Mike Hayes on life after Sega
These days, former Sega CEO Mike Hayes is the non-executive director at Caperfly and a mentor on Nesta’s Creative Business Mentor Network, which pairs him up with a creative business which he mentors through a combination of workshops and one-to-one sessions. Mike is also executive chairman of Serious Games International and board trustee of the Birmingham Hippodrome. Here, he reflects on his 23-year career in videogames, from his early success with the UK distributor for Nintendo, to his time at Codemasters and Sega – and why the lessons learned in videogaming's first golden age are relevant once again as he prepares for his new life as a mentor to creative businesses.
My first introduction to videogaming was in 1989, and my 23 years in the business means I’ve seen first-hand some significant changes in the industry. I'm in a position now where I can share what I have mastered along the way, both here and as a business mentor for the next generation of creative businesses – gaming or otherwise – through Nesta’s mentoring programme.
Back in 1980, the company I was working for, San Serif, picked up the rights to this relatively unknown quantity called Nintendo. Serif at the time were riding on the success of Trivial Pursuit and Pictionary, two games that it held the manufacturing and marketing rights to from 1985 in all territories except the US and Canada. I joined the company in 1986 and helped make the two products great successes across Europe – interestingly our key message at the time was that videogaming was only a flash in the pan, and what was more important was folk getting around a table playing board games and socialising. That worked to a point as we sold millions of games, won the Queen's Award for exports, and generated lots of cash. So much cash that we could afford to take on Nintendo's UK distribution rights.
Nintendo at the time was a failing brand, treated as a toy by Mattel and never really securing the phenomenal success that it had enjoyed in Japan and North America. Dusty boxes of the NES Deluxe Edition would languish on the shelves of the only major stockist, Boots the chemist – which is quite hard to believe in hindsight. What I learned from an early stage however was that while a good product would sell regardless, a good product marketed excellently would sell brilliantly. Lady Fortune was around at the time in the shape of the Teenage Mutant Hero Turtles (the word Ninja was banned in the UK). Against Nintendo of America’s wishes we bundled the Nintendo Entertainment System with Konami’s TNHT and created the Mutant Machine. Sales soared 2,000 per cent in the Christmas of 1990 and Nintendo was established successfully in the UK market. We overtook the Master System as the number one console, then launched Game Boy (on a budget of no more than £200,000) and dominated the handheld sector, seeing off the Atari Lynx and Sega's Game Gear.
SNES launched in April 1992 but we thought that being on shelves a year after Sega’s Mega Drive launched would be a hard marketing challenge, and it was. However, great titles were produced and proved to be extremely popular. Among them was Super Street Fighter II from Capcom which we sold at an incredible retail price of £64.99! Consider that development costs were a fraction of today’s behemoths – no wonder Nintendo was the golden chalice.
Being part of the industry and watching it change has been fascinating, but especially in the last three years where we have seen seismic change – both in the way consumers play and buy their games and the way developers and publishers have to go to market. Ironically the world of development has gone full circle where small, innovative teams or individuals can design and release games of their own. I worked with the Darling brothers for many years at Codemasters and that same level of smart innovation has been re-born in the modern age of smartphones, tablets and browser games. I would argue that large publishers and traditional console platform holders – Sega included – drove the market to expensive development and a focus on sequels that took a lot of innovation out of the market. New platforms have emancipated the developer and designer to create new and exciting games, in a way similar to the late '80s and '90s.
Now that we have this freedom to become super-creative in an affordable way it has never been more important to ensure that the business surrounding the game is as effective and professional as it can be. I am neither a designer nor developer by trade, nor am I an entrepreneur; I am a marketer and a salesman. I am in awe of the clever folk that make our entertainment, but what I have done through my career is take great products and make them successful, if not famous, by appropriate marketing, selling and strong business management. I’ve worked with games such as Trivial Pursuit and Pictionary; the NES, Gameboy, and SNES; Codemasters titles like Colin McRae Rally, TOCA, Operation Flashpoint and, at Sega, games including Football Manager and Mario & Sonic. In each case we started small and grew. We were always honest about quality – you can’t polish a turd, after all – and tried to create the best possible commercial environment for games to succeed. Basic professional business principles were applied with relevant marketing that always put the consumer first.
As the new and established game markets become ever more crowded and competitive with limited platform gatekeepers, strong business management and innovative marketing is now critical. I know that this applies across the spectrum in the creative industry and that is why I was so excited to be invited to join Nesta’s Creative Business Mentor Network, so that I can work with growing creative businesses which have their own business challenges to tackle. Through the programme I will be matched with a creative business and work with them over the next year. These programmes are important because they provide creative companies with a rare opportunity for one-to-one mentoring. I hope to bring practical advice to overcoming the challenges of running a creative business.
Through my work life I have helped smart, creative entrepreneurs sell their dream which has been a privilege, and I want to share what I have learnt with new up and coming stars of the future. There is no doubt that Britain is one of the most creative countries on the planet, but I’m not sure we can always say this about the business that surrounds such creativity. One only has to count the number of UK-owned developers and publishers that remain in the videogame business. Nonetheless, Britain is an engine room for creativity, and through mentoring I hope I can assist in helping new businesses succeed – and maybe I'll find the next Nintendo while I'm at it.
Nesta’s Creative Business Mentor Network programme is open for applications until 13 September 2012. Apply at www.nesta.org.uk/cbmn.