The Sad Story of Sega's Many Mistakes

Via Press the Buttons, an interesting interview at the Sega-16 site with former Sega president Tom Kalinske. The company's former head burns bridges by laying blame for failures in the company, discussing the ways in which the Japanese office tried to run things, and revealing some of the phenomenally bad ideas the company somehow managed to overcome. From the article: "He was selling the Genesis with Altered Beast as the pack-in [instead of Sonic], and he was selling it at $189.99. There was also very little software activity going on in the U.S., and he hadn't built the company up (gotten permission to hire or didn't have the budget to), so there was no progress being made. If you remember, Sega sold the 8-bit machine - the Master System - prior to that against Nintendo, and it managed to get a 2% share of the market."

Comments

Marketing, Marketing, Marketing, Marketing

[Square Snow Man]

You can make almost anything a succes by just marketing a product down peoples throat. This may sound weird but its true because most things are not even worth before you bought them. (just think of a game you recently bought, was it worth it?)

Re:Marketing, Marketing, Marketing, Marketing

[fastgood]

make almost anything a succes by just marketing a product down peoples throat

Actually if it's a consumer product that depend on repeat purchases, you drastically shorten the product lifecycle when extra-heavy marketing is applied to inferior goods.

Re:Marketing, Marketing, Marketing, Marketing

[generic-man]

One quote stood out: "you've got to advertise against Nintendo, you know, make fun of them. Ridicule Nintendo and make kids think that the NES is absolutely the uncoolest machine to own."

Marketing is essential in getting a product out there, but counter-marketing never seems to work. "Genesis does what Nintendon't" was Sega's counter to the NES, but then the SNES came around with a lot of things that Genesis... didn't do. Likewise, I remember the Atari Jaguar's ads "Why spend $300 on a 32-bit PlayStation when you can get a 64-bit Jaguar for only $199?" Even Apple's "switch" ads didn't produce any perceptible benefit for the company.

It seems like the best marketing is positive, marketing features that others may have but touting yours above all else. The commercials for the Genesis could have been done even better without the anti-Nintendo slaps and with 30-60 solid seconds of gameplay with a Genesis logo in the corner.

Re:Marketing, Marketing, Marketing, Marketing

[penguinstorm]

If you're only hook is negative, it's tough to market.

Chances are your market has experience with what you're up against -- they've used it, maybe they've bought it, they've certainly heard of it otherwise you wouldn't be running up that hill.

Mac OS 9, to cite an example, got no traction with "Switch" because Mac OS 9 was a somewhat dated dog. Mac OS X has some...how much traction has yet to be determined, but it does have some traction.

Until Sega had Sonic, Nintendo's little plumber kept winning the battle. Sonic is still a Sega star, he just doesn't play on their hardware anymore.

Re:Marketing, Marketing, Marketing, Marketing

[trix7117]

Even Apple's "switch" ads didn't produce any perceptible benefit for the company.

Offtopic, I know, but I see a lot of posts about the Apple "switch" ads and how they are stupid or don't have any benefit for Apple. I don't know about anyone else but almost every non-geek I talk to that has seen them loves them. I personally know several people (friends' parents, my mother-in-law) who have even gone into the Apple store and played with a Mac because the commercials got their attention. My in-laws are now planning on purchasing an iMac as their next computer instead of a PC after their visit to the Apple store. I personally find them kind of dumb, but they definitely are being noticed (my mom and all of her friends routinely mention how much they love them) and are drawing in customers. I'm not trying to say that everyone I know is switching to a Mac because of Apple's great ads, but it is making people think about buying a Mac instead of a PC.

Re:Marketing, Marketing, Marketing, Marketing

[7Prime]

Hey, the "SEGA!" screem was quite possibly some of the best marketting of our age. It was new, it was unique, it was edgy, it was memorable, and it was done using JUST the company's name! As an advertisement producer, myself, if I could figure out a memorable quip that simply used the company's name, I would use it in a heartbeat. I mean, people started saying it in public, it was so popular... kids would yell it at each other in jokes. One guy I know even yelled it in the middle of the movie theatre! It's like getting a free word of mouth campaign. It's no coincidence that this was used at the very height of their coorporate history, when the Genesis was selling like hotcakes. When I think back on what the Genesis had to offer, and what the SNES had to offer, it seems like a no brainer to go SNES, but Sega did inspire a lot of people with their marketing.

