given development kits. We have already delivered 1,000 kits world- wide.
SSM: What will be the retail price expected for Dreamcast? How
many units do you expect to sell?
SI: [Laughs] I cannot answer this because I do not know what the exact price will be when we launch. This is a very sensitive issue at this time. We are planning to sell around one million units by March 1999 in Japan .
SSM: How much are spending on the launch of Dreamcast?
SI: Roughly, world-wide, $500 million. I can say for the development of the hardware it costs between $50 and $80 million. For the software development we spent between $150 and $200 million. And for the marketing and promotion in each area we will spend $100m - in EACH area. In total around $500 million. That's a huge amount. When I was involved in the motor industry, to develop a new car, it cost around $200 million. For the manufacturing - the tools and dies - it cost $200 million. To launch the new car, promotion and marketing costs where $200 million. So $600 million in total. Just to launch this tiny machine [points to Dreamcast], we're spending the same amount of money! Incredible! I can't understand why! [laughs]
SSM: Will Sega continue to produce games for the PC?
SI: Sure, there's no question about that. After we have launched the Dreamcast titles, the PC business will be much easier for us. There will be lots of good candidates from the Dreamcast games. We are looking forward to seeing the future prosperity of our PC business.
SSM: There's no Sega branding on the box. What's the thinking behind that? After all,
it's going to cost a lot of money to build a new brand from the ground up whereas
everyone knows the Sega name. It's obviously been deliberate. Why?
SI: We have been working on the brand issue for 18 months. We conducted huge market research and found that the Sega name is very strong with the hardcore game users, but for the light gamer it is not a well-known brand name and in some cases creates some negative feelings. So this time we decided that the brand name of the platform will be the major brand name for the consumer business. So Dreamcast is the name of this platform and we will focus on that. When it comes to the software titles, the Sega name is a much more important brand.
SSM: Sega's arcade division has many top producers renowned world-wide for their
quality games. What part do they have to play in the overall software strategy for
SI: This architecture is very powerful. Already arcade developers are using the coin-op version of the Dreamcast architecture, called Noami. Yu Suzuki, the Virtua Fighter 3 producer, told me yesterday that he has already achieved 3.5 million polygons on it - this is much, much higher than the figures for Model 3. We expect that lots of arcade titles will appear on the Naomi boards in arcade centres. Consequently if we decide to do it, lots of arcade titles will be easily ported to Dreamcast. On the other hand the demand for quality titles from consumers is much higher than before. They will not necessarily be satisfied with the quality - they will want much more consumer-oriented titles so this is a good thing and a bad thing. We need to carefully select the titles from the arcade side and add some taste of home games. That's our business strategy.
SSM: Given the current state of the Japanese economy, will the US and European
markets been seen as being more important than before for the launch of Dreamcast?
SI: As you know the Japanese economy is not good at this time but who will excite the Japanese market? We will! The young people think that they cannot find any specific product come Christmas. That's the major issue in the Japanese economy. The people have already acquired lots of our products and they need to buy a much more attractive machine... and Dreamcast is it.
SSM: But has the attitude to the US and particularly the European market changed at
SI: When we had Genesis and Megadrive, the US and Europe markets were much bigger than the Japanese business. But only in the case of the Saturn has the Japanese market been more important. It depends on the product. Our hope is to be strong in the Japanese market and next year in Europe and the US.
SSM: Squaresoft games like Final Fantasy VII have given PlayStation a definite
advantage. Given that Square are so closely implicated with Sony, will you try to bring
them over to Dreamcast?
SI: Sure - we have been trying our best efforts to get Square and Final Fantasy... so the discussions have been going on. I hope that in the future we can get those very well known titles for Dreamcast.
SSM: Would you license the Dreamcast hardware to other companies?
SI: The important issue is who has ownership of the platform. The royalty issue is important. From that viewpoint I do not think so.
SSM: Is the design for the VMS, console and pad final? Is this what people will be
SI: We have not yet decided the colour, but other than that, yes.
SSM: It looks like the modem is replaceable. Is that right?
SI: Yes. Because the performance of the modem is always changing. Also, in the US, there is a lot of hype for the cable modem. So in that case, the consumer can replace the modem.
SSM: Sega and Nintendo software strategies have concentrated on characters such as
Sonic and Mario. Sony did not follow suit. Will you continue this?
Has Sonic gone forever?
SI: There is no question about Sonic. He will remain as the major character for Sega. We want to create lots of new characters for Dreamcast. Sony is trying to make Crash Bandicoot a major character. I think they has a great desire to have big characters.
SSM: Will you be aiming for exclusive third party games for Dreamcast?
SI: Sure, yes. Tomorrow we have a big conference where D2 will be announced exclusively for Dreamcast. After that there will be many more.
SSM:Can you explain the logo for Dreamcast?
SI: The logo symbolises the origin of power - the universe itself is like a vortex. That's the major reason.
SSM: Who came up with the name Dreamcast?
SI: Everybody [laughs]. We have contacted lots of companies who are in business to create brand names. Also we collected lots of good ideas internally. After that we talked to our allied companies such as Yamaha to show us their libraries of names. I think that over 5,000 names were checked and eventually we decided on Dreamcast.
SSM: Do you have a special plan to eliminate Sony?
SI: [Laughs] We recognise that Sony is our fiercest competitor and we will try to do everything to compete with them.
A very special thanks to Sega Saturn Magazine and Game-Online for this interview.