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> Hindsight suggests none of those really worked and that Sega's other primary obsession, lowering hardware costs after its launch, both for competition and mar

> Hindsight suggests none of those really worked and that Sega's other primary obsession, lowering hardware costs after its launch, both for competition and margins, backfired. The retail margin on a core $250 Saturn system, without pack-in games, was 6 percent, or $15, while Sony seemed to be offering 10 percent core, 15 percent pack-in. > "How Did Sony Do it?" one slide rhetorically asks. The answer, according to Sega, is that it was perceived to be cheaper, its software "looks better than ours," that Sega "equity has been damaged by 32x and Sega CD," and that Sony has "effectively leveraged their considerable equity from consumer electronics." All Sega had to do, according to the next slide, was improve its software, get pricing advantage, improve its advertising, spend better on TV advertising, and "dramatically improve" its game timing. Simple enough.

dangus 3y ago
I highly recommend the movie/documentary “Console Wars” as it touches on this subject. The success of the Genesis especially in the United States, at least according to this movie, came from a “dream team” when it came to marketing and promotion. This team included Tom Kalinske, former CEO of Mattel. For a time, this team at Sega of America held the parent company’s ear, and it led to the Genesis breaking Nintendo’s monopolistic stranglehold on the game industry. The Genesis succeeded because of some pretty amazing marketing and the success of Sonic the Hedgehog. By the time the Sega Saturn came along, this team was gone, and I think it shows.
- gryson 3y ago
  Console Wars leaves a lot out. For one, Sega of America was in financial trouble as early as the 2nd half of 1993 when revenues nosedived. The company ended up laying off 70% of its 900-member workforce by the end of 1995. Despite having one of the largest game development divisions in the world, it utterly failed to consistently release hit titles (its internal studio, STI, was infamous for having more unreleased than released games). The CEO of Sega of America, Tom Kalinske, was strongly against marketing the Saturn in North America due to its expected high price tag. He persuaded the parent company to develop and release the ill-fated 32X, and then he put most of the company's resources into supporting it. When the 32X bombed upon release, the decision was quickly made to bump up the release of the Saturn, but Sega of America had almost no software in the pipeline. Ironically, in the end, the Saturn matched the PlayStation in price for most of its life. A few articles on the topic for anyone who's interested: https://mdshock.com/2021/04/14/segas-financial-troubles-an-analysis-of-export-revenue-1991-1998/ https://mdshock.com/2021/04/14/segas-financial-troubles-an-a... https://mdshock.com/2022/05/09/a-second-atari-shock-the-decline-of-the-16-bit-console-era/ https://mdshock.com/2022/05/09/a-second-atari-shock-the-decl... https://mdshock.com/2022/08/16/a-cloud-appears-over-sega-of-americas-rapid-progress/ https://mdshock.com/2022/08/16/a-cloud-appears-over-sega-of-...
  - jsnell 3y ago
    Unsurprisingly when ex-Sega America employees are one's only sources, the story ends up with Sega America marketing people as the heroes of the story :)
    - WoodenChair 3y ago
      Worse, the book Console Wars doesn't have any in-text citations. So, you never know who's perspective you are getting.
- delusional 3y ago
  I'm always dubious of these claims. For some reason the marketing guys are always the key to the success, and nothing else barely matters. In these "documentaries" the hardware could have been terrible, hell they could have been selling bananas, but if the marketing would have just been tweaked a bit, it would all have worked out. It's not surprising that the marketing guys market themselves the best and therefore end up with the more compelling story. It's just boring and trite. Tell me the story of their hardware. The ups and downs of developing games for a platform that wasn't done. The stories of turmoil, as the executives started demanding more features to match the competition.
  - bluGill 3y ago
    Success needs great vision of what can be in the near future, and carefully pushing that as far as possible but not letting "feature bloat" push it too far out. You can find this vision in both marketing and in engineering teams. If you are great at engineering (likely if you are reading this here), then you can hire people in marketing to sell whatever you create; while if you are great in marketing you can hire engineers to create your vision. Either works. That the vision seems to have been in marketing in Sega's case shouldn't take away from all the engineering effort that went in as well, but the vision, and thus credit, is on marketing making the right decisions. There are plenty of other engineering companies that likewise have a good vision.
    - gryson 3y ago
      The argument is that Sega's global success with the Genesis came from its products - not the marketing (despite what the marketers say). One piece of support for that is that the console succeeded against Nintendo in most territories, despite all being under different marketing leadership and following different strategies. When the Sega of America marketers were put in charge of product development and stopped relying on Japanese products, they were unable to replicate their success. They followed questionable practices derived from the toy industry (from where CEO Tom Kalinske emerged), such as a heavy emphasis on expensive licensed titles over original franchises.
  - tivert 3y ago
- bitwize 3y ago
  The success of the Genesis in the west had a lot more to do with the fact that Mortal Kombat on the Genesis had blood. Slick marketing and Sonic made the Genny a contender. Lax content restrictions at a time when gamers were thirsty for more mature content put it over the top.
  - jonhohle 3y ago
    While I think that was a cool factor, the Genesis became the sports console and really dominated with annual sports titles (especially from EA). That also targeted a demographic willing to spend money on games: 16-30yo guys. Those are the same people who would buy Mortal Kombat (especially since it was the edgier version). Mortal Kombat made a lot of headlines and sold a lot of copies, but I’ve never seen stats that suggested it drove console sales one way or another.

