In January of this year Sega announced that it will become a third-party publisher and will develop games for multiple platforms. At the time, the company confirmed development for the Sony PlayStation 2 and the Nintendo Game Boy Advance. At the Tokyo Game Show, Sega took it a step further by confirming its support for Microsoft Xbox and announcing at least 11 games for the console in the process. Today, the company's vision of becoming a multiplatform publisher was fully realized as it officially announced support for the remaining major console platform, the Nintendo GameCube. Renowned internal development studios such as Sonic Team and Amusement Vision are already developing games for the GameCube and speculation is thick regarding a joint project by Yuji Naka and Sonic Team and Shigeru Miyamoto and his team.

　　To get further perspective on today's announcements, GameSpot had the opportunity to speak with Charles Bellfield, vice president of corporate and marketing communications, at Sega of America. Bellfield spoke candidly regarding Sega's restructuring plans, the future of the Dreamcast, and GameCube support. Naturally, we couldn't help but ask about the rumored Naka-Miyamoto project.

　　GameSpot: It was mentioned during the meeting in Japan that Sega plans to either liquidate or sell more than 20 of its subsidiaries and affiliates. Can you give us any specifics?

　　Charles Bellfield: At this point, we don't have any further details on specific ones. We actually considered scaling down up to 20 subsidiaries, but that's not necessarily what we'll do. We're just looking into reviewing our business at the moment. Obviously in terms of our group companies, you're looking at everything from development teams and arcade centers to our technology-based companies and developers that we have investments in. There are many developers outside the Sega family that we currently have large shareholdings in as well. So, it is across the board.

　　GS: It's been rumored that the layoffs that were announced will affect some of the internal development teams at Sega. Is there any truth to those rumors?

　　CB: The redundancies and early retirements that we announced--that was about 300 people--are mostly from our head office support staff. That doesn't include any of our internal developers. So, at this point, none of the announcements talks about the development teams specifically. Although, I would say that we're looking into the reinforcement of a significant number of the companies that we own domestically in Japan. So, with the development teams, we are taking profitability into account and considering our multiplatform development strategy.

　　GS: So, we can expect 65 games for the Dreamcast this fiscal year?

　　CB: Yes, but remember that it refers to our releases globally. Some of those games are being developed specifically for the Japanese market.

　　GS: The Dreamcast release list has become thin lately, but the announcement of 65 games for the upcoming fiscal year certainly reinforces the comments you've made regarding Sega's intentions to support the console going forward, doesn't it?

　　CB: Absolutely. We will continue supporting the Dreamcast as long as publishing on the platform is a viable business for us. That doesn't mean that both selling the hardware and publishing is possible. It is just whether publishing alone on the platform is possible. So, now without having the hardware burden around our shoulders, I think the length of time we're willing to publish on the Dreamcast is actually longer than it would have been normally. Secondly, some of this content is already in development. Finally, particularly with our multiplatform support, the ability to develop a Dreamcast version of a specific game, while developing the same game for multiple platforms, is especially cost-effective.

　　GS: From the numbers being thrown around, it sounds like there will be a total of 118 games released by March 2002, including 53 games for the PS2, Xbox, and GameCube...that's a lot of games. Can you handle that much development with your current development resources? Especially considering the planned consolidation of your workforce?

　　CB: These games were always slated to be in development, and of course over the last 12 months we have shifted development from one platform to others. There will obviously be multiple SKUs, so you will see several games shipping on more than just one platform. I personally believe that the ability for us to deliver that number of games is very much there. If [our teams were] able to develop successfully on the Saturn, they can do anything on the PlayStation 2 without a problem. Also, if you look at the size and number of people in our development teams, you'll see that we are able to develop that quantity without any problem at all. There is a lot of Sega content in development at the moment. Certainly, on the Dreamcast over the next six to nine months, there is a significant amount of content coming through. As we move forward onto other formats, the variety of content you've seen from Sega over the last 20 years will continue going forward. Look at the Dreamcast lineup we've had over the past 10 to 12 months. Go back to E3 last year and look at the range of content that we had. Now, just imagine the possibilities with us supporting all these different platforms, and you can see that the content will be there.

