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In the realm of video game companies, Sega is making a significant comeback after two decades of struggle. Known for its success in the 1980s and 1990s with games like "Streets of Rage" and "Shinobi", Sega is now preparing for a resurgence, leveraging a strategic mix of nostalgia, innovation, and cross-media approaches.
The success of video game-based movies, such as "Sonic the Hedgehog" and "The Super Mario Bros. Movie", has created a craze for video-game movies, and Sega is not missing the opportunity. The blockbuster success of the "Sonic the Hedgehog" movie series has reinvigorated interest in Sega’s IPs and helped expand its fan base globally, beyond just gamers. This transmedia strategy significantly boosts licensing revenue, which surged 140% to ¥32.5 billion ($218 million) in FY2025.
Sega is focusing on revitalizing classic franchises from its 1990s heyday to capture both longtime fans and new players. These remakes form a pillar of their strategy to capitalize on nostalgia while modernizing gameplay for today’s market. The company is also working on a major new "Super Game" project aimed at reclaiming its status as a top-tier game developer. This ambitious project seeks to restore the glory Sega held during the 1980s and 1990s.
In addition to gaming, Sega is strategically expanding its footprint worldwide. The company recently opened its first flagship merchandise store in Japan, having launched a similar shop in Shanghai in May. Sega is also pushing into Southeast Asia and other regions through subsidiaries and partnerships focused on localized content.
Sega is also shifting towards ongoing revenue models with free-to-play mobile titles like *Persona 5: The Phantom X*, and leveraging its strong IPs in mobile gaming markets, especially in Southeast Asia where mobile gaming is booming.
David Cole of DFC Intelligence suggests that Sega should focus on "high-end" gaming: larger-scale, more involved titles that encourage brand loyalty. This aligns with Sega’s aim to deliver high-quality, standout titles that can compete globally.
The competition in the game market is very fierce, as acknowledged by Sega's COO, Shuji Utsumi. However, Utsumi states that the company aims to expand its business globally rather than focusing on the Japanese market. This global push is a response to the boost in global appetite for Japan’s pop culture, including through nostalgic game remakes and movie adaptations like the "Sonic" series.
Young tourists in Tokyo shopping near Sega’s new store expressed fondness for the company’s games, citing their retro charm and evolution with time. Even 19-year-old American Danny Villasenor expressed his long-standing affection for Sega’s games, stating that he grew up around them. William Harrington, a 24-year-old from Los Angeles, mentioned that his father introduced him to Sega’s older games, making the company feel like childhood to him.
Sega's parent company, Sega Sammy, also makes arcade and gambling machines, including those used in Japanese "pachinko" parlours, whose numbers are in decline. However, Sega's focus remains on gaming, having not sold gaming hardware since its Dreamcast console was discontinued in 2001.
Sega's current global expansion strategy centers on leveraging nostalgic game remakes, successful movie adaptations, and developing a new "Super Game" to fuel a major comeback and broaden its worldwide presence. The company is set to make a significant impact on the global gaming scene, appealing to both old and new fans alike.
- Sega's global expansion strategy also extends to entertainment, as evidenced by their involvement in creating video-game movies, such as the successful "Sonic the Hedgehog" series, which has boosted their international cultural appeal.
- Apart from gaming, Sega is actively venturing into other areas, opening flagship stores like the one in Japan and expanding in Southeast Asia, demonstrating a strategic and ambitious approach to extending their brand into diverse markets.
- With a focus on delivering high-quality, standout titles that cater to a global audience, Sega is positioning itself to compete not only in the video game industry but also in other areas like movies and TV, embracing a broad-spectrum entertainment approach.
