Sega Struggles to Keep Up in the Live-Service Game Race

Sega’s CEO admits the company is falling behind in one of gaming’s most profitable battlegrounds — and fixing that won’t be easy.

In a rare moment of candor, Sega President and CEO of America and Europe Shuji Utsumi has opened up about the company’s difficulties in the live-service gaming market. Despite Sega’s rich legacy and fan-favorite franchises, it’s clear the publisher is struggling to break into the increasingly crowded and lucrative space where players—and dollars—are sticking around.

“One of the Biggest Challenges”: Sega’s GaaS Weakness Laid Bare

Live-service games eat up hours of playtime globally. From Fortnite to Genshin Impact, these titles dominate Twitch streams, YouTube videos, and app stores. Sega? Not really in the mix.

Utsumi, speaking with The Game Business, didn’t sugarcoat things. “One of the biggest challenges is the GaaS [Games as a Service] business for us,” he said. And for a company that brought Sonic to life, that’s a sobering admission.

“We are still working on making the GaaS business global,” he added, highlighting that while traditional console and PC sales remain solid, they’re simply not enough in today’s market. Live-service games, with their potential for years of engagement and monetization, are the gold mine Sega hasn’t cracked.

Rovio: Sega’s $775 Million Bet on Mobile Momentum

Last year, Sega spent $775 million buying Rovio, the company behind Angry Birds. That’s a lot of bird-flinging, but more importantly, it was a move to gain deeper access into the mobile market—especially in regions outside Japan and North America.

And Utsumi says the plan is already in motion.

“They have deep knowledge of the global mobile business and very strong IP like Angry Birds,” he said. But it’s not just Angry Birds that matters now. It’s Sonic. Sega is letting Rovio experiment with its crown jewel.

Here’s what that means for Sega:

• Rovio has access to Sega’s biggest IPs, including Sonic.

• They’re working together on new mobile-first live-service titles.

• Sonic Rumble, a multiplayer party game, is the first result—though it already saw a delay.

This collaboration could be the make-or-break move for Sega’s mobile push. The company needs more than nostalgia and mascots. It needs engagement, and lots of it.

Hyenas, Super Game, and a String of Missed Shots

Sega tried before. Remember Hyenas? Probably not. The looter shooter from Creative Assembly was supposed to be Sega’s live-service splash into Western markets. It got cancelled in 2023. Why? “Lower profitability of the European region,” Sega said bluntly.

That wasn’t the only ambitious move.

In 2022, Sega teased something called a “Super Game.” A vague concept, sure, but the goal was massive: build a global, genre-defying game with millions of players and creators interacting, modding, and streaming.

So far? Nothing concrete. Just ideas.

To be fair, the vision wasn’t small. Sega’s strategy report explained it like this:

Emerging Markets Could Be Sega’s Unexpected Advantage

Utsumi dropped an interesting tidbit that might’ve slipped past casual readers. When talking about Sega’s global ambitions, he pointed to emerging markets—places like the Middle East and Africa—as “opportunities for growth,” especially through mobile.

That’s not a random comment.

Smartphone gaming is exploding in regions where console gaming never took hold. In Nigeria, for example, mobile games saw a 21% increase in downloads year-over-year in 2023. The same’s true in Saudi Arabia, where gaming is a national investment focus.

If Sega plays its cards right, it might find loyal fans in places its competitors overlooked.

Persona, Gacha, and the Next Best Hope?

Atlus and Sega just released Persona 5: The Phantom X, a free-to-play gacha game based on the hit RPG series. It’s available on PC and mobile, and while it hasn’t made headlines globally yet, it’s gaining traction in China.

Can it succeed where others stumbled?

Well, gacha games can be massive revenue engines. Just ask Honkai: Star Rail or Genshin. And Persona is already a beloved brand. If Sega can blend that storytelling magic with addictive live-service loops, it could finally break into the big leagues.

It’s a long shot—but better than no shot.

Sega’s Competitors Aren’t All Smiles Either

To be clear, Sega’s not the only publisher stuck in the mud.

Sony cancelled Concord and several other live-service projects in 2024. EA’s Anthem is a cautionary tale. Even Ubisoft’s much-hyped XDefiant has struggled to gain serious momentum.

Still, others are pushing forward:

• PlayStation remains committed to building a “diverse and resilient” live-service lineup.

• Bungie’s Marathon and Fairgames are on the horizon.

• Epic’s Fortnite continues to evolve with collaborations, events, and creator content.

For Sega, the key now is patience—and maybe a little luck.

The Long Road Ahead: Can Sonic Keep Up?

Sega is facing a tough reality. While it has beloved characters and decades of gaming pedigree, that doesn’t count for much in the GaaS world if players aren’t logging in every day, buying season passes, or tuning into streams.

Utsumi knows it.

“We are giving [Rovio] access to our IPs including Sonic to come up with nice welcoming GaaS titles,” he said.

Whether those titles end up being welcoming or just forgettable will decide how Sega’s next few years play out. For now, it’s playing catch-up—and time is ticking.