Sega's Competitive Counter-Attacking
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Holmes Report

Sega's Competitive Counter-Attacking

Access Communications set out to change the thinking of media and analysts through education, and to reinforce Sega’s corporate identity as an irreverent and strong player in the videogame industry.

Paul Holmes


Sega of America is the American arm of Tokyo-based Sega Corporation.  Sega of America is responsible for the development, marketing and distribution of Sega console systems and games in the Americas.  In September 1999, Sega launched the first “next generation” console gaming system, offering the first vehicle for online console gaming in the industry.  Dreamcast had a “modem in the box,” meaning that to connect to the Internet, players could simply plug one end of a phone cord into the back of the Dreamcast and the other into a phone jack.  The Dreamcast launch was deemed the most successful consumer product launch in history, generating $97 million in sales in the first 24 hours.  The Dreamcast was a solid system, faster than the others available and with better games, and it catered to demand with its online play capabilities.  Many media and analysts considered Dreamcast the hot new gadget for holiday 1999.  

In terms of market share, Sega is #3 behind Sony and Nintendo, and going into 2000, Sega had about 10 percent of sales.  Sega was the true underdog in the industry, with nowhere to go but up and an irreverent attitude towards game development, marketing and business.  

Based on Sega’s past failed systems and very poor financials out of parent company Sega Corporation, those same media and analysts who thought Dreamcast was a great gift also predicted that it wouldn’t live to see holiday 2000.  At the same time, all of Sega’s competitors announced that they would launch similar console gaming systems.  Specifically Sony announced and started hyping its PlayStation2, which would hit retail shelves in October 2000.  Sony had a huge marketing budget and press and analysts were listening, reporting that the PS2 would have a modem included and better games, which it wouldn’t.  Through a multifaceted media relations campaign which utilized postcard mailings, events, an innovative media kit, media tours and aggressive media relations, Access Communications set out to change the thinking of media and analysts through education, and to reinforce Sega’s corporate identity as an irreverent and strong player in the videogame industry.  With the strength of Sony’s marketing muscle pulling us back, Access Communications proved to move the needle in terms of media and analysts’ thinking, which makes Access Communications’ “Competitive Counter Attack” program worthy of a 2001 SABRE Award.


Access was lucky in that time was on our side.  Sony’s PS2 wouldn’t ship until October, so we had plenty of time to educate the media and analysts about the advantages of Sega’s Dreamcast.  Previews of PS2’s games weren’t well received in the media, while Sega would have an impressive line-up of 200 games by holiday 2000.  Further, side-by-side comparisons of the same games on the two systems showed no real difference in graphics.  In fact, many observers said that the Dreamcast’s graphics were better!  Additionally, mid-year, Sony announced the PS2’s steep price point of $300, making Sega’s Dreamcast half the cost.  Finally, Sony would experience massive shipping problems at launch, allowing us to tout the fact that Dreamcast was available, in addition to being half the price with great games and online play capabilities.  


In preparation, Access Communications did some research to gauge the temperature of media and analyst opinions.  First, we conducted a media coverage assessment in which we analyzed Dreamcast launch and holiday 1999 stories in publications with circulations over 100,000.  Concurrently, we conducted an informal media audit, asking select gaming, business and consumer media a handful of questions comparing Sega to Sony and their respective systems.  Results told us that while participants were positive toward the Dreamcast system, they were skeptical about its viability and confused on the differences between the two systems.  This is where Access focused the bulk of its efforts for the program.  


Program objectives focused on maintaining Sega’s strong brand image in the face of what was predicted to be Sony’s year.  Access Communications wanted to position Sega as an irreverent, major market player with a strong industry presence, and to increase awareness of the Dreamcast hardware and its benefits over the PS2.  Finally, we ultimately wanted to contribute to increased sales of the Dreamcast hardware and games.


Our “Competitive Counter Attack” program was more about staying afloat in the Sony seas than getting stacks of our own clips.  We wanted to be included in at least 75 percent of PS2 launch and holiday stories, with at least two of our main messages played out in 80 percent of those articles featuring Dreamcast.  Finally, we aimed to secure at least five pro-Sega analyst quotes in PS2 launch or holiday stories.


To achieve our objectives, we wanted to capitalize on PS2’s weaknesses as means to educate our target audiences on Dreamcast’s strengths; to utilize executive visibility opportunities to reinforce key messages; and to leverage industry events as opportunities to educate audiences on Dreamcast’s features and on Sega overall.


Identifying the Audience: Based on our research findings that media and analyst were confused on the differences between Dreamcast and PS2, we determined our primary audience for the competitive counter attack program would consist of consumer media (New York Times, Chicago Tribune, LA Times), business media (US News and World Report, Time, Red Herring), and select gaming media (Next Generation, CNET). By educating these media about Dreamcast’s features and viability, we felt our messages would be communicated effectively to our secondary audience; consumers, videogame retailers and 3rd party publishers. This is where Access focused the bulk of its efforts for the program.

Developing Key Messages: Access developed a set of key messages to communicate to our target audiences through our efforts. These being: Sega is an irreverent videogame company with a strong future; Dreamcast is the only next generation console with a built-in modem; Dreamcast has the best games for any next generation system; Dreamcast is half the price of the PS2; and Dreamcast is easier to find and buy for holiday 2000 than PS2.

Tactics: As is the nature of the videogame industry, our program tactics focused on friendly rivalry and the spirit of competition – pointing out the competition’s weaknesses to win the game.  We distributed two separate postcards to media and analysts to call attention to the fact that the PS2 would ship without a modem (see examples in packet).  In addition, at the Electronic Entertainment Expo (E3), the videogame industry’s largest tradeshow, Access hosted a Sega barbecue across the street from the PS2 press conference.  With a live remote radio broadcast, food and giveaways, we lured media entering/exiting the press conference to come over and experience the “Sega way” at its best.  The goal was not coverage, rather, to reinforce in media’s mind that Sega is a bold, major player in the industry.  

In addition, we created a competitive press kit highlighting differences between the two systems that we distributed to more than 500 media and analysts.  The kit included a sheet with system stats on both the Dreamcast and the PS2; a fact and fiction document calling attention to frequently confused PS2 information; and copies of pro-Sega stories.  We also distributed the kit during a 10-city media and analyst tour where we showed PS2 and Dreamcast versions of the same game and offered interviews with Sega executives.  

Finally, Access conducted massive media relations on behalf of Sega for this program.  When Sony announced its shipping shortages, we offered Sega executives for immediate comment.  We conducted heavy media outreach around the holiday season, driving home the message that Dreamcast was available, and was a comparable system at half the price.  


We exceeded our measurable objectives for the “Competitive Counter Attack” program, garnering Dreamcast mentions in 90 percent of PS2 stories, with at least two Dreamcast messages included in each mention.  Finally, we secured not the targeted five, but 10 pro-Sega analyst quotes in PS2 stories.  
Overall, Access Communications was able to keep Sega’s image in tact with media and analysts in a year that was predicted to be Sony’s.  We ensured that coverage was correct when comparing the Dreamcast and PS2 systems.  We successfully chipped away at negative sentiment and rounded out the year with strong, positive Sega coverage and analyst quotes, influencing perception and ultimately contributing to consumer purchase decisions.  At the end of the year, Sega’s market share was up from 10 to 18 percent.  Sega Dreamcast's average weekly unit sales volume soared 156.5 percent between July 23 and September 30, 2000, positioning Sega ahead of Nintendo into second place behind Sony based on revenue: this all happing on the eve of holiday 2000.

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