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Following a reshuffle of Sega's global structure last year, Hayes - former boss of Sega UK - now presides over the entire Western division of the firm, encompassing both Europe and North America.

Of course, there are still bigger publishers - but that's something Hayes is keen to remedy.

And, as the genial, straight-talking exec tells CVG in this first part of our Q&A, the key to this growth will be pleasing hardcore fans like never before...

How would you characterise Sega's line-up for 2010? What's different to preceding years?
The key development over the next 12 months for us will be to build on the success we've seen on Wii and DS, as you'd expect - but our main area of focus will be to increase the market share we have on 360 and PS3. That's absolutely our single-minded goal for this year.

Aliens vs Predator has thundered along in the right direction. The pre-orders were the highest we've ever had for a core Sega game. Bayonetta had excellent reviews and it's gone to plan. The great thing about Bayonetta is that it's a product that sells well in Japan as well as North America, as well as Europe. They're very rare.

Overall, Bayonetta's shipped well over a million units globally. Again, as a great core game, that gives us something to build upon. Going forward, if you look at our 360 and PS3 portfolio, we've announced Vanquish from Platinum Games - a third-person shooter. We're getting ready to grow our share of the PS3 and 360 market.

If you look at Sega in Europe, we're around the fifth or sixth biggest publisher - and a lot of that is driven by Football Manager, Total War and Mario & Sonic, Sonic and Sega IP like House Of The Dead. And we've had a lot of success with DS. But if you look at our market share on 360 and PS3, we're closer to No.8, and we need to bring that up.

Do you think Platinum Games' natural home is on PS3 and 360?
I think so. I guess there's a reference to MadWorld there. Critically it got a lot of acclaim, but commercially it wasn't the success we wanted it to be. Clearly that was a mismatch with the Wii audience - particularly in terms of the amount of cross-ownership between Wii and the other home platforms. If you're going to play a mature-rated game, you're going to get your 360, PC or PS3 out to do so. But you can't knock us for having a go.

We were brave in that area - but the reality is, Platinum Games is such a cutting-edge developer they need the PS3 or 360 to realise what they actually want to do. You saw that with Bayonetta - it was a very high-quality standard. Vanquish will push the envelope even further. Platinum are definitely more at home on those platforms. But we were thrilled when they tried to do a mature thing on Nintendo. House Of the Dead was seen as a more credible IP with the Nintendo audience - maybe even more fun.

We also have a very good next-gen team in Japan, with Yakuza and Nagoshi's team. He has huge success with Yakuza in Japan. The challenge for us is how to take that brand far more seriously [in the West]. That combined with our external relationships with the likes of Rebellion and Gearbox and our internal studios leaves me confident we can move up on PS3 and Xbox 360.

Yakuza's huge news on CVG. There's obviously a massive appetite for it out there...
For our fanbase - and it's really big in the United States in particular - we at Sega are disappointed that we didn't introduce Yakuza 3 earlier to market. That was probably an error on our part.

There was a lot of disappointment from Sega fans that we didn't have that on our release schedule last year. What I would say in our defence is that it has approximately 2.5 million Japanese [language] characters to translate in it. It's a huge translation job. That's about a million English characters.

What are your plans for your classic IP going forward?
It's important that on our old IP that is respected, we need to deliver a good product. And in some instances we have done that - look back at when we re-did Sega Rally. It scored well and was moderately successful commercially. But then with other great franchises like Golden Axe we didn't produce a great game at all.

Going forward, if we're going to look at any existing IP to bring out the locker, we have to make sure we get the quality to a level we now expect. I'm not saying which IP it would be - a Streets Of Rage, a Crazy Taxi, whatever. What we have to do now is build something that is 85 per cent plus [rated]. We can't just get away with PR.

I'm sure a lot of our readers will be pleased to hear you say that...
We've learned that lesson the good way but also the hard way.

Talking of classic Sega IP, we've seen the new Sonic game...
Doesn't it look great?

For a 2D fan - yes, it does. What was the thinking behind its creation? Bizarrely, it's a next-gen, old-school title...
The thing with Sonic you need to understand is that there are different parts of the Sonic family. This is how we're building the whole strategy. In one corner you've got Mario & Sonic franchise, in the next you've got Sonic The Hedgehog. Then you've got the All-Stars - that's pretty much everybody. Then you've got something we haven't seen for a while, which is like Sonic Heroes, multiplay-type game.

Those are the four areas we want to develop. Interestingly, each of those is going to have different audiences. With the Sonic The Hedgehog brand, we have a lot of people who are legacy fans in a way. And that's where the new game came from: Wouldn't you like to play in the style of your old Genesis or Megadrive but in the beauty of re-enhanced high definition? It doesn't mean we won't tap into the All-Star games, or we won't take Sonic in other directions in future.

