

Given that we know the news that SEGA doesn’t have plans on publishing Phantasy Star Online 2 outside of Japan, at least for the Playstation 4 (though the PC and Vita versions have been out for over 3 years, so I assume those aren’t coming either). I stated in my original article that I thought it was a really bad decision and got many people upset while they tried to debate me on the topic even though I never really stated why I felt it was a bad decision. So, here it is, my article talking about why SEGA West not bringing Phantasy Star Online 2 is just another stupid decision by the company that has had a long history of bad decisions.

I decided that it was time I did a write up about why SEGA West not bringing Phantasy Star Online 2 outside of Japan is bad, not only for their in-house IP but also for their overall brand.

Phantasy Star Online is a popular franchise

This is something that I don’t think a lot of people understand, that the Phantasy Star Online franchise does have a sizable following. I would say that the Phantasy Star franchise is one of SEGA’s bigger franchises they have created and still has online appeal. For example, the last Phantasy Star related game to be released in America was Phantasy Star Portable 2. I agree that the game failed at selling copies outside of Japan, but this was true for a lot of PSP games in the west. Lots of people will use these handheld sale numbers and talk about how Phantasy Star Online 2 isn’t worth it for a publisher like SEGA because of the sales of spin-offs on a platform with high piracy rates. But can you name me any other PSP game that sold well after 2010? I mean, I remember seeing NPD numbers in 2006 pinning the PSP as selling 20,000 units a month, now imagine how much it was selling in 2010 when Phantasy Star Portable 2 came out.

The issue here is that Phantasy Star Online, the main title entry was a popular game. It was so popular that it not only got a card game spin-off (that didn’t do so hot), dozens of re-releases and the older versions are still played online via hacked servers. The Phantasy Star franchise hasn’t had a western released game for half a decade, but PSO-World, the top English Phantasy Star Online website still gets a ton of traffic. So much traffic that they are more popular than our site and rival Sonic Retro in terms of traffic (and Sonic Retro is the most popular SEGA/Sonic related fan site on the internet). They managed this without having a new game in half a decade. There is obviously an interested English speaking fanbase.

I think judging a franchise based on the sales of spin-offs is wrong, it would be like canceling all Sonic the Hedgehog console games based on the sales of Sonic Boom: Rise of Lyric. That is a disservice to not only the brand but also the fans that put up with blunders like Phantasy Star Universe. Is the brand more popular than Final Fantasy? Nope and the way its being handled it won’t be known by new generations of western gamers, sadly. Final Fantasy wasn’t always the big mainstream brand that it is today, it took lots of risks and effort to make it what it is today, including marketing. Something that Phantasy Star Online hasn’t really gotten since, well, Phantasy Star Online on Dreamcast.

Phantasy Star Online 2 being Japan only is bad

One of my biggest concerns about the way SEGA is doing business, it seems they aren’t thinking it through in the long term. They are stumbling around making decisions like it was the SEGA Saturn era all over again, trying to benefit each branch while they all fall apart. The facts are there really isn’t a sizable userbase in Japan for a game like Phantasy Star Online 2 on the Playstation 4. I know a few of you will start quoting Sony’s numbers on how they sold over 23 million units. You forget to mention that it sold those units worldwide. According to Media Create the Playstation 4 has sold a underwhelming 1.7 million units in Japan as of August 16th of this year. Think about it. You will need a sizable portion of Playstation 4 owners to download your game and not only that, but also purchase something from the game’s online store to create a sizable revenue stream to pay for not only porting the game to the system but also to upkeeping its servers and other expenses. SEGA is literally telling 20+ million Playstation 4 owners that its not worth bringing this game to them. How is that good for your brand?

But what do you expect? This is the same company that kept the PC version in Japan for over 3 years, when all numbers point to PC gaming being niche in Japan. Right now free-to-play games are thriving in the west and titles like DOTA 2, League of Legends, Team Fortress 2, Warframe, and Path of Exile are all very popular. Last year League of Legends made almost a billion dollars in microtransactions in 2014, which is pretty good considering it was the developer’s first ever game. It is mind boggling that a developer like Riot Games, Inc (developers of League of Legends) who where founded in 2006, went from a indie developer and became a gaming giant who’s single game makes more money than all of SEGA’s consumer division. Who would have thought that listening to fans, putting out constant updates and having a decent free-to-play business model would be profitable?

[Gaming journalist Susan Arendt and James Mielke joined us on our podcast, the Swingin’ Report Show and talked about what Phantasy Star Online mean’t to them]

While I don’t think SEGA’s Phantasy Star Online 2 would be as big as League of Legends, seeing as the whole MOBA hype is at its peak at the moment, I do think it would do well enough. The other issue that SEGA Japan faces is that its trying to bring new players in with a port on the Playstation 4 (which we talked about the low usage base) and a brand new anime with the hopes that it will attract more Japanese players. Why not use that money to bring the game West? Most fans would say that you can play it on the Japanese servers just fine, which is true but there is one issue with that. Westerners playing on the Japanese server is bad for SEGA because most of them don’t spend a dime on the game. Why don’t they? Mostly because buying Arks Cash (the paid currency in Phantasy Star Online 2) is a hassle and one of the biggest ways these free-to-play titles make their money is on convenience. This leads to a ton of Western players just playing for free and these games can’t survive if no one is spending money.

But isn’t localizing a online RPG expensive?

