Meet the Development Divisions

4th Development Division


Vice Executive Manager Katsutoshi Kioka

Joined in 2000. Senior Executive Manager of the 4th Development Division.
Started as a part-timer in the PC Sales Department, and both produced and developed online PC games afterwards. Transferred to SEGA Networks Co., Ltd. and assumed the role of Senior Executive Manager. Now Executive Officer and the Senior Executive Manager of the 4th Development Division after SEGA Networks's merger with SEGA.

Online Mobile Publishing Division Executive Manager Takehiro Nagase

Joined in 2012. Vice Executive Manager of the 4th Development Division.
Entered SEGA Networks Co., Ltd. as a mid-career hire. Has dedicated his career to mobile game development ever since. After SEGA Networks's merger with SEGA, has been responsible for improving operational services and expansion to overseas markets as the Vice Executive Manager of the 4th Development Division.

Taking SEGA IPs worldwide with mobile gaming—an inside-look at the 4th Development Division's challenges

SEGA has produced a large number of successful games. With its treasure trove of beloved characters, there lies an untapped business opportunity.

It is the mission of the 4th Development Division to draw out the full potential of SEGA's IPs. A cornerstone of their strategy involves developing mobile games that will perform well internationally.

Today, we'll be interviewing Senior Executive Manager Katsutoshi Kioka and Vice Executive Manager Takehiro Nagase about what it means to compete in the global market and hear about their development goals.

From a part-timer to a senior executive manager

First, could you please tell us about your background, Mr. Kioka?


I joined as a part-timer in 2000, and I became a full-time employee after. I initially developed and produced online PC games. In 2013, my duties switched to mobile gaming when I moved into a managerial role at SEGA Networks. After SEGA Networks merged with SEGA, I remained in my role as senior executive manager, taking over the 4th Development Division.

Why was the mobile game division a separate company initially, and what led to the merger?


It was a direct response to the rapidly growing mobile game market. At the time, numerous mobile gaming companies began propping up, providing online social games and other types of entertainment. Recognizing the potential of the emerging market, SEGA joined the mobile game market as well.

However, our processes weren't streamlined enough to keep pace with the rapid changes in the mobile game market. Hence, we decided to form a separate company to expedite our decision-making process.

Unfortunately, as the mobile game market grew, the budget needed to produce one title grew too. Initially, each title could be developed with a budget of 100 million yen. Eventually, we'd require budgets of 500 million and 1 billion yen—it became clear that we needed more resources. Over time, the decision was eventually made to merge back into the main company.

Mr. Nagase, could you tell us about your career as well?


Originally, I was working at a foreign company, and then I made the switch to SEGA in 2012. I was put in charge of developing mobile games, and in recent years, I've focused my efforts on improving the services and overseas reach of the titles that we manage.

Our division's mission is to expand the GaaS model on a global level

Could you tell us about the 4th Development Division's role in the organization?


The 4th Development Division's primary focus is developing mobile games, previously managed by SEGA Networks. Our goal is to use SEGA'S IPs as a way to kickstart our expansion into the global market.

At the 4th Development Division, we stay true to the company's key methodology of rebooting our legendary IPs in a new light. We are tasked with bringing SEGA's timeless classics to the global mobile market with a fresh new perspective.

As the head of the 4th Development Division, what are some of your team's core values?


Within our team, we always emphasize mutual trust and mutual respect. Once upon a time, all it took to create a successful game was a brilliant producer and a small team of exceptional engineers. But times have changed.

Nowadays, titles need bigger budgets, and they need to be developed with the global market in mind. In fact, the GaaS model that SEGA prides itself on has yet to make a dent in the global market share. This is why our team must perform at its best.

It is vital that each team member brings their unique strengths to the table and understands the value of teamwork.

Could you explain what the GaaS model is all about?


GaaS is short for "Games as a Service." Games developed under this model do not need to sell a certain number of copies; they are instead required to update regularly and provide new services to players.

While the term may be new to some, it plays a crucial role in mobile gaming. Mobile games must be updated on a regular basis. If you apply this concept to console games, which need to sell a certain number of units, the addition of a service component would transform it into a GaaS.

When a game follows a GaaS model, does it also change the way that a game is developed?


The development process would call for more of a market-in approach. SEGA's games were developed using a product-out approach—in other words, we made what we wanted to make. Back then, we were able to produce a number of hit titles under the traditional model driven by number of units sold.

However, live-service games are a completely different beast altogether. We need to be more sensitive to changes in the market and update our games according to our customers' needs. For that reason, the importance of market research has grown immensely.

