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The $50 Million Dollar Shenmue Question

The man leading Sega into the future discusses his delicate dance with fans.

Sega has tried to thread the needle with Sonic, but fans haven't responded with an embrace.
Sega has tried to thread the needle with Sonic, but fans haven't responded with an embrace.

"You want what you’ve always wanted, but you also want something new. You want things to look like they always have, but you want the buzz of the new. Contradictions? No problem. They come with the territory. But is it possible to ask, and is it even possible to deliver something for everyone?"

That was Nintendo of America president Reggie Fils-Aime at its E3 2011 press conference, as the company made its pitch for merging the hardcore and the casual.

Sega and Nintendo are not very different, both Japanese companies with nostalgia-fueled legacies that help and haunt them.

Sega can't be an easy company to run. Fans are rabid, unrelenting. No Sonic game will satisfy them (though one could argue they haven't been very good), and without fail, every Facebook update has someone demanding a new Shenmue. But do people really want a new big-budget Shenmue, or just think they want one? At what point does the scale tip in favor of pushing something into production? 10,000 Facebook likes?

Former Sega of Europe leader Mike Hayes stepped into the role of running Sega's European and American divisions two years ago. When I talked with Hayes at E3, he described the past few years as a reconstruction. In order to face the future, Sega had to catch up to the present.

"A lot of what we've done in the past two years has been work underneath the water, rather than the swan on the top," said Hayes, as we spoke in one of E3's private meeting rooms, above the roaring show floor, overflowing with pedestrians. "It's the paddling underneath. [EA CEO] John Riccitello mentioned it at the Nintendo conference--it's about transition, and that's the key thing for us. How do we take the IP that's particularly strong at Sega and how do we bring that on to the different platforms [such as Facebook, iOS], rather than just the consoles we're used to?"

Sega's seen critical success with Platinum Games, but it hasn't exactly translated to sales.
Sega's seen critical success with Platinum Games, but it hasn't exactly translated to sales.
== TEASER ==

A look around Sega's booth at E3 shows a company with scattered priorities. Anarchy Reigns, a multiplayer focused brawler from Platinum Games, a development team founded by former Capcom employees, harking back to when Japan was gaming HQ. Aliens: Colonial Marines, Sega's push to forge an identity around an existing movie property away from the day-of-release game movie business that's seen less and less support from savvy consumers. Sonic Generations, the latest attempt by Sega to please old school fans and today's youth.

I joked about listing off a series of franchises Sega hasn't touched in years and asking for individual updates. Jet Set Radio? Panzer Dragoon? Phantasy Star? Seaman? Skies of Arcadia? ToeJam & Earl? Hayes, and the public relations girl, both laughed. Then, they both sighed.

"We listen and we think [about if] there is a real market opportunity," he said, "but the key thing is...there's a great fondness, but to bring it into the modern world is quite a tricky thing to do. In many instances, it's a very expensive thing to do to try and get to that point. We need to be quite smart. A lot of what we're doing, for example, on XBLA and PSN, is looking at reimagined IP. We can do that far more successfully and more reasonably and actually give players both a bit of nostalgia and a sort of up to date taste of how we can use that technology."

NiGHTS turned out be a product of its time, as the sequel didn't receive the warmest reception.
NiGHTS turned out be a product of its time, as the sequel didn't receive the warmest reception.

It's not as simple as identifying a fondly remember franchise and slapping a new developer on it. Golden Axe and Vectorman reboots both imploded. Did you play NiGHTS 2? Heck, look at what happened to Namco Bandai's Splatterhouse--that even had two assigned developers. Memories deceive, and it takes a talented developer to channel what made something magical in decades past and bring that up to speed. Duke Nukem Forever finally launched this week. That was worth the wait, right?

"We're really drilling back into the homeland of Sega," said Heyes. "We're very pleased with the progress, but as with all things, it takes time. It takes time. I think, certainly, this year, we're in good shape to perform well in the market. [...] The good news is Sega does have a lot of IP. It may well be that we unlock some of those that we haven't actually seen for a long time, and bringing them back on the new platforms that we have."

Sega has tried reboots in a box, ala NiGHTS 2 and Outrun 2. The company has seen more hits than misses on Xbox Live and PlayStation Network, where the games of Sega's past are more primed for reinvention that doesn't alienate those who've demanded their return in the first place. And you might not have liked Sonic the Hedgehog 4: Episode 1, but it did sell very well for Sega.

There will be more episodic Sonic, but also more reinventions of classics.

"You'll see a lot more being reimagined and reduxed on XBLA on PSN over the next two years," he said. "[...] We listen a lot to what people want and we've tried, in the past, with some great success and with less success to try and reimagine those. As an example, we're bringing Shinobi onto 3DS, which so far has seem to have gone down pretty well--it's a high-quality game. Hopefully, we do realize that for the consumer that likes that--that it's a fair representation of what we remember Shinobi to be."

Fans have continued to demand a new Shenmue game, something Sega still mulls over.
Fans have continued to demand a new Shenmue game, something Sega still mulls over.

Even though Hayes has been asked about Shenmue dozens of times, I wanted to touch on the subject, but only to propose how Sega wrestles with the fan demands against the marketplace.

"[With] a $50 million reimagination a Shenmue...are we going to achieve something that, at the end of the day, players are happy with?" he said, letting the question linger, as if asking himself.

Because even when you give fans what they want, maybe that's not what they wanted at all.

Patrick Klepek on Google+