Why make it episodic rather than a standalone New Super Mario Bros-style release?
Kind of a mixture of reasons. A lot of it is the whole digital entertainment part. We like everybody else are trying to learn how best to deliver entertainment in the future to consumers. This was a relatively low cost part of Sonic. We wanted to see how it was received via that delivery.

For something like Sonic 4, the consumer will often be quite core. They play a lot of multiplayer, a lot of downloads off XBLA and PSN. We're feeling our way if we're perfectly honest, but it seems to make sense.

EA and Activision have established their iterative franchises. What are Sega's - or is your strategy different?
I would struggle to think of any publisher that has a different strategy at the moment. You have to focus on the IP which is your strongest and do as much as you can to prove and enhance that. To answer your question, our big IPs are Football Manager, Total War, Sonic, Mario & Sonic, Virtua Tennis and, now, Aliens. Obviously we have AvP, Gearbox's [Aliens] game and whatever else we may do.

They're not necessarily all annual, but they'll probably [come out] at least one every two years. We're certainly not trying to over-do Sonic - we need to plan that roadmap.

The challenge in the industry at the moment is that new IP is very expensive and very risky. We'll certainly take risks with Vanquish and some announcements we've got coming at E3, which will be 2011 projects - again in that core area. If it takes $20 million to create a major Xbox 360 game, we'll do that, but we'll also [reinvest in our core franchises]. EA, Activision, Ubi, us - everybody's moving down a similar path of looking inwards at existing IP. It's not that we're spending less, we're just spending money in less risky areas.

That being so, we're also interested in any of the new applications - we're noticing [PS3 Move]. Obviously as and when DS2 and Wii 2 and everything else comes in, we'll step up that investment.

We're really encouraged by what Sony and Microsoft say about trying to reach the mass market. Let's call it the PS2 market. To get those players back onto those platforms would be great. Hopefully, Natal and [Move] could go some way to achieving that.

Do Natal and Move represent a chance to launch new IP that can run and run?
I think Natal and the Sony Motion Controller allow us to do things that are more about multi, party gaming.

In a way, it's a move away potentially from the core. That's what we're actually getting good at. Mario & Sonic is a multi-party game - but it's actually good fun. Microsoft and Sony are telling us that actually, we don't have to spend $20 million to get things consumers like, because you can approach things with games that are repetitive fun - easy to pick up and pass around. That's where we could either use old Sega IP or come up with new ideas.

The challenge for both first parties is to make sure the installed base of these devices is as high as they've claimed it will be.

If you look at how many Xbox 360s or PS3s there in Europe - let's say 12 million of each - if they get an attached rated of 12-and-a-half per cent with these [motion] devices, that's 2.5 million consumers for us to go after. If ten per cent of those buy our games, that's 250,000. How much money can you realistically spend on development for that audience?

But Microsoft and Sony are talking very big numbers. If they can achieve that, it will make these devices very viable. Could sales of Natal hit 50 per cent of those current installed base? We think the price point will be very attractive. 360 has a long way to go with a lot more hardware - so, for example, if they were to bundle Natal, it's a home run if they can afford to do that. I would imagine both Microsoft and Sony are going to spend big development money to make these devices very attractive.

We'll certainly be supporting both. We have several games on both [Move] and Natal that you will see from around the end of this year and into 2011.

Have you seen any problems with Project Natal's lag?
This is funny - it's a case of first party being damned if they do, damned if they don't. As publishers, what we want is a very close early relationship on these devices. And all credit to Microsoft and Sony, they've given us early development kits.

So if they're giving us something that's obviously rough and ready, we can't then criticise it and say: 'It's not perfection.' You can see the improvements in revised versions of what's come out. It's our point of view that most if not all of what's been promised on both is going to be delivered.

We asked our Japanese studio to create something for [Natal] which we'll show off at E3. They had a brilliant prototype up and running within six weeks. I mean a genuinely entertaining prototype you could just play.

How much of the sophisticated interaction we saw with Peter Molyneux's Milo and Kate can and actually will be used in the games Sega's making for Natal?
Those things were quite remarkable, and probably within 12 to 24 months, that's how we'll all [in the industry] be using the technology.

It's kind of like when you first see a new console - the games that come out in two years time from its launch are very advanced. I think at the moment because of the time development we've got, what you'll see with the early crop is going to be very fun, entertaining, easily accessible games for the whole family.

My guess is that in the next two years plus, you'll see some brilliant innovations. We're experimenting at the moment and it will take us a long time to get a fully commercially acceptable game that has that kind of application. However, we haven't seen what first party have yet. They could come in and blow us all away with their innovations.

Click here for the second and final part of our interview with Mike Hayes, in which he'll discuss E3, 3D gaming and the tricky MMO market...