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[cja]

Blatantly obvious listening to the just finished Take-Two conference call. First, Take-Two have confirmed the games will not be full price and are "value products". Take Two estimate $20m in revenues for the ESPN games. With a wholesale price of $13-14 you're looking at 1.5m total units at a $20 retail price point so the numbers add up at this price. Maybe $30 at retail depending on the balance of the Sega deal but unlikely.

Take-Two commented they're looking forward to their "relationship with Visual Concepts". They are sharing all costs, including development, for these ESPN games. The newly installed Take-Two CEO has also mentioned they have an option to increase their participation in the deal, well, they're already co-publishing, distributing and paying their fair share for the product, where else is there to go!

 

[Meier]

Looks like that price on Gamestop was true.

 

[LuckyBrand]

if ESPN NFL 2K5 is $20-30, it will be my obvious choice, I was already leaning that way!

 

[cja]

Just a couple of other small points. The deal has yet to be finalised. Looks like Take Two wanted some good news so got Sega Japan to issue the press release at the same time Take Two's poor results were announced.

Take Two are still being investigated by the SEC. Activision or THQ would have been more circumspect partners and have plenty of cash to do any deal. Seems like Sammy are desperate to get rid.


There has to be something else to the deal. The monetary benefit of Take-Two agreeing to pay a share of the development and marketing costs for a full price game and releasing it at a budget price aren't obvious. Wild speculation on my part but perhaps Take-Two will ride out however long the ESPN license is for at a budget price point and then take up the option to buyout Sega Sports and release a Rockstar sports brand next-gen.

 

[SolidSnakex]

It's not really surprising. The ESPN games just aren't selling well enough. Sammy said they're going to make Sega profitable again and that's what they're trying. They're cutting the fat. They're going to keep stuff like Lets Make a Pro... games but the stuff that just doesn't sell is gone.

I really think Sammy is the best thing to happen to Sega. They clearly know how to make money as they're constantly one of the highest grossing companies in Japan each year.

 

[Soul4ger]

It's not really surprising. The ESPN games just aren't selling well enough. Sammy said they're going to make Sega profitable again and that's what they're trying. They're cutting the fat. They're going to keep stuff like Lets Make a Pro... games but the stuff that just doesn't sell is gone.

I really think Sammy is the best thing to happen to Sega. They clearly know how to make money as they're constantly one of the highest grossing companies in Japan each year.

Doesn't really matter to me if they're making money, but releasing shit I could care less about. Of course, bleeding money, but having me enjoy their games until bankruptcy isn't a much better option, I guess.. They're dead to me, either way.

 

[SolidSnakex]

Doesn't really matter to me if they're making money, but releasing shit I could care less about. Of course, bleeding money, but having me enjoy their games until bankruptcy isn't a much better option, I guess.. They're dead to me, either way.

They have to release that stuff because they don't have the money to fund big projects anymore. If Sammy can work them back to profitable status or atleast get them going in that direction. We should see the old Sega start to come back because they won't be constantly worried about going bankrupt as they have to be now.

 

[Matlock]

Madden wins.

 

[DMczaf]

If ESPN 2005 is $19.99, I am easily buying all of the titles.

 

[cja]

Archive of the conference call is now online for anyone interested. The q&a session in the last half of the call has many analysts asking about the Sega deal.

 

[dskillzhtown]

If ESPN 2005 is $19.99, I am easily buying all of the titles.

Me too. I'll take a chance on NFL2k5 for that much. I definitely will get NHL. But NBA2k5, no.

 

[ZILLION]

A few snippets from the call about the Sega deal

"We will apply our distribution resources to the Sega Sports properties"
"Visual Concepts will continue to market and develop these products"
"Products will be published under a new Sega/Globalstar label"
"Multi million dollar marketing campaign"

I don't see anything that implies Sega is getting out of making/publishing sports games.

Here's the press release from Sega of America.

New York, NY - June 8, 2004 - Take-Two Interactive Software, Inc. (NASDAQ: TTWO) announced today the Company has signed a binding letter of intent with SEGA Corporation to co-publish and exclusively distribute on a worldwide basis all SEGA ESPN Videogames sports titles, including ESPN NFL Football, ESPN NHL Hockey, ESPN NBA Basketball, ESPN College Hoops and ESPN Major League Baseball. The ESPN Videogames titles are developed and marketed by California-based Visual Concepts Entertainment, Inc., a subsidiary of SEGA Corporation, and will be co-published under the SEGA/Global Star Software label. The products will be exclusively distributed through Jack of All Games in North America and Take-Two Europe for international territories.

