Namco calls for Sega decision

In a public statement, Namco points out that “half a month has elapsed since we put forward the merger proposal in mid-April… We have concluded that we should confirm the other’s intention in order to establish the stability of the two companies’ business conditions.”

However, Japanese newspaper Asahi Shimbun is reporting that Sammy, which had previously announced plans to complete a merger with Sega in October of this year, is furious that Sega is considering Namco’s offer, as its merger bid was seen as a done deal.

“[Sega] has betrayed and embarrassed us,” a senior executive at Sammy is quoted as saying. “We don’t really care [if the deal goes through] any more.”

The deal between Sega and Sammy was brokered by CSK, an information services company which is a major shareholder in Sega. Sega and Sammy had been seen as closely related companies in the past, thanks to the friendship between Sammy president Hajime Satomi and Isao Okawa, the CSK founder and Sega chairman and president, who passed away about two years ago.

It was originally planned that Sega and Sammy would work out details of the merger by the end of March, with an official deal being signed in May. The talks with Namco, not to mention Electronic Arts’ continued interest in establishing a business tie-up with Sega, may not only have delayed this process – they may have caused sufficient bad feeling between the companies as to rule out any further progress on the merger entirely.

For Namco’s part, it is still adamant that its offer is the best hope for Sega’s future. “We have to do something, or Sega will go under,” according to one Namco official. “Namco is Sega’s best partner because we are in the same industry.”

“Sega has apparently come back to the negotiation table after seeing its stocks fall,” another is quoted as saying. “We are serious about this and we wouldn’t even mind Sega acquiring us.”

If Namco and Sega do merge, The Japan Times reports that the combined company would be the largest game software publisher in Japan, with annual sales of 350 billion Yen – well ahead of Konami, whose sales for 2002 were 250 billion Yen.