This is one of the biggest comments I have seen around from people defending SEGA’s decision for not bringing Phantasy Star Online 2 to the West. Cost. Its just too expensive not just the localization, but also the servers, paid support staff, network technicians, and so forth. While I’ll agree that this part has always been SEGA’s downfall. Support for Phantasy Star Online wasn’t the best, Phantasy Star Universe had a ton of issues and so on. The problem is that online servers have dramatically gone down in price since in the last ten years. I don’t think its a big request to ask a company that has spent a lot of cash developing Phantasy Star Online 2, to put more money to bring it to 90% of potential players outside of Japan. The issue is SEGA has the money, they just don’t want to use it on bringing Phantasy Star Online 2 to the West.

For example, SEGA Japan is localizing two Korean PC MMOs for the Japanese market (and will release it in Korea too). This is news that most people don’t even know about, but they are bringing Soul Worker and Closures to Japanese audiences, even tho most companies have cited that PC gamers in Japan have been at a consistent decline over the last few years. While I don’t mind these investments, you really got to wonder if they even care about the Phantasy Star Online 2 brand outside of Japan. That’s what I don’t get, the numbers in Japan just don’t add up, yet they continue to invest in core games in that region while the rest of the world is hungry for more games like Phantasy Star Online 2. But isn’t all that SEGA Japan has invested in, they have also invested in localizing Chaos Online, a Chinese created MOBA title. This doesn’t take into account that the MOBA genre is already super saturated. Its so saturated that even Warner Bros’ Infinite Crisis (based on DC comics properties) had to shut down earlier this year. Some might suggest that the game might do well in China, I’m sure it will, but SEGA is only publishing it in Japan (where PC gamers are in a decline, as we know). Sounds like great ways of spending your money, right?

While its true that SEGA Japan has been spending their money localizing online titles for Japan, SEGA West has been spending their money on creating new free-to-play titles. For example Creative Assembly are making Total War: Arena and Total War: Kingdom. While Total War: Arena has been received positively by beta testers, Total War: Kingdom has been universally hated by fans. Yet, SEGA is still wasting their money, servers, and technical teams supporting that title. The game has being played by less than 400 players. Seeing as the game was released on April 9th, 2015, only being a few months old, its only going to go down hill from here for that title. While its true that the game was mean’t to be a mobile title, it still costs money to bring it to PC. Probably more money than localizing Phantasy Star Online 2…

Back in 2011 SEGA bought Three Rings Design and launched Spiral Knights on PC, which was a great move at the time. The issue is that they are still supporting the game even though its peak players have dropped dramatically after its initial launch. I’m all for supporting smaller online titles with great servers, tech support and all that jazz; but it makes me wonder why they refuse to bring over Phantasy Star Online 2 that I know would do better than the utter failure that is Total War: Kingdom and get more attention than Spiral Knights has been getting lately.

SEGA has no trust in its in-house brands outside of Japan

[Well, not counting Sonic the Hedgehog]

This is really the truth, SEGA thinks that no one cares about their in-house brands (not counting Sonic the Hedgehog) outside of Japan. While some might be quick to defend and say otherwise, SEGA has proven in the last couple of years that they don’t think their in-house brands are worth bringing over. For example they passed on publishing and funding duties for Bayonetta 2 to Nintendo, instead of bringing the game to Playstation 4 and Xbox One, capitalizing on the audience they started building last generation.

It doesn’t end there, Yakuza 5 came out in Japan in 2012 and ever since its released SEGA fans have been asking SEGA for a localization. Fansites like Yakuza Fan really took up the mantle on gathering the fanbase and asking SEGA nicely for a new game. During the time I would talk to people that worked at SEGA and according to them the franchise was looked down upon as a failure with a niche fanbase that ‘whined too much’. This is now what SEGA fans have become to SEGA America, fans that ‘whine too much’ for localization of big Japanese titles. I mean its one thing to ask for a brand new game to be made from the ground up, I understand that frustration, but to call fans that just want a localized titles as ‘whiny’ basically sums up why SEGA America is a huge failure in the eyes of many SEGA fans.

The only reason that Yakuza 5 is coming isn’t because SEGA had a change of heart, but because fans gave up on asking SEGA and starting asking Sony’s Third Party Program team. That’s right, Sony has a program to bring fan requested titles to Playstation platforms and one of the first games on their list happen to be Yakuza 5. It’s a really weird world when Sony sees the demand, yet SEGA seems a bit blind to it. This is the same team that help Yu Suzuki and Ys Net get on Sony’s E3 2015 stage and announce Shenmue 3 Kickstarter. While this would have been a opportunity for SEGA to hit their social media and tell fans about the Kicktarter, they totally ignored it even tho they have sponsored Kickstarters in the past. At this point, Sony has shown more love for SEGA’s in-house Japanese franchises than SEGA as a whole.

The sad reality is that the Phantasy Star franchise will become just like the Shining franchise, Japan only. Once you stop supporting a main entry in the West, it makes it harder for future titles to be brought over. This isn’t only going to be Phantasy Star Online 2, it will also continue when the game’s sequel and other spin-offs (as we have seen with Phantasy Star Nova). This could very well be the end of the Phantasy Star franchise for Western players unless SEGA has a change of heart. I wonder Haruki Satomi will talk about this decision? I mean, he was quick to react when fan feedback was positive, but what about when its negative? He will most likely brush it off as a whiny fan doing what they do best, whining.

What do you think of the whole situation? Let us know in the comments below!