The multi-year co-publishing and distribution agreement includes a provision for Take-Two to further extend its participation in SEGA's sports game business and all associated intellectual property for current and future gaming platforms.

"We believe this exclusive relationship with SEGA is a great opportunity for Take-Two," said Paul Eibeler, Take-Two's President. "We have tremendous respect for the critically acclaimed properties that Visual Concepts has created and we are confident that our global sales and distribution capabilities provide the resources that will fully support these products." "The combined efforts of SEGA and Take-Two will create an exciting and powerful partnership that is sure to heighten the level of aggressive competition in the growing sports game segment," said Hisao Oguchi, Representative Director and President of SEGA Corporation.

"We are excited to have Take-Two bring their second-to-none distribution power and proven experience reaching the mass market to the ESPN Videogames franchise we've built with SEGA," said Greg Thomas, President of Visual Concepts. "We are proud of the quality of our games and the loyalty of our fans, and we look forward to being able to reach a whole new audience."

A significant part of Take-Two's strategy is to gain market share by offering extremely high quality products, supported with aggressive marketing and value pricing. "We plan to expand the audience for ESPN Videogames' sports titles by applying a variety of proven marketing techniques," said Mr. Eibeler. "We are also adding the compelling element of value pricing to this high quality line, creating a significant point of differentiation for both core and casual gamers. We believe the recent console price cuts are bringing new consumers into the interactive entertainment market, and sports titles will be a meaningful part of their software purchases. Finally, with Sony and Microsoft not publishing sports titles this holiday season, there is a significant competitive opportunity for ESPN Videogames titles. The combination of these factors should expand the overall market for sports titles."

 

[BlackClouds]

All this means is that Sega has no faith in SOA promoting and distributing these games. Maybe that THQ deal worked out well for Sega. Take 2 should do a better job, and also with the budget pricing, it seems they are making it real easy for folks to buy the game. Maybe some buzz can get generated by the time the next gen systems are out, then people will be ready to buy a full price version then.

 

[Ripclawe]

This is how the denial over the end of Dreamcast started.

 

[ZILLION]

All this means is that Sega has no faith in SOA promoting and distributing these games.

SOA's distribution was fine. VC has their own marketing department so they can't blame SOA for that. What it comes down to is Sega obviously was willing to sell the game at a budget price,so they went to a publisher who's had great success at moving titles in the budget market.

 

[BuddyC]

This is how the denial over the end of Dreamcast started.

It's just sleeping.

...that was cold, bastard.

 

[Alcibiades]

I hope Sega hasn't dished out long-term rights, cause I can see these games getting popular again at a budget price...

 

[Izzy]

ROFL, what's next? Selling Virtua Fighter rights to Midway?

 

[Mashing]

I have a question... What the fuck does Sammy know about the US market? Have they ever released a game in the US that wasn't a bomb?

 

[Alcibiades]

SOA's distribution was fine. VC has their own marketing department so they can't blame SOA for that. What it comes down to is Sega obviously was willing to sell the game at a budget price,so they went to a publisher who's had great success at moving titles in the budget market.

actually, this is very true...

Take-Two has had great success with Jack of All Games as a budget line, they have a lot of PS-X stuff out...

Hopefully Take-Two doesn't have any ambitions in terms taking over Visual Concepts...

 

[AniHawk]

They have to release that stuff because they don't have the money to fund big projects anymore. If Sammy can work them back to profitable status or atleast get them going in that direction. We should see the old Sega start to come back because they won't be constantly worried about going bankrupt as they have to be now.

I just don't want them to eventually ignore what the fans have been clamoring for. I'd like to see a Skies 2, a Shenmue III, a GREAT 3D Sonic game, another Panzer game...

Just would like to see it marketed correctly and on the right system so we'll have more down the line.

 

[Mrbob]

Does anyone have a quote about releasing ESPN2K5 at a budget price?

It is a good way to combat Madden. Get the lower price point to entice a ton of new buyers. Then as your userbase grows raise that price.

 

[mjq jazz bar]

If anything, this is a good thing. The topic set a negative tone, but now I'm actually quite happy about this direction Sega is taking. They're basically making their sports games profitable...

