Sega gambles on Internet to extend U.S. comeback

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Sega of America is set to unleash a $150 million marketing blitz for SegaNet, a new online gaming network and its biggest gambit yet.

Sega, hoping to shrug off its underdog status, has much riding on SegaNet. A year after staging a comeback of sorts with its Dreamcast videogame console, Sega now bets that being first in the online gaming arena will give the third-ranked console company an early advantage over bigger rivals Sony Computer Entertainment America and Nintendo of America, as well as Microsoft Corp.'s X-Box.

Sega breaks three new TV spots supporting the high-speed multiplayer gaming network on MTV during the network's Video Music Awards broadcast on Sept. 7.


The commercials, part of an ad campaign created by FCB Worldwide, San Francisco, will introduce 17- to 24-year-olds to the concept of online gaming using the Dreamcast videogame console and SegaNet. The Dreamcast console has a built-in modem that enables online play through the SegaNet Internet service.

As part of its sponsorship of the MTV awards, Ulala, the sexy character from Sega's Space Channel 5 game, also will appear in promotional spots hyping the Best Dance Video category.

The 60-second "Civil War" ad shows groups of kids playing Sega games against opponents they don't know. The spot introduces a group of city kids, a surfer kid, country kid, trailer park kid and a teen-age girl jamming on the Dreamcast against their opponents.

"We're showing kids from coast-to-coast playing against each other online," said Joe Culley, VP-marketing for Sega. "The challenge for us was how do you talk about SegaNet as a new property and make people understand that Dreamcast and a SegaNet account deliver a new experience."


In the spot, the national anthem is whistled in the background with the voice-over: "It's evening in America. And across this great land, young men and women from all walks of life are coming together through the power of the Internet with one common goal: To whup each other's booties." The commercial culminates in an explosion. Two :30s feature popular Sega game titles NFL 2K1 and NBA 2K1 and spotlight the ability to play games and trash-talk online in real-time.

All the spots incorporate a nostalgic element at the end: the Sega scream. The vaunted rallying cry is something the brand's aficionados have never forgotten, according to Brian Bacino, senior VP-client creative director, FCB. The scream was created by Goodby, Silverstein & Partners, San Francisco, in the early '90s, during Sega's heyday. Last year, Sega used the tagline, "It's thinking," but it lacked visceral emotion, Mr. Culley said. "The scream is part of our history; the brand value of the scream still resonates."

Mr. Bacino concurred: "Peter Moore [Sega's president-chief operating officer] wanted to bring [the scream] back. . . . It was a bigger umbrella and could stand for more than the Dreamcast," he said.


Sega faces formidable challenges as the console market makes way for the October 26 entry of PlayStation 2 from Sony.

"This will be the true test of what happens to Dreamcast," said Matt Gravett, videogame analyst for technology research firm PC Data. "It's not going to be life or death for Dreamcast. . . . We still have to wait until the other systems are out, but there's going to be a clear-cut winner this season," he said, referring to Sony's likely fourth-quarter blowout. Sony has promised to have 1 million units available in North America at launch, but most analysts say the demand will far outstrip supply.

As of July, Sony's PlayStation held a 50% unit share of the console market; the Nintendo 64 scored 33.5% and the Dreamcast had 15.7% of the market, according to PC Data.

Mr. Gravett said Nintendo didn't want to go up against Sony in this fourth quarter, choosing to put its heft behind the GameCube, its next-generation console due to reach the U.S. in October 2001. Another wild card is Microsoft Corp., quickly ramping up plans for its console, code-named X-Box.


Sega's challenge, Mr. Gravett maintained, is to successfully mount SegaNet before any other systems come out. "If they can establish something that the others can't offer, that's something gamers look for," he said.

TV spots for SegaNet will run on broadcast and cable networks until mid-November; print ads will run in gaming and entertainment publications. Sega also will promote Dreamcast and SegaNet online with new agency partners Lot 21 and Freestyle Interactive, both San Francisco. Lot 21 is responsible for creative and media planning; Freestyle handles technical aspects of the effort and some media. The agencies have developed promotional-oriented Java-based games within ad banners, e-mail and viral marketing, streaming video applications, online contests and other interactive programs.

Event marketing activities include Sega's sponsorship of Ozz-fest and other alternative artists, a Mobile Assault Tour with stops on college campuses, as well as tie-ins with MTV not yet finalized. The online SegaBowl training camp slated for October will promote NFL 2K1 and culminate in a championship pegged around the Super Bowl.

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