When developing a game, we have to imagine how it'd operate during the initial stages of development. We then look at whether customers would enjoy the game and work from there.

We've had many producers join us that were surprised by the development methodology here.

Strengthening SEGA as an organization to boost our global sales ratio

Could you tell us about some of the difficulties of entering the global market?


Different countries and regions enjoy games in different ways. This is why we need to consider each country's preferences as we expand overseas. For example, gacha, which is a prevalent business model in most mainstream Japanese mobile games, including those that we develop, is outlawed in some parts of the world. There are even countries where the practice of purchasing digital data isn't ingrained in their culture.

Additionally, business models are also impacted by the types of users available. Take Japan for an example. Despite being a relatively small country, Japan tends to have loyal fan bases that are willing to spend large sums of money to support their favorite games. Larger countries, on the other hand, with bigger populations offer us more options, as players can spend less on average and still keep a game afloat.

We need to not only factor in translations but also a business model and gameplay that would tailor to each country.

What advantages does SEGA have when competing on a global level?


First and foremost, we possess very prominent IPs. Our characters have a strong fan base not only in Japan but also globally. Sonic was even recently adapted into a successful live-action film in America.

Another one of our advantages is our proven track record overseas. As a large company with a storied past, we've been able to explore the international market and learn from our mistakes. Our failures fuel our determination to succeed.

What are your goals for expanding globally?


The 4th Development Division aims to increase its current overseas sales ratio by fivefold within the next few years. It'll require a lot of ingenuity, but it's not an unrealistic hurdle by any means.

We actually have a higher portion of users overseas than we do in Japan. Yet we're unable to take full advantage of that market in the same way as we do in Japan. We're already reevaluating our monetization strategies, so we hope to generate more revenue going forward.

Could you tell us what's distinct about your organization?


We have a diverse workforce consisting of people from different nationalities, and are committed to hiring more in the future. We're offering more English language training opportunities, as our company too becomes more global. Of course, even if you don't speak a word of English, you'll still be able to thrive at our company.

Even since our time as SEGA Networks, our 4th Development Division has typically hired mid-career employees. There are many, like myself, who have transferred over to SEGA, bringing with us our own unique sets of skills. We actively seeking new talent to help propel our company forward.

Recruiting motivated individuals that are up for a challenge

What kind of people are you looking to hire?


Anyone who's interested in a global work environment is welcome to apply to us. We're not just looking for individuals who can speak a foreign language, but also those who stay up to date about trends abroad. That kind of knowledge can be put to great use when developing games for the global market.


In addition, we welcome anyone with big aspirations. There are hundreds of game companies out there and many that only work in mobile gaming. While the 4th Development Division primarily focuses on mobile games, we also have opportunities for other projects, including console game development. As such, SEGA would also be a great place for anyone who feels their capabilities limited by their current company.

What kind of people tend to flourish at SEGA?


I find people who are able to bring out the best in their team tend to flourish here. Given SEGA's extensive reach, it's no surprise that we have a significant number of skilled team members. People who are able to collaborate with those around them tend to demonstrate better results than those who work independently.

It's just as important to become an expert in your field that your peers can count on. In that sense, our organization is better suited for team players who excel in specific areas than individuals who can do a bit of everything.

What's the fun part about working at SEGA?


You're given a lot of freedom to challenge yourself. It's a great place to stretch your wings. Even if you happen to make a mistake, no one will reprimand you for it. We have a firm belief that failures are stepping stones to success. I myself have messed up plenty of times, but your failures need not be a stain on your career.

We warmly welcome those who are experienced and wish to grow further. Nagase and I are discovering new things every day, and trying our best to stay ahead of the curve. Many of my colleagues who have worked at other companies often express how much they've learned during their time here at SEGA. If you feel like you've hit a ceiling at your current work, SEGA is a great place to expand those horizons.

Lastly, is there anything you'd like to say to someone interested in joining SEGA?


SEGA has a supportive environment and systems in place to help both fresh graduates and mid-career hires alike. We embrace applicants from diverse backgrounds, so please don't feel shy and apply! There are many companies out there that don't have the resources to thoroughly train or onboard their new staff into the workplace. It isn't uncommon for us to hear of individuals who felt compelled to leave their jobs because they weren't able to make the most of their skill sets. We offer a comprehensive learning platform that can support your professional growth as you go about your day-to-day.

Moreover, unlike smaller start-ups which may be inclined to pivot away from gaming, SEGA has no intention of shifting its focus elsewhere. While our games may change and evolve over time, you won't find us switching into a different industry overnight. If you are passionate about games and want a sense of security, we encourage you to apply here.

* This article contains content from an interview conducted in October 2023.