Now, the rest of their marketing was total bullshit. Though, not nearly as bad as Turbo Graphics' "Johny Turbo" TurboDuo comic book campaign (quite possibly one of the worst marketting campaigns in history).

Re:Marketing, Marketing, Marketing, Marketing

[jwilcox154]

SNES came around with a lot of things that Genesis

Actually, that bit of information is one of the biggest urban legends out there. The Sega Genesis was far superior to the SNES, the Mode 7 effects were nothing more than smoke and mirrors, as the processor could only perform those tasks on a sprite when the background is one solid colour, usually black. The Genesis had a superior processor. True the SNES had more colours than the Genesis, but the Genesis could keep up with the same number of colours while the SNES had trouble with flickering.

The Genesis could do Vector graphics without a hardware add-on, while the SNES relied on the expensive Super-FX chip. The 32X also allowed the Genesis to utilize effects like Mode 7 on the the SNES as well as using all 32K colours, the SNES never used more than 200. The SegaCD was capable of the Mode 7 like effects as well.

Comparing the Turtles games no both systems, the Genesis blew the SNES out of the water. The only advantage the SNES had was more colours, while the Genesis game has more characters, less flicker, more background layers and more animation.

In TMNT IV the Turtles are capable of a flipping slash attack, that will also carry you further, just after reaching the peak of a jump, and are also capable of throwing footsoldiers into the screen. Also contrary to popular belief, the screen throw animation is not using any kind of scaling technique, but is animated in three simple sprite changes. This same approach could have been used in the Genesis version, and both systems could have animated the throw with more frames. The reason why the SNES game does not scale the sprite for the screen throw is most likely due to the speed of the game, and the necessary 3-6 characters on screen at once. The SNES never did exceptionally well with action games, and throwing scaling sprites into the mix would very likely have caused slowdown, and possibly couldn't have been done well in such a quick animation.

The SNES was inferior hardware wise, but both had an equal number of memorable games, depending on who you ask.
http://www.gamepilgrimage.com/TheSegaGenesis.htm

Re:Marketing, Marketing, Marketing, Marketing

[king-manic]

Actually, that bit of information is one of the biggest urban legends out there. The Sega Genesis was far superior to the SNES, the Mode 7 effects were nothing more than smoke and mirrors, as the processor could only perform those tasks on a sprite when the background is one solid colour, usually black. The Genesis had a superior processor. True the SNES had more colours than the Genesis, but the Genesis could keep up with the same number of colours while the SNES had trouble with flickering.

You've over simplified the comparison. The genesis has a better main processor but an inferior sound system and less colors. This meant that games could be slightly more complex and quicker but would also be less colorful and sounded poorer. Most genesis games also didn't take advantage of the extra proccessing power and ussually looked like a washed out version of the SNES version (if they both came out on the same console).

For many consumers the graphics and color were more important then "quick" gameplay or novelty vertex graphics.

Re:Marketing, Marketing, Marketing, Marketing

[Akaihiryuu]

The SNES is superior to the Genesis in some ways, but it depends on which component you're talking about. The m68k in the Genesis was FAR FAR FAR superior to the 65816, it's a night-and-day difference, there isn't even any competition there. However, the SNES did have far superior video and audio co-processors...it's the other way there, the Genesis's video and audio processors couldn't touch the SNES's. So once again it's a tossup...the Genesis had a far superior main CPU, the SNES had far superior co-processors. It all depends on what you're doing and what kind of game it is. I've seen Genesis games that do Mode-7 style rotation/scling, but they have to do it entirely in software (unlike the SNES where it was done in hardware on the video processor). The Genesis CAN do more in software because of the stronger CPU, but it can't match a lot of the background and rotation/scaling effects the SNES can do. However, this was really only advantageous in RPG's, which don't have a whole lot happening on screen (usually). Once you get a lot happening on the screen, the limitations of the SNES's CPU come into play and you get a lot of slowdown. Look at a game like Chrono Trigger...there really isn't that much going on on the screen at once, but it has a lot of nice background effects. Super Metroid was an exception...but you do get a lot of slowdown when there's a lot going on (drop a power bomb in a room full of enemies to see). The Genesis had a fairly weak video processor in comparison...fewer colors, no hardware rotation/scaling abilities. The sound processor was weak too, it used a pretty much standard Z80 for sound and didn't have any hardware effects. The SNES's sound processor on the other hand was quite advanced. It could do 8 channels, plus it had lots of hardware effects (like surround and echo). It used a format similar to MOD files, but it did it entirely in hardware. It was night and day compared to Genesis sound, blew it away. Amazingly enough, the SPC sound processor in the SNES was designed by Sony! I almost couldn't believe it...they made one of the best console sound processors for Nintendo, but they can't make a decent sound processor for their own systems to save their life.

