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SEGA’s Strategy SEGA’s strategy is to become a world leader in video entertainment. Their strategic intent is to build an entertainment empire. To achieve this, SEGA has adopted a technology oriented strategic plan that focuses on acquiring and maintaining competitive advantages in fields such as multimedia, computer graphics, virtual reality, and high tech amusement theme parks. The research and development spending has been boosted to capture the market before the competitors. SEGA’s strategy is characterized as “first at all cost” since the burn they took from Nintendo on the release of the 8-bit system. SEGA has competed in both the in-home and out of home video entertainment. The United States theme park industry is now a $6 billion industry. SEGA’s future strategy includes entrance into this market with their SEGA theme parks. These parks will provide games with high-tech graphics and virtual reality simulations. Plans include 50 parks in the United States, and another 50 in Japan. SEGA has been involved with arcade games, and used that technology to implement games for the home systems. SEGA’s marketing plan includes the SEGA Club, a push in Japan’s market, and a review of their European markets. The SEGA Club is a marketing channel for SEGA to capture teens and pre-teens. SEGA’s objective is to bring good, clean video game entertainment and educational products to the market for teens and pre-teens. SEGA also plans to put more emphasis on Japan, since the margins for sales in Japan are much higher. This includes new products, increased advertising, and marketing that is more extensive. SEGA is also planning marketing research in Europe in order to respond better to the consumer preference and competitive cond...

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...n return Nintendo was forced to play catch up. With Nintendo the strategy was characterized by the industry as “slow & steady wins the race” The video game industry is attractive and there are above average profitability possible. There is tremendous industry growth potential. In 1994, the video game industry was a 15 billion-dollar industry worldwide. In 1985 it was less then 100 million. Two thirds of the children in North America between the ages of 6 and 14 played video games. There is a tremendous amount of money to be made in the video games industry. It not only has a large percent of children 6 to 14 in North America but also have a large percent of people 18 and older who play video games. Nintendo did a study of ages of players. The look at under 6, 6-14, 15-17, and 18+ and the percentage of players o f NES systems was 2%, 48%, 11%, and 39% respectfully.
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