　　GS: Now that your support of the GameCube is official, when will we hear about some games?

　　CB: We did officially announce today that we are supporting the GameCube. We currently have Sonic Team and Amusement Vision developing content for it, and we will have further announcements at E3. I can't confirm what those announcements are or whether we'll have any specific titles, but we will have further announcements. But obviously Sonic Team developing for the GameCube, that's a big enough story in its own right--Naka-san developing for Nintendo.

　　GS: Along those lines, can you comment on the rumored game that both Nintendo's Shigeru Miyamoto and Yu Naka and his Sonic Team are developing?

　　CB: I have absolutely no comment about that. We're not talking about any content plans and haven't announced any specific details at all.

　　GS: Fair enough. Switching gears, will we see online games across multiple platforms from Sega? Much like we've seen with the PC and Dreamcast in the past?

　　CB: Absolutely. You've seen it already with not only first-party games, but also with games such as Quake III Arena and 4x4 Evo, for example. We view SegaNet as an independent platform, and the online opportunities we have allow our content to be platform agnostic. Online gaming brings that networked experience to the consumer without having to be so dependant on the hardware platform you bought, and it allows our content to reach a much bigger audience. So, I would definitely say that our vision is to share content between platforms in the online world.

　　GS: Is there one specific platform that Sega will support more heavily than another? Or is it more of a multiplatform strategy?

　　CB: We're looking at all platforms with all our development teams, franchises, characters, and licenses. We're making the best business decisions for Sega. Obviously, we want to bring as much of this content as possible to the biggest market. Sega is not limiting its options, but certainly we've had specific conversations with platform companies. So, we're willing to speak with anybody about any sort of business deal.

　　GS: How well has the excess Dreamcast inventory sold thus far, particularly at the reduced price?

　　CB: Currently, the Dreamcast inventory is selling very well and is beating all our internal forecasts at the moment. Our retailers are very happy with the performance, and it obviously makes them happy that they have something to sell this summer and leading up to the fall. The Dreamcast is fulfilling that demand. We expect that it will have a user base of 4.5 million in the US by the end of the next 12 months.

　　GS: Sega's arcade business was a point of discussion during today's announcement. Can you talk a bit about Sega's plans to expand that business and your partnership with Sony and Namco in that space?

　　CB: Yes, we're looking to expand our arcade facilities. We're looking for new venues and expanding that business. Our consolidation over the last 12 months should be reversed by growth in that sector by 2003 and 2004. We don't really have any details on that specific partnership, with the exception of just saying that it is a partnership where we are developing the technology and the content with Namco. Sony will be providing the arcade hardware. It has a broadband network, and it is based on the PS2 architecture with a hard drive. Obviously, being at the forefront of bringing content to that product allows us to bring content to the consumer market afterward very quickly.

　　GS: Will it use the System 246 hardware?

　　CB: At this moment, I can only say that it is PlayStation 2-compatible hardware from Sony.

　　GS: A lot of the strategies discussed looked well ahead, to 2003 and 2004. Where do you see Sega, as it relates to its financial position and position as a software developer, in three years?

　　CB: I think the announcement Okawa-san made with his gift, just before his untimely death, allowed Sega to take out all the costs we had when withdrawing out of the hardware space and underwrite those costs. It also allows us the ability to invest into our development teams in the short-term to serve as a bridge that lets us quickly transition into being a third-party software publisher. The most important thing it allowed us to do is that it allowed the investors and the analysts to understand the potential that Sega has without having the hardware noose around our neck. Our stock price has tripled over the last three months, and that is a really good indication of where our investors see Sega going forward. The expected growth in our sales and revenue numbers over the next three fiscal years puts us on track to be the leading provider of interactive content globally. We're a company that is focused on what we need to do. We've made the changes. We've built a new team in Japan, we've reinforced the management team here in the States, and we've brought in a new infrastructure in Europe to make ourselves a successful third-party publisher and developer.

　　GS: What can we expect from you guys at E3?

　　CB: There won't be a lot of bells and whistles, but we have lots of announcements.

　　GS: Thanks for taking the time to speak with us, Charles.