The Playstation exists because Sega doesn't?

[RyoShin]

I remember we had a document that Olaf and Mickey took to Sony that said they'd like to develop jointly the next hardware - the next game platform, with Sega, and here's what we think it ought to do. Sony apparently gave the green light to that. I took it to Sega of Japan and told them that this was what we thought an ideal platform would be - at least from an U.S. perspective - based on what we've learned from the Sega CD, and our involvement with Sony and our own people. Sega said not a chance. Why would it want to share a platform with Sony? Sega would be much better off just developing its own platform, and it's nice that we had some ideas on what that platform ought to be and they'd consider it, but the company would be developing its next platform itself.

Wow... So the entire reason that the Playstation is as big as it is now is because both Sega and Nintendo turned down agreements with them?!

I knew about Nintendo's part, but I had no idea that Sega was involved with Sony as well.

This is insane! Someone mod the interview +1 Insightful.

The Sega Saga

[A nonymous Coward]

'tis a more worthy name, sir.

Many? Two.

[Anonymous Coward]

1. Pulling support for consoles before they even have a chance to fight on the market (SegaCD, Saturn, Dreamcast)

2. An utter disregard for advertising. I've said it a thousand times; I'll say it again - you couldn't swing a dead cat without hitting a PS2 or X-Box commercial. Even Nintendo had their share of marketing blitz. The Dreamcast? Word of mouth does not work well in console sales.

Okay, maybe three.

3. 32X.

Seriously, the only DC commercials I remembered seeing were for a Sonic game, months after hardware production for the DC had been terminated. Erm, what - the - hell? I hope nobody at Sega is wondering why they were the first true casualty of the modern console industry.

Same as it ever was

[27,000]

Through the early and mid 90's Sega had two things: the Genesis and Sonic. Yeah, the Genesis died an early death, but hardware won't last forever. The marketing was great though those days, and some lessons should have been learned, but somehow everything Kalinske mentioned worked was forgotten on the Saturn and DC. Because, as he said, Japan hated the American division's success.

And what have they done with the Japanese/American Sonic property since the days it more or less saved the company? They made it Japanese. And killed it. Since Knuckles' Chaotix, when they started loading in additional characters, piling on fluff at the expense of gameplay, the franchise has been struggling. Sonic Adventure 1 and later continued that theme while adding DESU SUGOI KAWAII SUPER RADICAL AMERICAN ATTITUDE ^___________^ without realizing that in America, the fad had thankfully disappeared in the mid 90's. It's grown more popular in Japan, at the cost of losing North America and European audiences. Now, even as Sega's only household franchise, Sega's made no efforts to save it. A run of OMG ATTITUDE games with poor controls and poor quality, Battle, Heroes, Shadow, has pretty much eclipsed what fond memories American gamers had for the series. The game for the Wii might change public opinion and bring the franchise back, but it's too early to tell.

So Sega's bludgeoned the American influences from their company and development... and looking at the last five years, can anyone say that was a good move? Can anyone rationally guess why?

Ridiculing Brand X != Sales

[The tECHIDNA]

Kalinske, FTFA: "I have some ideas on that.. One of them is: you've got to advertise against Nintendo, you know, make fun of them. Ridicule Nintendo and make kids think that the NES is absolutely the uncoolest machine to own."

Two words on why this could be an incredibly bad idea in practice: Johnny Turbo (also Wikified for your pleasure).

It can work somewhat well (witness the Game Gear vs. Game Boy battles and the infamous "Fly Plaything, Fly" commercial for NiGHTS) when done correctly, but as both commercials show, the "ridicule 'em" method will get you a first down, but not a touchdown; or in the case of NEC's (TG-16) Johnny Turbo, an ejection.

