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SEGA Enters China Market for Online Game Business

SEGA Corp. has announced plans to enter the Chinese market for online gaming. In preparation for full-scale business operations in China, the company has established a branch office in Shanghai -- SEGA (Shanghai) Software Co. SEGA views the Chinese a strategic market for growth in multiplayer online gaming market with more than 10 million online gamers. The company plans to establish the regional business through its local branch offices, with content designed to appeal to market-specific tastes and demand.

SEGA is planning to launch the following PC online games in China: PHANTASY STAR ONLINE BLUE BURST, CTRACER and SHENMUE ONLINE.

SEGA has reached an agreement to provide Zarva Digital Ent. Co., the subsidiary of Zarva Technology Group Co., Ltd -- one of the biggest IT companies in China -- with a license to operative PHANTASY STAR ONLINE BLUE BURST, a fantasy franchise that was originally launched for Dreamcast in 2000. Subsequently, PHANTASY STAR ONLINE games have been released on Nintendo GameCube, Xbox and PC. As of May 2003, more than 600,000 users have signed up to participate in the PHANTASY STAR ONLINE network.

For CTRACER, SEGA will partner with Joyzone Networks Co. to bring the game to China. The Korean beta for CTRACER began in March 2003 and has reached 3.75 million subscribers as of the end of June 2004. The consumer service in Korea is scheduled to launch in autumn 2004. The massively multiplayer online (MMO) racing game was co-developed by SEGA and Hyundai Digital. The title allows up to 5,000 people to simultaneously compete in races. Players connecting in virtual communities can customize their own cars by purchasing items such as performance parts and paint schemes.

For SHENMUE ONLINE, an action role-playing game, SEGA has reached co-development/co-publishing agreement with Koreas JC Entertainment Corp. SEGA also has an agreement with T2 Technology Holdings Inc. to allow T2 technology to handle the Chinese online game operation of SHENMUE ONLINE. The commercial launch will take place in 2005.

SEGA Corp. is a worldwide leader in interactive entertainment both inside and outside the home, encompassing consumer business, amusement machine sales and amusement center operations. The company develops, publishes and distributes interactive entertainment software products for a variety of hardware platforms including PC, wireless devices and those manufactured by Nintendo, Microsoft and Sony Computer Ent. Inc. For more information, visit http://sega.jp.

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