Sega encouraged by strong "Mario & Sonic" sales

By Scott Hillis

SAN FRANCISCO, March 4 (Reuters) - Video game publisher Sega has sold 5 million copies of "Mario & Sonic at the Olympic Games", topping its expectations and giving it confidence that it can grab a bigger slice of the fast-growing market while staying independent.

"I don't think we believed in our wildest dreams that it would sell 5 million units in just three months," Simon Jeffrey, chief executive of the U.S. arm of Sega Sammy Holdings Inc (6460.T), told Reuters in an interview.

"We're moving very nicely up the charts but we are also very cognizant of what is happening at very top end of market, with regards to some of the M&A activity," Jeffrey said.

Last month, industry giant Electronic Arts Inc (ERTS.O) offered to buy Take-Two Interactive Software Inc (TTWO.O) for about $1.9 billion. Activision Inc (ATVI.O) is in the process of merging with the games unit of French telecoms and media firm Vivendi (VIV.PA).

"That's not an area we want to play in right now," Jeffrey said. "We have no interest in being acquired, we are very happy with our position right now."

Sega ranks as the sixth-biggest game publisher in the United States by revenue, according to market research firm NPD.

"There is plenty of room for smaller companies to be successful and profitable in this business. You don't have to be number one or number two. You can be number six very happily," Jeffrey said.