As an aside, again Kalinske, FTFA: "If you remember, Sega sold the 8-bit machine - the Master System - prior to that against Nintendo, and it managed to get a 2% share of the market."

Well, it certainly didn't help that the distribution network was provided by Tonka Corporation (yes, the "toy construction truck" Tonka). Heck, my After Burner SMS cart storage box says on the back:

Disributed by Tonka(TM) Corporation 6000 Clearwater Drive Minnetonka, MN 55543 Sega: From Tonka AFTER BURNER, A FOUR MEGA CARTRIDGE and SEGA are trademarks of Sega Enterprises, Ltd., a CSK Group Company. ©1988 Tonka Corp. All Rights Reserved.

I'm glad Sega learned their lesson eventually WRT the Genesis/MegaDrive, but it's too bad the cart didn't come with a free Caterpillar Dump truck...

Re:Many? Two.

[RoadDoggFL]

Sega's 9-9-99 ad blitz was all over the TV during the 1999 MTV Video Music Awards. I was quite the Sony fanboy at the time and disregarded it all, but I remember seeing the "it's thinking" ads for several weeks/months prior to launch and actually raising an eyebrow to the in-game models imposed on real-life settings.

Hell, my local Hollywood Ave. rented imported DCs and games (with a ~$200 deposit for the console) the summer before launch.

Re:Whiskey Tango Foxtrot

[bi_boy]

Theres a page 2 and 3 you know.

Re:Altered Beast rocks!

[Rude Turnip]

Even as a kid I found Final Fight a little disturbing, at least the arcade version. The more you beat up the female baddies, the more you were rewarded with titilation in the form of their shirts lifting up and cleavage coming out from underneath.

Bundled Games

[Skayde]

"He was selling the Genesis with Altered Beast as the pack-in [instead of Sonic]" Well, it's not like Katz would have had a choice at the time. Altered Beast was indeed the bundled game for the Genesis at release, but Sonic wasn't even out then; it was released in June of 1991, and it replaced Altered Beast as the bundled game around that time as well.

Re:Bundled Games

[sesshomaru]

Did the guy(s) in Altered Beast even have a name?

I always assumed it was "Altered Beast," I admit it was a bit awkward for him to introduce himself at parties...

Great Interview

[Mdentari]

Finally some answers or at least a different view of the inner workings of the once mighty Sega. The N64 event alone was enough to blow my mind. Incredible stuff.

Master System Market Share

[row1]

The Master System was big in Brazil (even up to the 2000's). They even had a Master System VI, including a wirless version and even a port of Street Fighter II. The Master System (II) was also quite big here in New Zealand, I only knew 1 person with a NES (I don't know where they got it from I even seen a NES for sale). Wonder Boy III rocked!!!

Re:Many? Two.

[Steve525]

Yea, and of all the dumb slogans: "it's thinking" is what I would usually say as my computer pauses and is thrashing away as I switch programs, etc. Not exactly a positive image for a computer/video game.

Sega built up a reasonable buzz and had a very successful launch for the Dreamcast. But they didn't really keep it up or do a good enough job against Sony's FUD.

Re:And the N64 chipset too

[Kuukai]

So Sega could have rolled out a CD-based system as powerful as the N64, and also been first to market. Too bad about those childish execs at Sega Japan.

Well, Sega wouldn't even have gotten the chance if it wasn't for the same foolish mistake being made at Nintendo. That entire generation of management pretty much proved it needed a new competitor in order to force it to get its shit together, and in doing so they brought in Sony... The irony is that now Sony's execs are screaming "we don't derserve to stay in the console business" even louder than Sega or Nintendo ever did. This industry has no learning curve.

Echoes of other technologies

[ObligatoryUserName]

A little off topic here (hi Mom!), but the Sony/Sega/Nintendo Playstation story is similar to 2 other stories I've heard lately.

Microsoft, who had more Mac programmers than Apple, only created Windows when Jobs refused to license their OS more broadly. (Gates was a big booster of what Apple had done and so literally Windows was intended to be a copy of the Mac OS with different licensing.)

Apple approached Creative about co-branded MP3 players and a joint venture and only created the iPod when they were rebuffed.

