Lessons from Sega on how to not to build a brand for the digital era
Lessons from Sega on how to not to build a brand for the digital era
A view from Ryo Murad

Learning from Sega's mistakes: betraying trust and over-squeezing products

Betraying customer trust by over-squeezing products and releasing sub-standard games are a few of the mistakes that Ryo Murad, senior client director at Wunderman UK believes Sega made and that other brands can learn from.

The company’s chief executive and president admitting that it had "betrayed" the trust of its fans with the release of games that were sub-standard

You can’t accuse Sega of not doing everything it could to sweat its assets. There have been nine iterations of the Sonic franchise over the past 23 years including one re-release of Sonic the Hedgehog on a mobile platform.

Sega itself has finally acknowledged that this is a problem, with the company’s chief executive and president admitting that it had "betrayed" the trust of its fans with the release of games that were sub-standard. The sales figures bear this out too – Sonic the Hedgehog shifted 15 million units upon its release in 1991 to fewer than half a million for Sonic Boom: Rise of Lyric last year.

So where did it go wrong? It seems that this dependence on a single product asset from its history, which it squeezed until the pips went squeak, at the expense of developing others has left Sega looking like it too is a relic of the past. Sonic had become more famous than Sega and in a supreme piece of irony its demise in popularity was in danger of bringing the company down with it.

Nonetheless this belated acknowledgement by Naoki Satomi suggests that finally it has learned the lessons and there does seem to be at least the suggestion of a kernel of an idea of how it get itself out of this mess – even if no committed strategy other than a commitment not to release sub-standard games was forthcoming.

Having (quite rightly) given up the fight as a hardware developer – those Mega Drives are a piece of misty-eyed nostalgia – Sega now needs to reinvent itself once more as a software developer and a brand. Again, Satomi was explicit in his understanding of this, but the practicalities of building a brand in this age are now very different – particularly so for gaming brands - from when Sega burst onto the scene in the early 90s.

For Sega in particular it is crucial to make its audience feel inclusive in the process – gamers are passionate about their hobby and are constantly wired in

It’s a direct consequence of social media, which gives consumers the ability to participate and question brands, that brand building no longer takes place in isolation. For Sega in particular it is crucial to make its audience feel inclusive in the process – gamers are passionate about their hobby and are constantly wired in.

To engender their loyalty and commitment to the brand further, Sega would be well advised to have a figurehead (and one who is not Sonic) represent the brand as its leader or champion. Nintendo had the revered games maker Satoru Iwata, who developed many of Nintendo’s most popular games and led the company into mobile gaming, until his tragic death at the age of 55 this week. Sega would do well to choose a person with a similar background to articulate the company’s vision and share it with the gaming community. It’s an approach that Steve Jobs applied consummately.

While technology – and the company’s failure to keep abreast of its development - has in some ways contributed to Sega’s current woes, it could also represent its salvation. Sega could consider partnering with Twitch or Steam to test and optimise new games releases by listening to and reacting to what its fan base wants and needs. As well as refining the games and producing new franchises that will finally replace Sonic, community sharing and feedback should engender excitement and loyalty – it’s a basic principle of CRM.

Moreover, by experimenting with technology that is emerging in popularity to figure out new experiences that gamers want – such as wearable tech and second screening – Sega could perhaps catch up on all its wilderness years spent chasing Sonic chasing gold rings.