Sammy Poised to Make Cancellations at Sega?

‘All possibilities’ talk breeds fear…

Posted by Staff
It’s looking as though Sammy may very well make some serious changes to Sega, following yesterday’s news that the Japanese pachinko giant has acquired 100% of CSK’s stock in the company, amounting to almost a quarter of the entire kit and caboodle.

Speaking to CNN yesterday, Sammy USA’s president John Rowe made comments relating to the future of Sega, now that Sammy will be a key decision maker, in terms of business operations and development strategy.

“There are not any (sic) significant plans to change Sega's business or operations substantively or in any major way," said Rowe. "We have to proceed slowly and carefully and figure out ways in which the two companies can help each other.”

Note the use of the word ‘significant.’

"At this point, I would say we are looking at all possibilities involving this investment, and expansion of our holdings could happen,” Rowe continued.

Note the use of the phrase ‘all possibilities.’

However well dressed these comments are, they are by no means a commitment to allow Sega - recently more profitable that in a long time - to continue on its path untouched in any way. Sammy has its eyes firmly set on Sega’s massive market share of the world’s coin-operated gaming space over and above everything else. Indeed, Sammy has shown little interest in making a dent in the home console market, farming out much of its publishing rights to various third parties.

Sammy also runs a tight ship, solely focused on turning a profit, using proven IP and business methods across all operations. Sega, it must be said, has a very different approach to business, happy to take risks, to develop new franchises and to spend huge amounts of cash on the dreams of its senior development staff.

For instance, is Sammy likely to greenlight any future instalments of the Shenmue series, a series that has burned more cash than perhaps any other in history? In truth, it is unlikely.

Sammy Japan has now gone on record to state that it intends to up its stake in Sega in the coming weeks, with even Rowe stating that “…expansion of our holdings could happen.” If Sammy were able to muster around $500 million, which it almost certainly could, stock on the open market could be acquired to the extent that would see Sammy as the major stakeholder in Sega.

In reflection of this, Sega shares leaped in price by almost five percent in overnight trading.

Expect everything Sega, as it happens.
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