Japanese-headquartered Sonic The Hedgehog creator Sega has long been an innovative and compelling creator of games -- ahead of its time for much of its history.

Its transition from a hardware manufacturer (Game Gear, Genesis, Dreamcast) to a pure game publisher, however, has been a work in progress - particularly in terms of building up a robust western division with its own product slate.

But in the past couple of years, the company has improved its status -- to the point where the company is the sixth biggest publisher in the U.S., according to recent statistics. And the suitability of games for the Western market has also increased, thanks to studio acquisitions including San Francisco-based Secret Level and the UK-based The Creative Assembly.

But where to now? Gamasutra had a chance to sit down with the CEO of Sega Of America, Simon Jeffery, who has been instrumental in changing Sega's fortunes in the west.

Topics included the transformation of the company's global development efforts, its acquisition of studios, and the importance of big-name talent (and the Sonic franchise) to its longevity and success -- and more.

The Transformation

My interpretation of Sega of America right now is that it's becoming something of a different company from Sega of Japan. I don't know if that's accurate, but if it is, how did this semi-autonomy come about?

Simon Jeffery: It was by design, very much so. I think we've strongly tried to make Sega of America feel like it's not a Japanese company. We want to resonate better with gamers in the casual market than I think Japanese companies have traditionally been able to do in the west for a few years.

The output from Japan (in general) right now seems to be geared around a small number of huge games which really resonate with the western market, but most Japanese content just does not anymore. So that's a pretty big change from five or six years ago, and it's a big change from last generation.

We're trying to make sure we don't make the mistake of being another Japanese company trying to be another Japanese company in the west. We want to build our success through building products for the west in the west, so there are not many Japanese staff in our office at Sega of America. We have a lot of autonomy now, and it's absolutely by design.

This seemed to be an initiative that coincided somewhat with your arrival. Was this an initiative you spearheaded?

SJ: It was part of the initiative by Sega in Japan. They were making a conscious decision to have the western operations have a western management team in place. They brought me in to set up a new management team and build it out to start building western content.

What were the major points you were trying to address when setting this plan in motion?

SJ: Taking that moment in time, it was a good time to do this. Sega had been going through sort of a control-alt-delete, and starting fresh with a start-up mentality. We were on the cusp of the next generation, and on the cusp of Nintendo changing into a different company and opening up a new part of the market. So it felt like the time was right for Sega to reinvent itself.

Really what I tried to do was ride that train and make the most of that point in time, bringing new people into the company and start building the kind of products that would get a leadership position in the next generation on the Wii and the DS, rather than just playing catch-up with everybody else, which is what we've traditionally done.

Well, that's a little harsh on Sega. (laughter) But anyway, starting with the Sega Gamers Day two years ago was when I was really struck by a different feeling that was coming from the company with things like Condemned 2. They were games that felt very iconic -- not very traditional Sega, but it felt like the company was building toward a new, "This is the kind of entertainment you can expect from us."

SJ: I would say that's a great observation, and thank you for that. It makes me feel good, because that's absolutely what we set out to achieve. I think that our ability to be successful is really down to being different from the big players. So much product these days is safe and formulaic, and therefore not particularly creative or interesting.

Sega's never really been the company to do that, so we've really tried to not seem like a mini-EA or a mini-Activision or anything like that. Games like Condemned, whilst not being traditionally Sega, we want them to feel like Sega, as part of the new look company.

Sega/Monolith Productions' Condemned 2: Bloodshot

The feeling I was getting was that while the Sega I grew up with is more or less gone, the Sega that is forming now is perhaps still a company one can rely on to bring a certain level of content. So it may not be the Sega that I knew, but it's a Sega that can be relied on, maybe?

SJ: That's absolutely where we're trying to get to. It's a struggle, and we're doing quite a lot. One of our big focuses right now is to improve the quality of the games going forward.

We really feel that we've gone through massive growth in the last few years, and we're bringing a lot of product to market. We've got fairly mixed results. Some of the product we're really happy with, and some of it not so much, but a year from now, we want to be happy with everything that comes out.

Do you see the handheld market as an opportunity for Sega to exploit further?

SJ: Very much so, and if you include the iPhone, even moreso. We've been pretty successful on the DS, and we're kind of shocked to hear that Iron Man is the biggest-selling game on the PSP so far this year.

With the recent success of the PSP in Japan, and it seems to be taking off in the U.S., we're going to look at that. The DS is a perfect machine for the Sega customers. Sonic Chronicles is something we're very excited about. We think it's going to be a very cool game, and we want to continue to do stuff like that.