Originally published at: Why did Sega go belly up in the console market? | Boing Boing
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Electronic Arts having a many years long grudge against the company, a weird sidegrade that was mostly used for amv games instead of selling it to bring down the cost of games on cd compared to using carts (which could have been done at a loss like Sony did years after), the infighting between Sega’s head japanese branch and it’s north american operations over the Saturn and 32x’s development which also caused massive migraines for retailers outside of Japan, Yuji Naka’s polarizing management style which greatly affected internal studios and being stuck to an easily piratable media format that got quickly defeated by cd burners which also got overshadowed by their competitors use of dvd/mini-dvd.
Sega did do a couple of things right. Advertising to older audiences (who had an easier time buying pricey cartridges at the time). Bringing about a ratings system instead of giving into censorship. Laying down the groundwork for online console gaming (an area which Nintendo still seems to be struggling with). Having probably the strongest launch calendar known in gaming history all the way back in 99.
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I’d had a Genesis when the Sega CD was released, and I remember when the Sega CD came out. I thought it was a neat bit of hardware – and then the lead game for it was Night Trap. I can’t imagine what they were thinking that led them to make that the flagship game. The marketing just felt misogynistic and creepy.
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Hmm, before being too harsh on the CD, it’s worth remembering that Sega weren’t the only ones who went down that route. The 3do (Time’s product of the year 1993) sold itself on the back of its FMV games and its relationship with Universal. Lets also not forget that the Playstation began life as an addon for Nintendo either.
the main issue for Sega was a change in consumer expectations that THEY brought about. In 1992 both Sega and Namco teamed up with companies who were active in the simulator space, and because of those partnerships they were able to create a new generation of 3d games (starting with Daytona and Ridge Racer) about a year or two ahead of when they should have been able to.
For the console wing, this meant that a public who would have been happy to recieve the fastest most complex 2d games they’ve ever seen suddenly demanded that everything be in full 3d. Saturn designer Hideki Sato managed to rejig the spec to the point where the Saturn could compete in the 3d space, but at $400 it was being sold more or less at cost, leaving Sega unable to weather the brutal price war which followed against a deeper-pocketed opponent.
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Welcome to the BBS!
An excellent point about the Saturn. I think that the way it was drop released in the US was also a problem - there was not really enough marketing ahead of time to correctly set expectations and build demand for the system, and most importantly, build up a slate of US launch titles.
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Perhaps it was because they released a console that could easily play burned games.
I have also heard that the reason that the Playstation succeeded was because it was relatively easy to play burned games on. Finding people who would install mod chips was not hard, even in the small Northern English city I lived in.
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I was a total Sega head in my youth and had as much of the kit as I could afford, but times got tough around the release of the Saturn and I couldn’t buy one. In my opinion, the console market is way less interesting without Sega in the mix. They did some very cool stuff.
I’m glad that Sonic is thriving though; the two recent movies are way better than they aught to be.
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Dreamcast ended their console days, right?
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Yeah, but since the Dreamcast is the most perfect and wonderful thing that has ever been created in the history of humanity I must find other reasons for Sega failing…
The Dreamcast could never fail, it could only be failed
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Sega USA was my client back in the Dreamcast days, I remember Brad Huang, the CEO pretty well. He was a fantastically smart and fun guy who I think was just stuck. He brought in my internet networking startup to help out with SegaNet but the internal people had no room to listen to anyone and were running down a path that seemed doomed to failure, and did.
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Unfortunately, Sega really knew how to snatch defeat from the jaws of victory. Lots of really bad decisions led to their ultimate failure in the console market.
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Thank you! Yeah, Alienating some retailers and launching without a large library probably didn’t help (though worth remembering the limited number of launch consoles did sell out!) but considering the price i’m not sure a larger library would have helped. Over here the Saturn was not only more expensive but it didn’t even have the correct lead to connect to the portable TV I had in my room.
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It sort of did but they were already in a hole when they released it.
What were you trying to get them to do differently, out of interest? 
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I am impressed I remember Brad’s name, it was in the late 90s? The stuff my group was brought in for was help with managing unattainable latency goals or something very similar.
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Given the difficulties of releasing a console - all the things that have to line up for it to be successful, and how console generations mean you have to do that over and over again, it’s not at all surprising that any given console failed, no matter how “good” it was. A company needs some pretty vast outside resources to even be in the console business these days. It’s kind of surprising that Nintendo have managed to stay in the game, if anything.
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Testify!
Chu Chu Rocket is perhaps the best party game ever created. And none of the other versions the undead Sega has shipped since the Dreamcast have come close to the perfection of the original.
I’m hoping someone is working on a mini Dreamcast console right now and it will come with Chu Chu Rocket.
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I missed Chu Chu Rocket on the dreamcast but do have fond GBA memories of it.
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This is a friend-of-a-friend story, so treat it as such. Also it’s my memory from 25-odd years ago, so I may not be remembering the full story.
When the PS2 and the DreamCast came out, I was told that the Sony marketing dept were using some very nasty tactics of telling retail stores that if they displayed the DreamCast, they would never be allowed to purchase anything from Sony. When you take in to account all the areas that Sony sells things in (TV’s, music, etc), most stores chose Sony over Sega
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