Jeff McCarthy

Vice-president and general manager, Sega of CanadaJeff McCarthy, vice-president and general manager, Sega of Canada, has had more than 20 years' experience in retail and product development, and extensive trading experience in the Pacific Rim.Before joining Sega, McCarthy was president of...

Vice-president and

general manager,

Sega of Canada

Jeff McCarthy, vice-president and general manager, Sega of Canada, has had more than 20 years’ experience in retail and product development, and extensive trading experience in the Pacific Rim.

Before joining Sega, McCarthy was president of the Charan Toy Division of Charan Industries.

While there, he launched the Batman figurine series. Before joining Charan Toy, McCarthy was vice-president of marketing at Midway Industries, gathering wide trade experience with China.

Q. The market for your business seems split about 70/30 Nintendo-Sega. Are there particular reasons for that?

A. I think the split at the end of 1992 was probably 80/20 for Nintendo.

I think the reason was that Sega as a product was not promoted, and it didn’t carry the distribution that it had in the past. That’s one of the reasons why there’s a Sega of Canada which started on Feb. 1.

Our goals this year are to get to about 65/35, again in Nintendo’s favor, and in our key area, which is 16-bit, which is the only area we really compete on, we’ll get pretty close to 50/50.

Q. Has your parent company given you the green light to push sales of your products, or to pursue market share, or both?

A. Our first thing is awareness. We’ve increased the advertising budgets 10 times from where they were last year. The mandate that we have from Sega of America, which is our parent company, is to gain as much market share as we can as quickly as we can.

We’ve got better awareness, 10 times the advertising, better presence, which means we’re investing in the millions at retail, the fixturing, and so on and so forth; and the key thing to us is what we call execution: having things on time, delivering them on time.

Q. Looking over the Sega material, it seems the company has focussed on children who are a little older. Is that the case?

A. Traditionally, our skew has been 12-18. And in Canada, from an advertising point of view, we’ve addressed two to 11. So for the first time this year we are addressing the 12-18 marketplace. Our product is a little more advanced, our graphics are a little bit better, the games are a little bit faster. And our game players skew a little bit older than Nintendo’s.

Q. Most of your sales come around Christmas. Is there any way around the seasonal nature of your business?

A. X-Men, in March, [was] a very big title. You can build volume in any month of the year if you have good product and you advertise it well.

Another good example is, we have something called the Sportspack, which is a hardware item that we ran in June. And the sales of that item were equal to the total sales of Game Gear for the last two years. If you promote, you can skew away from the fall.

Q. Once a year or once a summer a blockbuster movie comes along. Might a tie-in be an option for you?

A. I think, strategically, it is something we try to do. We would like to have a major software hit every quarter. It doesn’t have to be tied to a movie.

Q. Sega gets all sorts of pitches for promotional tie-ins. Can you mention some of the better examples?

A. We’re doing something right now with Procter & Gamble. There’ll be a fourth-quarter Post cereals promotion. We have done something with Effem Foods. We have a major soft drink under consideration.

We have a major fast food [tie-in] – it starts with an M but I’m not at liberty to say [what it is.]

The activity is quite substantial, and we’ve had everything across the board from Whiskas cat food to Mercedes-Benz automobiles.

Q. Is there a chance any of your video games could be set in actual places that real children relate to rather than being set in Jurassic Park or some other fantasy land?

A. That’s an interesting thought. Role games are not, unfortunately, a big part of our marketplace. A lot of it is fantasy. There are sports games, which is not so much fantasy. But an actual situation, I don’t know. It’s possible. I hadn’t thought about that.

Q. What are the technological trends, and how are you exploiting them?

A. If we look at the situation right now, the cornerstone of our technology is our 16-bit machine. We add to that some pretty exciting pieces of hardware – the cd-rom which allows live-action video.

We can add to it a virtual reality helmet or visor, which will be introduced within our fiscal year, and which will be a $200-$250 peripheral where you have a complete environment: stereo sound, full eye involvement, pretty impressive.

You can add an activator, which is a full motion control pad. The activator will be here this fall, V[irtual] R[eality] will be here this fall, 16-bit is here now, cd-rom is here now.

There are holograms, more virtual reality accessories and set-ups. We believe the keys to our business are games. We must have good games, quality games that our players want to use.

Second, we have to innovate from a hardware point of view. Sixteen-bit will mature, and we must strategically plan when we introduce the next level.

Q. Moving on the ratings system for games Sega introduced. Is that going to help your marketing at all, perhaps in a way it was never intended?

A. As we talked about earlier, the skew of our players is a little older. We have to be careful that we inform our customers as to the content of the product we’re presenting to them. I believe quite strongly there has to be some onus remaining in the family, that you use some discretion.

The other thing we are considering is a 1-800 line that the parents can call and say, ‘Look, Johnny wants Sonic the Hedgehog. He’s seven years old. Is that appropriate?’