Even now they do not understand what made SEGA.

[master_p]

Even now, after all these years, those people do not understand what made SEGA in the first place. SEGA was the biggest name in the arcades because it had the most impressive games: Outrun, Afterburner, Space Harrier, Powerdrift, Virtua Racing, Virtua Fighter, Virtua Striker, Daytona USA, SEGA Rally.

What is common between all these games? they had the best technology for their era, allowing SEGA to present perfectly balanced gameplay and tremendously good content.

SEGA arcades are divided into two categories: a) superscaler games where bitmaps where scaled and rotated with amazing speed and b) polygonal games.

At the time of SEGA's height (from '86 to '96) which SEGA home console could reproduce SEGA's recent arcade hits with 100% the same quality? the answer is simple: NONE.

I went to the arcades and saw Outrun...cool! I want to play it at home. Could I? nope. Megadrive's Outrun version was mediocre. Same goes for the other superscaler games.

Then after a few years I saw Daytona USA. Great! but the Saturn could not play it! Although the Saturn could easily play SEGA's previous generation of games (the superscaler ones), it could not play the polygonal arcade monsters SEGA had in the arcades.

In other words, SEGA created its fame with a certain style of games and then destroyed itself by denying people to play those games...

What SEGA should have done is for Megadrive to be Saturn and Saturn to be Dreamcast. SEGA's consoles were always a generation technologically behind what people wanted, and thus developers went with Sony and Nintendo, and then consumers followed.

Advertising

[HalAtWork]

They couldn't advertise the Dreamcast because they had spent most of their money investing in producing the hardware and games. They put all their money into the Dreamcast hardware launch, what little money they had left after dropping the Saturn and not having any profits for quite a while (save for some declining arcade game sales). Before dropping all their money on the Saturn and then terminating its life early to start work on the Dreamcast (which required $$ for R&D as well), they had spent a lot of money on the ill-fated 32X launch. Sega simply did not have the cash.
 
As for the 32X being a failure, that was mostly because SOA did not know that SOJ was producing the Saturn at the same time as the 32X, so they launched the 32X as their next-gen 32-bit platform, and then SOJ launched the Saturn as their next-gen 32-bit platform. Consumers were confused and enraged.
 
The biggest part of this failure was that Sega had released the Sega CD and not produced so many games on it (although enough to satisfy gamers), then produced the 32X with hardly any games on it, then dropped it and left gamers in the dust. Then they had the gall to expect that gamers would jump on the Saturn. They shot themselves in the foot. If they just had never made the 32X, Sega could be in a whole new place right now, but as the article mentions, SOJ wanted to run things without informing SOA, who was trying to do their best according to what SOJ did tell them to do.

The REAL reason of SEGA's failure: upgrades

[Yvan256]

First there was the SEGA Master System against the NES. Fine.

Then there was the SEGA Genesis against the SNES. Fine.

But then, we got the CD-ROM extension. And then the 32X extension. And then the Saturn.

Then there was the Dreamcast (with games that look better than most PS2 games).

The problem here is that SEGA killed their own customers with the CD-ROM, 32X and Saturn. People were tired of paying for new SEGA hardware. People didn't buy the Dreamcast not because it wasn't a good console, not because there wasn't any games. They were wondering if the Dreamcast would last even one year, given SEGA's habit of releasing new hardware too fast before that.

New hardware every 4-5 years is a good thing. New hardware every year will simply destroy the credibility of your current system.... unless that new hardware can play the old games too.

Actually it did work

[HalAtWork]

Actually it did work for the Genesis; before SEGA stopped supporting the hardware, the Genesis had a 51% market share. The problem is then that they dropped the support and concentrated on the 32X/Saturn, instead of just focusing on the Genesis until the Saturn was ready to launch. Consumers did not need that whole 32X diversion. The marketing for the Genesis is practically what saved SEGA from obscurity in the U.S. Everyone remembers the SEGA Scream commercials.

On your other point, the Genesis did a bunch of stuff the SNES could not either, so your point is moot. The SNES was pretty much a NES with extra graphics and sound co-processors. The SNES could do a bunch of pre-set effects that looked nice and were easy to implement so they were used all over the place.

