Have the Big Three Learned from the Saturn's Mistake?
Has SEGA's failed platform taught Nintendo, Microsoft and Sony anything?
3/8/2008 7:10 PM | 0 Comments | Page 1 of 5
When I originally proposed this story, I called it "The Saturnization of PlayStation 3" because I saw some striking parallels between the way SEGA handled its ill-fated Saturn game console and the way Sony's been handling its PS3. Of late, though, Sony has shown signs of reasonable intelligence.
While working on the backstory of this article, I became aware that the real analogies are not between SEGA and Sony; they are between Microsoft and SEGA.
History repeats?
When I first mentioned my story idea to John Taylor, a savvy videogames analyst working for Arcadia Investment Corporation, he said, "If I were your editor I would ask, Who remembers the Saturn and why is it relevant?"
I think, though, if you look carefully, you will see parallels.
It has been 12 years since Saturn first appeared, and a lot of people have forgotten about the system, but lessons learned at that time are no less valuable today.
So let's talk history. SEGA, a Japanese company founded by Americans after the Korean War, has a long and successful history in coin-operated entertainment. It also has a history as a console manufacturer, but that history is spotty at best.
In 1986, SEGA made an unsuccessful bid to compete with the Nintendo Entertainment System (known as the Famicom in Japan). In 1989, SEGA launched the Genesis (known as the Mega Drive in both Europe and Japan) to very little fanfare. The following year, the first full year that the Genesis was on the market, was Nintendo's most dominant year in games.
Then the Tom Kalinske regime took over at SEGA of America and things changed dramatically. Kalinske, a former president of Mattel, came in with a team of aggressive marketers. They dropped the price of the Genesis below $200, replaced the original pack-in game,
Altered Beast, with
Sonic the Hedgehog, adopted Sonic as the company mascot, began publishing games designed specifically for American audiences, and launched a high-octane advertising campaign that maligned Nintendo visciously.
SEGA of Europe followed Kalinske's lead, and soon SEGA controlled more than half of the U.S. and European markets. SEGA of Japan disregarded his ideas, and Mega Drive never caught up to Super Famicom (Super NES in the United States) or PC Engine (TurboGrafx in the states) in Japan.
In the United States, SEGA took video gaming out of the elementary school ghetto by persuading teenagers that they did not need to abandon gaming once they entered ninth grade. When, in the 1993 Senate hearings on videogames, SEGA Vice President Bill White claimed that the average Genesis owner was in high school and that the average SegaCD owner was 22 years old, Nintendo of America chairman Howard Lincoln said he was lying. Kids who grew up on videogames had outgrown Nintendo, but they did not mind being seen talking about SEGA in public.
Saturn, when things went wrong
By 1995, SEGA had overdiversified, launching 32X, Game Gear, Pico and Saturn to go along with its already existing Game Gear and Genesis business. SEGA, a company with limited finances, found itself with too many platforms to support at once and made the wrong decision -- it abandoned 19 million Genesis owners to throw all of its efforts into Saturn.
In 1995, Saturn launched at too high a price point -- $399. It was not the first system to launch in that no-man's-land. In the years just prior to the launch of Saturn, Panasonic launched the 3DO Multiplayer for an unheard-of $699. Neo Geo launched a home system for its popular line of arcade games. The Neo Geo Green package was a mere $399. For $599, you could buy the Neo Geo Gold package which came with two controllers and a game. That extra game was important since Neo Geo cartridges generally retailed for $200.