dangus 3y ago

I highly recommend the movie/documentary “Console Wars” as it touches on this subject. The success of the Genesis especially in the United States, at least according to this movie, came from a “dream team” when it came to marketing and promotion. This team included Tom Kalinske, former CEO of Mattel. For a time, this team at Sega of America held the parent company’s ear, and it led to the Genesis breaking Nintendo’s monopolistic stranglehold on the game industry. The Genesis succeeded because of some pretty amazing marketing and the success of Sonic the Hedgehog. By the time the Sega Saturn came along, this team was gone, and I think it shows.

gryson 3y ago
Console Wars leaves a lot out. For one, Sega of America was in financial trouble as early as the 2nd half of 1993 when revenues nosedived. The company ended up laying off 70% of its 900-member workforce by the end of 1995. Despite having one of the largest game development divisions in the world, it utterly failed to consistently release hit titles (its internal studio, STI, was infamous for having more unreleased than released games). The CEO of Sega of America, Tom Kalinske, was strongly against marketing the Saturn in North America due to its expected high price tag. He persuaded the parent company to develop and release the ill-fated 32X, and then he put most of the company's resources into supporting it. When the 32X bombed upon release, the decision was quickly made to bump up the release of the Saturn, but Sega of America had almost no software in the pipeline. Ironically, in the end, the Saturn matched the PlayStation in price for most of its life. A few articles on the topic for anyone who's interested: https://mdshock.com/2021/04/14/segas-financial-troubles-an-analysis-of-export-revenue-1991-1998/ https://mdshock.com/2021/04/14/segas-financial-troubles-an-a... https://mdshock.com/2022/05/09/a-second-atari-shock-the-decline-of-the-16-bit-console-era/ https://mdshock.com/2022/05/09/a-second-atari-shock-the-decl... https://mdshock.com/2022/08/16/a-cloud-appears-over-sega-of-americas-rapid-progress/ https://mdshock.com/2022/08/16/a-cloud-appears-over-sega-of-...
- jsnell 3y ago
  Unsurprisingly when ex-Sega America employees are one's only sources, the story ends up with Sega America marketing people as the heroes of the story :)
  - WoodenChair 3y ago
    Worse, the book Console Wars doesn't have any in-text citations. So, you never know who's perspective you are getting.
delusional 3y ago
I'm always dubious of these claims. For some reason the marketing guys are always the key to the success, and nothing else barely matters. In these "documentaries" the hardware could have been terrible, hell they could have been selling bananas, but if the marketing would have just been tweaked a bit, it would all have worked out. It's not surprising that the marketing guys market themselves the best and therefore end up with the more compelling story. It's just boring and trite. Tell me the story of their hardware. The ups and downs of developing games for a platform that wasn't done. The stories of turmoil, as the executives started demanding more features to match the competition.
- bluGill 3y ago
  Success needs great vision of what can be in the near future, and carefully pushing that as far as possible but not letting "feature bloat" push it too far out. You can find this vision in both marketing and in engineering teams. If you are great at engineering (likely if you are reading this here), then you can hire people in marketing to sell whatever you create; while if you are great in marketing you can hire engineers to create your vision. Either works. That the vision seems to have been in marketing in Sega's case shouldn't take away from all the engineering effort that went in as well, but the vision, and thus credit, is on marketing making the right decisions. There are plenty of other engineering companies that likewise have a good vision.
  - gryson 3y ago
    The argument is that Sega's global success with the Genesis came from its products - not the marketing (despite what the marketers say). One piece of support for that is that the console succeeded against Nintendo in most territories, despite all being under different marketing leadership and following different strategies. When the Sega of America marketers were put in charge of product development and stopped relying on Japanese products, they were unable to replicate their success. They followed questionable practices derived from the toy industry (from where CEO Tom Kalinske emerged), such as a heavy emphasis on expensive licensed titles over original franchises.
- tivert 3y ago
bitwize 3y ago
The success of the Genesis in the west had a lot more to do with the fact that Mortal Kombat on the Genesis had blood. Slick marketing and Sonic made the Genny a contender. Lax content restrictions at a time when gamers were thirsty for more mature content put it over the top.
- jonhohle 3y ago
  While I think that was a cool factor, the Genesis became the sports console and really dominated with annual sports titles (especially from EA). That also targeted a demographic willing to spend money on games: 16-30yo guys. Those are the same people who would buy Mortal Kombat (especially since it was the edgier version). Mortal Kombat made a lot of headlines and sold a lot of copies, but I’ve never seen stats that suggested it drove console sales one way or another.