SEGA’s Licensing Strategy: Leveraging Iconic Brands and Embracing Industry Evolution

“It’s important not to jump on a fad or passing fascination when creating content,” Flores says. “Consumers can be fickle and trends will shift at the drop of a hat. Our main focus is to create content that we think will stand on its own and can be timeless. This also opens to the door to fantastical environments that unlock imagination and exploration in users.”

Brand Strength

One of the ways SEGA reaches its audience is by leveraging the strength of its existing properties. Many, including Sonic, Altered Beast, Golden Axe and Shinobi, have strong brand recognition. SEGA’s licensing program for Sonic and retro properties is a key way the company can utilize the strong brands it has developed over the years.

“To illustrate, we are successfully licensing a wide variety of products based on a range of properties from this year’s Sonic Boom TV show to retro properties such as the SEGA Genesis, which is celebrating its 25th anniversary this year,” Flores says.

In addition, SEGA seeks various pathways that allow the company to take its game properties outside of the gaming world and into other consumer product categories. SEGA has a strong track record for licensing Sonic products, which have generated strong retail sales across various categories.

“The Sonic brand has been especially strong in apparel as Sonic appeals to kids and to an older demographic that grew up with him in the 1990s,” Flores says. “We also have demonstrated great success with our toy line, which has been supported by Toys R Us. We’ve also been successful in other categories including home décor and novelty, which have generated strong sales.”

The company understands that many important steps are involved when choosing licensing partners. It also aims to work together with its partners to ensure that it is coming up with strong programs and getting into the right product categories. In choosing licensing partners, SEGA looks for companies with a strong record of producing quality products for established brands. In addition, it looks for companies that are willing to commit to a long-term program, as Sonic is a property with a familiar history and a strong following.

“Also, we work closely with our community team who hear from fans what types of Sonic products they would like to see,” Flores says. “This can direct us to opportunities with new potential licensees and follow consumer trends to determine which new categories are appropriate for Sonic.”

Able to Evolve

Just as the company once had to adapt to changes in the video game industry that saw SEGA exit the console market after the SEGA Dreamcast, it now understands that it must continue to keep up with change. In the retail environment, this includes the ongoing evolution of online retail and its impact on brick-and-mortar retail. In gaming, it includes the changing nature of console gaming and the increase in digital gaming.

“We offer a robust selection of games across a variety of formats and platforms,” Flores says. “Whether it’s mobile, next generation, downloadable content, or anything in between, we have something for consumers. It’s important to be nimble in this way, and we have been very successful doing so.”

As the company looks to stay on top of the direction of its industry, it is sure to face many challenges as it seeks to achieve its strategic goals over the next few years. For example, Flores says there is a boom in mobile gaming that is touching many people who weren’t considered gamers in the past.

“That audience is growing and changing, becoming more inclusive of gender and a wide age range,” Flores says. “Today’s gamer can literally be anyone. This opens the door to much greater access to us as licensors. It’s a very exciting time.”

Flores says that trend also means more money is coming into the industry, because there are more revenue channels. “In-game purchases and virtual goods are a relatively new phenomenon that give us more opportunities to develop creative ways to engage our fan base,” she says.

Licensing will continue to be a cornerstone of SEGA’s business strategy.  It will be integrated into content discussions and development across the company’s businesses. SEGA will work to create the best products possible and reach consumers in new ways, striving to maintain a leadership position in the industry by executing on a long-term strategy that will allow it to develop new content and licensing programs.

“For example, we are very excited with the launch of the Sonic Boom TV show this fall, which we believe will be an excellent opportunity for kids to immerse themselves in Sonic’s world of fun and adventure,” Flores says. “We view the debut of the show, along with the launch of the Sonic Boom video games, as an opportunity to bring fans deeper into Sonic’s world and also expand the range of licensed products available at retail.”