Just about everybody and their brother knows Sega is out of the console business. After years of losing money, they are now looking for new ways to make some dough.

Sega intends to enter the animated arena to reduce its reliance on the gaming market and increase its profits. Tetsu Kayama, the president of Sega, said that they would produce animated television programs as part of efforts to diversify its business portfolio and reduce reliance on the volatile game business. Squaresoft made a similar decision with the creation of Square Pictures, which will be releasing their first movie Final Fantasy: The Spirits Within next month.

The videogame market doesn't seem all that volatile to me. Most companies are making pretty good money. Sega had a few failed consoles and never seemed to be able to put together a decent marketing campaign for any of those systems. It makes one wonder if this is another in a string of unwise business decisions or, a step towards making Sega a profitable company. If the shows they produce are anything like the Sonic cartoons that were on a couple years ago, then they need to be severely beaten with a large stick.

Sega said in a statement it would produce a new animated television program using the Animanium technology, an advanced computer graphic technique, through a partnership with the independent Idea Factory. The company also said it would form a consortium with local animated film makers and software developers to establish the new computer graphic technology as an industry standard for animation programming. Sega's Future Entertainment Division, which was recently formed to examine business opportunities in non-game areas, said it would initially target professional application of the new technology, but would aim to expand it to the consumer segment. The division has also developed new equipment using virtual reality technologies which can display virtual pets such as fish on its thin film transistor panel.

Only time will tell if this decision is a good one or another blunder.