Sega Networks Strategic Presentation

Sega Networks experienced a period of significant growth in the fiscal year ending March 2016, with gross sales increasing by 34% year-over-year. Despite this growth, the company fell 27% short of its initial sales forecast, primarily due to the underperformance of new and overseas titles and delays in product releases. The domestic market has matured, leading to increased competition and a downward trend in download volume, while the rising sales threshold for top-tier titles has heightened the risk of market exclusion for underperforming games.

To address these challenges, the company is shifting its strategic focus toward resource concentration and operational restructuring. Management is narrowing its development pipeline to prioritize mainstay titles and improve overall quality, while simultaneously reorganizing overseas operations under the goGame platform. This transition includes a move toward more robust localization, the integration of third-party settlement methods to capture non-credit card users in Southeast Asia, and the expansion of non-game revenue streams, such as advertising and data solution services.

The company’s methodology for this strategic pivot relies on internal performance data, market analysis from third-party sources like App Annie and GameStyle Lab, and projections regarding the efficacy of its new O2O (online-to-offline) advertising services. By leveraging major intellectual properties and collaborative projects, the company aims to stabilize its portfolio and secure long-term profitability. Future growth is predicated on the successful execution of large-scale updates for existing titles and the aggressive expansion of its global publishing and monetization infrastructure.