Hey everyone - Episode 22 of The Speakeasy is now live! In it, SEGA’s EVP and Global Head of Transmedia, Justin Scarpone, unpacks how a games company builds its IP into lasting franchises across film, merchandise, live events and new platforms, and why SEGA is increasingly thinking of itself as an entertainment company with games at its core.
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Snippets from The Speakeasy
SEGA x Netflix
Justin joined the conversation not long after SEGA announced new Netflix projects for Sonic, Crazy Taxi and Stranger Than Heaven. "What we're excited about first and foremost is that it's multiple IP, but also IP that are speaking to different audiences and that are at different stages,” Justin said.
Sonic is the heavyweight champion, so the focus is a persistent content flywheel that keeps expanding the audience. Crazy Taxi is a revival IP: popular 20 years ago and returning with a new game, it has a strong nostalgia base but also an audience that's asking "what's Crazy Taxi?", which is where a bigger platform can help create new touchpoints. And Stranger Than Heaven is brand new, a story that spans five cities and five decades, and is one Justin says you can already picture as a film or series.
What it means when people buying the merchandise aren't the ones playing the game
Like a Dragon (better known as Yakuza in the West) is an IP that has been around for 21 years. Its core game audience is around 70 to 75% male. Its merchandise business is the mirror image, with around 80% of buyers female. Justin explains that this audience found the franchise through live-stream gameplay on Twitch and YouTube, rather than by playing it on console. They follow the story, pick a favourite character, and buy merchandise as a way to express that fandom.
The same pattern showed up when SEGA staged a Like a Dragon play in Tokyo, where he estimates the audience was close to 90% female. The takeaway is that for this segment the entry point to the franchise is merchandise and streaming, and SEGA welcomes that.
It’s why, going back to the point above, expanding the universe through its prequel game Stranger Than Heaven and a Netflix film gives fans who don’t play the game another way to explore the IP and deepen their fandom.
Sonic at 35: from Roblox to Balenciaga to Walmart
Sonic turns 35 this year, and Justin credits a push that began around 2015 (a robust game slate, the Paramount films, Netflix animation, merchandise at Walmart and Target) with kicking off an upward spiral in affinity for the franchise.
Then there's Roblox. "I think it was very important that we as a company decided to go into that platform, because it actually allowed us to tell the stories that then brought [fans] into the franchise in other ways,” he says. He shares the story of his daughter, who had never played a console game but found Sonic on Roblox, then went on to watch all three films.
Justin says the Roblox game hit roughly 40 to 50 million monthly players at its peak, an audience that never grew up with a SEGA Genesis or Dreamcast. That reach now sits alongside a merchandise strategy that runs from Balenciaga to Primark and Walmart.
The high-end collaborations are a halo that speaks to a specific subset of fans, but SEGA is a mass brand, and if it isn't accessible to core fans on value for money, it risks excluding part of its fanbase. Consumers, Justin says, are savvier than we give them credit for, as long as there are different options available.
In this way, a Balenciaga or McLaren partnership is just as natural a fit for Sonic as Primark.
The first step in a transmedia strategy
Justin gets asked a lot for advice by creators who want a transmedia strategy, and his answer is simple: “make the first thing you're working on a big hit” because without that there's no transmedia business.
Assuming you already have one, whether that's a game or a film, his advice is to hire someone who has done it before, from the Hollywood studios or companies like Sanrio, Pokémon or Nintendo, who can put together a five-year roadmap and, more importantly, build a network of partners.
The early mistake creative organisations make, he says, is assuming that because they know the IP best, they know what's best in every format and product. Making a great game is not the same as building a consumer products business, and fans expect more than a character stuck on a T-shirt.
Justin's other advice is to be realistic about timelines, not to spread yourself too thin before the core is working, and to partner where you lack expertise.
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