 

[SickBoy]

As long as the titles keep getting decent resources for development, I think this is a good thing. I'll probably buy most of the 2K titles if they're only $20. Definitely football (last 2K title I had was 2K2 -- I prefer Madden, but that's a nice price) and hockey, which they only needed to continue tweaking and improving in presentation.

-SB

 

[ZILLION]

Does anyone have a quote about releasing ESPN2K5 at a budget price?

It is a good way to combat Madden. Get the lower price point to entice a ton of new buyers. Then as your userbase grows raise that price.

It's briefly mentioned in the conference call somewhere between the 20 and 35 minute mark. They didn't give exact pricing but they said it would be positioned as part of the budget line in an effort to get people to try the game.

 

[retardboy]

I don't really think they're giving up. I asked Dave Z a question and he said Sega is still the publisher and Take Two is just their new distributor. He wasn't very detailed because he's not allowed to talk about work stuff, but if TT is just the new distributor, that's a great thing because TT has a lot more power than Sega since they've got GTA.

 

[jarrod]

I don't really think they're giving up. I asked Dave Z a question and he said Sega is still the publisher and Take Two is just their new distributor. I wasn't very detailed because he's not allowed to talk about work stuff, but if TT is just the new distributor, that's a great thing because TT has a lot more power than Sega since they've got GTA.

So it's similar to their THQ GBA deal?

 

[retardboy]

I guess... Hopefully this will give ESPN more exposure since Take Two has retailers by their balls with GTA.

 

[Fifty]

ROFL, what's next? Selling Virtua Fighter rights to Midway?

VF is sega's baby, while VC was in complete control of the ESPN/2K games. I'm not shocked at all by this. The THQ deal was much bigger. They had another company distibuted Sonic games for crying out loud.

 

[belgurdo]

I have a question... What the fuck does Sammy know about the US market? Have they ever released a game in the US that wasn't a bomb?

There's a reason why the phrase "one hit wonder" tends to enter threads about Sammy (and technically it's not even that true...)

 

[jarrod]

VF is sega's baby, while VC was in complete control of the ESPN/2K games. I'm not shocked at all by this. The THQ deal was much bigger. They had another company distibuted Sonic games for crying out loud.

Funny as it sounds, didn't Sega of America at one point sell rights to Acclaim for a N64 version of VF3? I thought that's what led to the eventual multiplatform Crazy Taxi/18 Wheeler/Zombie Revenge deal?

 

[jarrod]

There's a reason why the phrase "one hit wonder" tends to enter threads about Sammy (and technically it's not even that true...)

You mean Viewpoint?

 

[Fifty]

Funny as it sounds, didn't Sega of America at one point sell rights to Acclaim for a N64 version of VF3? I thought that's what led to the eventual multiplatform Crazy Taxi/18 Wheeler/Zombie Revenge deal?

Hmmm. If so, I wasn't aware of that. Interesting.

 

[Gunstar77]

One question then, who ran the servers in the past? Is it VC or Sega? If Sega did, we now know why it is only $20 from Take Two.

 

[FitzOfRage]

Funny as it sounds, didn't Sega of America at one point sell rights to Acclaim for a N64 version of VF3? I thought that's what led to the eventual multiplatform Crazy Taxi/18 Wheeler/Zombie Revenge deal?

I hadn't heard that. I thought the Acclaim deal stemmed from the fact that for a while Acclaim had exclusive rights to the Ferrari license in the US and Europe, so Sega offered up those games in order to get Ferrari F355 released.

 

[jarrod]

Found it...

It's not a news article. What I think Vic is referring to is a post Sam
Kennedy made not too long ago to the Gaming Age forum. Sam Kennedy worked at
videogames.com at the time the rumor of an Acclaim-SEGA deal broke. He also
worked at one time or another at Gaming Age and Game Fan. Since it got brought
up here's what Sam Kennedy claimed:

"OK, a couple of you emailed me about this so I'll post it here. This is the
whole deal behind Crazy Taxi coming to the PS2. All of the info below is from
sources within Acclaim/Sega. Please don't spread this around too much though.
Earlier this year, when I was still working at GameSpot, I got word of one of
the strangest rumors I'd ever heard: Crazy Taxi was on its way to the PS2. It
sounded too crazy to be true, but after all that Okawa stuff and the split-off
of some of the Sega developers I thought it was worth some investigation. So
did some serious research into it - spoke to people inside Sega of America,
Sega of Japan, Acclaim US, Acclaim Japan and found out that Crazy Taxi was
indeed coming to the PS2. But there was a lot more to it than just that.
Acclaim scored the license to 5 Sega games to be brought to the PS2. Not all
were decided upon right away, but 2 that were chosen were Crazy Taxi and Zombie
Revenge.

