Sega cuts spark walk-out

Top European marketing executives storm out as games giant merges Euro operations and axes staff

Three of Sega Europe’s key marketing directors have walked out following the video games company’s decision to axe staff and merge its European and UK management.

Alan Sharam, UK managing dir-ector, and European marketing and product director Barry Jafrato, left Sega’s Chiswick office last Friday following the announcement to staff.

UK marketing director Noel Dardis left this week and is under-stood to have lined up another job.

More walk-outs are expected, and it is thought the redundancies might total as many as 50 – almost half the 124-strong staff based at Sega Europe.

However, the precise number of staff who will lose their jobs won’t be decided until Friday next week, while some personnel will be absorbed into the Sega Amusements division.

Andrew Mee, marketing manager of the latest Sega game Saturn, will take over as head of marketing for both European and UK operations.

Mee says the marketing dep-artment will be restructured once it is clear how many staff will lose their jobs and the 25m European advertising budget with McCann-Erickson will also be reviewed.

Sega’s decision to merge its departments did not indicate any plans to drop product lines or delegate responsibilities to Japan, says Mee.

But there may now be closer links between the European and US marketing departments, he adds.

The announcement follows a steady downturn in the UK video games market since 1992 when the market peaked, at more than 500m. In 1995 estimates put the market value at 250m.

“The changes are unavoidable due to market situations. Consumers now demand a much higher quality game, so we have to change,” says Mee.

Sega’s merger follows rival games giant Nintendo’s decision last August to close its Fareham and Eastleigh offices and relocate to London – leaving dozens of staff without jobs.

Sales, marketing and distribution for Nintendo are now being co-ordin-ated by John Menzies subsidiary Total Home Entertainment.

Malcolm Miller, Sega Europe chief executive, remains as head of UK and Europe. He is adamant Sega has been the leading video games company in the UK during the Nineties and will maintain its position.

Recent Gallup figures for 1995 show Electronic Arts and Virgin lead the UK games market with a 13.1 per cent and 12.3 per cent value share respectively. Sega, at 9.7 per cent, is just ahead of Nintendo on 7.3 per cent.

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