Sega ‘staggered’ by UK games retail decline

The UK is losing ground internationally as retail struggles and slows, Sega has warned.

Mike Hayes, the CEO of Sega’s Western publishing empire, this week revealed to MCV he was staggered” by how rapidly UK games retail is contracting.

He said the UK is half as valuable to Sega as it was five years ago – a telling sign as the firm prepares a new game based on the blockbuster Alien licence designed to crack new markets.

The UK is now significantly smaller than it was seven years ago,” Hayes said.

In fact I just looked at the figures and I was staggered by how much smaller it is.

There was that claim a few years ago that the UK was the second biggest games sector. Clearly the UK is still a big market, but its share of the global market in the traditional retail space is declining.

In terms of per cent of overall business, the UK is half of what it was five years ago.

We’re trying to drive business in Russia, to make business in America, and we have sub-licensing deals in South America.

But there is a definite sign that the UK is finding it hard in traditional retail.”

Hayes was talking to MCV during an event at Sega’s Creative Assembly studio, attended by culture minister Ed Vaizey, where a new Alien game was revealed.

Hayes said: This new game needs to be a success in the US, which is something a lot of UK studios have found hard to crack.”

Hayes is transitioning Sega’s empire to take advantage of new territories and the digital media boom.

When Sega started out seven years ago as a multiplatform publisher, everything was UK based,” Hayes added. Now we have this need to drive our businesses elsewhere.”

Central to this grand plan is the new Alien game, which is in early development.

Creative Assembly director Tim Heaton said that the new project needs to ignite interest on the world’s stage.

It is still a negative thing to be a European developer in the US, which is something we really have to overcome,” Heaton said.

Hayes concurred: You can’t make a game just for the UK – with the brilliant exception of Football Manager. That game still skews to the UK, but less and less and less.

You cannot run a games business unless it’s a success around the world.”