Sega vs EA

source: SAN_FO article

This article was very well done, shows how the impending battle between Sega and EA will be for the first time go head to head. Its starting to heat up with Sega lashing out at EA first, and now EA is lashing back(but in the way I expected them to). I can only say is, with competition, products gets better. I can't deny how big EA is and what good they bring to the industry, but what bothers me is that there wasn't a publisher long before to really challenge EA, hence alot of franchises that were milked with quality gone down a bit in addition to only minor changes. Now that Sega is that challenger, game-wise, quality-wise both companies will get better trying to beat each other with Sega gaining more.

If Sega can keep up the pace they'll be on top in time, but they have a loooooooong way to go before EA's 43% market share.

Sega to challenge Electronic Arts with new titles
They may be just games, but rivals take them seriously

Carrie Kirby, Chronicle Staff Writer Sunday, May 19, 2002

The pressure on Sega this week is enough to give even a hedgehog sweaty palms.

After a year of huddling over its diminished stature in the gaming industry,

the firm famous for its Sonic the Hedgehog character will hit the E3 trade show with the line of video-game titles that it hopes will take it all the way down the comeback trail.

It's a path that Sega believes will lead it straight to the door of Redwood City's Electronic Arts, the industry's biggest game publisher.

Whether Sega has what it takes to knock that door down is another question.

Both publishers pride themselves on their sports games, but EA dominates, with 43 percent of the market. Sega is a distant third with 7 percent, after Santa Monica's Activision, which has 21 percent.

Now that Sega is making its football, basketball and other sporting games for all platforms, instead of just for its discontinued Dreamcast player, the game plan is to take a chunk out of EA's market.

Sega has already released NBA 2K2 and NFL 2K2 for the GameCube, Xbox and PlayStation 2 consoles. But these releases didn't pose a huge challenge to EA because the company was still playing catch up, Moore acknowledged. The NFL game came out in November on PS2 and in January on Microsoft's Xbox, as the football season was winding down.

This year, Sega is determined to release its NFL and NBA games at the beginning of each season, at the same time EA does. In addition, Sega just signed a deal with ESPN to market sports games.

Sitting in Sega's San Francisco office -- in a building it shares with Macromedia and other firms in the South of Market area -- Sega of America President and Chief Operating Officer Peter Moore sounds like a David to EA's Goliath.

After reporting $1.7 billion in revenue for fiscal year 2002, Electronic Arts is expanding its Redwood City compound, adding an amphitheater for demonstrating games and a third building to house additions to its nearly 1, 000-strong local staff.

But EA isn't laughing off Sega's threat, said John Riccitiello, president and chief operating officer of Electronic Arts.

"We'd be foolish not to take it seriously," he said. "But it's not going to come out with a close score. If they end up with a sports business 15 percent as large as ours, I'd be surprised."

EA's head start at this point is nothing to sneeze at, said CSFB analyst Heath Terry.

"As we continue to move deeper into the mass market, where brand is so important, it's going to be very difficult for anyone to gain market share against EA in sports," said Terry. "Clearly, EA has the dominant brand in sport."

Terry does not own shares of either company, and CSFB has not done investment banking for EA or Sega in recent years.

Sega shouldn't be discounted because the company is historically known for the high quality of its sports games, said Steve Kent, author of "The Ultimate History of Video Games."

"Sega can come knocking on EA's door, and I think EA's a little nervous about them," he said.

Whether Sega succeeds in raiding EA's sports game empire or not, the competition should be a fun local spectacle. In the past, Sega pulled all kinds of high jinks to wrest attention away from Sony.

In 1999, Sega's premier character, Sonic the Hedgehog, crashed a golf tournament hosted by Sony in Livermore. Sega also managed to replace hundreds of golf balls at the event with balls bearing its own logo.

What now? Will the big blue hedgehog sneak into the broadcast booth with John Madden (star of EA's football games) on "Monday Night Football?"

Sega's not saying. The company doesn't have any off-the-wall stunts planned for E3 in Los Angeles this week, according to its public relations firm. So whatever posturing goes on between Sega and EA is likely to play out in the Bay Area as the sports seasons unfold.

[ May 19, 2002, 11:31 AM: Message edited by: JM: 'Beat L.A.' ]