But how did this deal happen anyway? Well, it gets even stranger. The deal
actually began a few years ago. Acclaim, high off of its successful rebound
during the earlier 32 bit years, put up a bunch of money to score the license
of all licenses: Virtua Fighter 3 for the Nintendo 64. Yes folks, Acclaim at
one point or another had the rights to bring VF3 to the N64. The deal was
masterminded by a person whose name I can't mention at Acclaim and Mr.
Iramajiri himself. However, once Iramajiri returned to Japan and SOJ found out
about the deal, it caused a whole stir there. Everyone was against it,
naturally. So to get out of that deal, SOJ presented some other alternatives.
One of them was that Acclaim was to receive lower licensing fees on Dreamcast
games (could this be why Acclaim produced lots of DC games right from the
start? I don't know). And, to the best of my understanding, this is where the 5
other game license deal came along.

Back to earlier this year. Internally Acclaim was starting to work on getting
things prepared for bringing the Sega games to PS2. This included signing the
developers, preparing press releases (for E3, when the deal was to be
announced), and working on retailer release schedules. And this is where things
started to go wrong. Somehow Crazy Taxi for PS2 appeared on some UK release
list well before it was supposed to. And word immediately hit the net.

So with word out there, I (at gamespot) decided it was time to say something
about the deal. So I and another editor wrote up a story which included some of
the info I posted here. But it never ran. It couldn't - not without some named
sources, which we couldn't provide. Basically, the story could have been
potentially damaging to Sega and GameSpot couldn't be reckless with it.

So, instead, a much toned down version of the story ran. It stated that there
was a rumor of Crazy Taxi coming to the PS2 and used a quote from Sega of
America denying it. A few other sites ran similar stories that day.

The funny part about all of this is that SOA's denials to gamespot and IGN
didn't even really matter. This was a deal between Acclaim and SOJ. So once
these stories hit, SOA got real scared. Because - and I've heard this from a
few people - they had no idea what was going on at this point. Frantic calls
were made to both Sega of Japan and Acclaim to find out what the deal was all
about. And apparently SOA wasn't getting easy answers out of both sides.

But in the end, SOA did a good job of quieting all of those Crazy Taxi coming
to PS2 rumors. However, a few sites did keep pushing SOA on the topic. And this
is where things started to turn really bad for Acclaim. Sega of America did
everything in its power to put a stop to the deal and claimed that Acclaim had
breached its contract. The fact that word of this contract - which was supposed
to be kept in utmost secrecy - was leaked out at Acclaim's fault was what SOA
needed to put a stop to it. And from that point, which was in April/May, I've
yet to hear anything more. Apparently, the deal has been killed now (or maybe
put on hold?).

So this may turn out to be one of the greatest deals that never happened. The
interesting part is that some industry insiders speculate that this deal could
have helped turn around Acclaim's financial state. Right now it's looking like
the company may not be around too much longer.

In any case, that's the basic story regarding the Acclaim/Sega deal. Pretty
crazy, huh?"

Thanks Google!

 

[SickBoy]

Virtua Fighter 3 on the N64 would have been interesting. Maybe not good, but interesting.

-SB

 

[jarrod]

Acclaim also tried to get rights for a N64 port of Dead or Alive iirc.

 

[Ashitaka]

I guess... Hopefully this will give ESPN more exposure since Take Two has retailers by their balls with GTA.

It's not as though retailers weren't carrying the ESPN games though, they just got crushed by EA. Whether or not Take Two will be willing to pay for placement up front is debatable since they're already apparently going to sell for a lower price point than usual; I'll be the first to admit that I don't know all the financial details behind the deal though.

 

[retardboy]

One question then, who ran the servers in the past? Is it VC or Sega? If Sega did, we now know why it is only $20 from Take Two.

I doubt it'll be $20... It'll probably be more like $39 like ESPN MLB this year was. And anyway, Sega's still the publisher so it's not like it's TT decision to lower the price. I think Sega knows they need to do something to increase sales and they think price is the thing.

 

[BlackClouds]

It's not as though retailers weren't carrying the ESPN games though, they just got crushed by EA.

You sure about that? I haven't seen ESPN Baseball at the local Walmarts, Target, and K-mart. Best Buy seemed to not have the Xbox version recently. Distribution is far from ideal.