Following on from Friday's discussion, MCV talks to Darren Macbeth, former MD of Sega Australia, about Five Star Games' structure.
Do you have plans to take on distribution beyond just Sega, now that you have the freedom?
Yeah, there’s the freedom to do that, and the talks I’ve had with Sega, they’ve been encouraging us to look at other avenues, which is great. They’re not expecting that we have to keep things exclusive, and I think that makes sense.
The research I’ve got says that there’s about $120-130 million in retail sales done through distributors without Sega’s business. There’s obviously people already out there doing it at the moment – people doing a good job – but, there are opportunities where there are sales like that. It’s just really good to start with having Sega as that cornerstone of the business.
So how many people are being brought over to Five Star Games from Sega?
There’ll be four of us, and three who won’t be there, from the seven staff who were at Sega.
Can we expect any new faces?
Just the four of us to start with. If I get the opportunity to look at hiring other staff members, I’ll try to. At the moment, you’ve kind of got to do a lot of things yourself, then work out what needs to happen after that.
So what is the new employee lineup for Five Star then?
So I’ll be doing all the sales side of it as well, so because we’ve got a limited range of titles, that’s where it’s going to be. We’re going to give it a try, see where everything else fits into place and how we grow it, but I’m happy to have Sega as that cornerstone.
So we consolidate that, do great back-catalogue sales (Sonic sells a lot), get all of that right, then hit the new releases.
It’s a great business, so if we continue to do that, do everything for retail and consumers, the marketing side of it continues and we’re able to spend money and do things, it should hopefully be business as usual.
We’re moving out to a small serviced office in Darling Park, where we’ll be setting everything up.
I’m looking forward to it. It’s scary, it’s exciting, it’s good fun (hopefully). Sega have been very supportive of the whole thing. They’ve been pretty good to all the staff as well – they’ve tried to the best thing they can by everyone. Some companies don’t, but Sega have done quite well by everyone.
And how did this venture first get broached between yourself and Sega?
When Sega first started talking about moving out of the market (on the distribution side of the business), they floated the idea of whether I’d be interested in doing it.
They were happy with what was going on across the European distribution side of things. It’s just a change of business.
They’ve decided to focus on four key IPs. It’s going to be Aliens, Sonic, Football Manager and Total War, and a focus on digital. When they got together, the question was ‘Can we maintain the full distribution business?’
We looked at it – we looked at a range of things and said ‘You know what, it’s not going to make sense'. We either have to cut the offices dramatically to bring the costs down to what the new business model looks like, or we close the offices and outsource the distribution side of it.
Are there any other territories which have ‘closed’ their Sega office only to re-open with a new title?
The Benelux office as well, which is based out of Amsterdam, which has The Netherlands, Belgium and the Luxembourg market.
And why these two territories?
I think it’s luck, because we’re of a size where we can do that ourselves. It would've been really hard for the larger territories (France and Germany) because the markets are so much bigger.
I’m glad they offered it to us because it keeps the continuity, which is the main thing.
The people in the business here have been dealing with me for the last five years, they’ll still have been dealing with a few of the staff that are coming on board. The business name has changed, but it’s still the same people and faces moving forward.
Thank you for your time!
Employees not making the jump from Sega to Five Star are the Sales Director, Financial Controller and PR Manager.
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