The Genesis had a much more powerful core, so it could still accomplish quite a lot, and more in some situations, but with more programming. Check out Adventures of Batman & Robin on Genesis, it's filled with effects done in software. Same with Mega Turrican, Gunstar Heroes, Contra: Hard Corps, and Vectorman 1 & 2.

The advantage that the Genesis had was that you could use the effects in any way you want, since they were programmed though the software, instead of being limited to a few pre-set hardware functions like the SNES, so you could have multiple rotating/scaling elements like in many of the games mentioned above, whereas on the SNES you could only do one scaling or rotating background at a time and not individual sprites (so you couldn't do the multiple enemies zooming at you in the elevator shaft like on the first level of Mega Turrican, and you couldn't do the rotating helicopter against a rotating sky background like on the boss in the Airship level of Gunstar Heroes), and you could apply transparency only to an entire background at a time, or not, so you couldn't have multiple transparent objects (like the flashlights the enemies hold in Batman & Robin), etc. Don't kid yourself, the Genesis could do a helluva lot. On the other hand, the only game with software mixed with hardware effects that were used to such a good extent on the SNES was probably DKC2: Diddy's Kong Quest.

Re:Actually it did work

[Akaihiryuu]

That's true...but don't knock hardware graphic effects too much. You could easily apply that same statement to more modern systems and say something like "Why bother with the limited hardware functions of 3D accelerators when you could just do it all in software and be able to do more?" In general in software, if you can do something in hardware it's better to do it in hardware. Software sprite scaling/rotation will never be as efficient as doing it in hardware, and thus it won't look as good as a hardware implementation. Another example...the Playstation could do transparent textures in hardware, the Saturn could not. I've seen software transparent texture implementations, and they look HORRIBLE. Some things work out better if you can do them in software, other things work better in hardware. Graphic effects usually fall in the latter category. Today they're looking at shifting physics engines from software to hardware (using a dedicated card based on the Aegia PhysX chipset)...with that, games can have FAR FAR better physics than you could possibly do in a software implementation. Unfortunately, there really isn't much game support for that yet, but check again in 5 years and it'll probably be impossible to play a newer title without one.

Soul Calibur on the Dreamcast?

[wandazulu]

I was a big Soul Calibur fan and, while it was still popular in the arcades, the Dreamcast comes out and there's this perfect port of it...I was literally stunned at the prospect of being able to play *exactly* what I had in the arcade at home. Same with Crazy Taxi, House of the Dead, Sega Rally 2, etc. I was able to directly translate slogging through all of SR2 on the DC to wowing people at a fancy arcade in Time Square.

The Dreamcast was the machine you wanted...it had all of Sega's great games (I know, SC was Namco) and could play them extremely well. But sadly, arcades were already disappearing and people assumed that anything by Nintendo was a toy, Sega was crap, and Sony was where all the cool kids were. Real shame...I still have my DC and it still plays and those games are *still* a lot of fun, even if I can't find an arcade to show off my mad skillz anymore. Ah well, thanks for the memories, Sega!

Re:Pre-Dreamcast Console Devhouse Memories

[Cybrex]

I half disagree with you. Yes, Sega did a magnificent job of burying their heads in their collective butts, but despite their best efforts to totally muck it up the Dreamcast turned out to be a surprisingly kick-ass system. No, it wasn't perfect- the GD-ROM format was a mistake when they could have been the first console to support DVD- but it had a lot of very smart features. Four controller ports, built-in modem (which could be swapped out for a NIC interface!), a memory card (the VMU) which doubled as a secondary display and interlinkable pocket gaming device, etc. etc. etc.

Though I personally have a strong preference for the PS2 controller (the DC controller doesn't fit my hands well, nor does the X-Box controller), the variety of controllers available for the DC really stood out. Sure, the maracas and fishing pole controller were silly, but they attracted attention to the platform in a way that Sega's lackluster marketing never did. Additionally, the DC not only had keyboard and mouse controllers available for it, but actually had games which could use them!

I'm tempted to list the ability to boot off of CD-Rs without any hardware mods as a plus (I first got a DC to play around with Linux on it), but it also made piracy rampant, so that's a tough call.

My point is that the reason why there are still "Dreamcast freaks" out there is that the system had a lot of good things going for it. Unfortunately Sega wasn't one of them.