The system that would be known as Project Mars was given birth on 8 January 1994, the night before the opening of the 1994 Winter CES in Las Vegas, Nevada, in a hotel room during a conference among top-level Sega executives from both Japan and America. Those present at this meeting included Sega CEO Hayao Nakayama, Sega of America president Tom Kalinske, his special assistant Joe Miller, Sega of Japan's Hideki Sato, Sega of America's Paul Rioux, and a couple of other Sega of Japan personnel. Surprisingly enough, Nakayama was the one who first broached the subject at this meeting. As such, it is he and not Sega of America's Joe Miller who should be given credit as being "the father of the 32X." Miller remembers this meeting well.
Quite simply, Nakayama-san had directed the company to design and produce a cartridge-based 32-bit platform and bring it to market before the Christmas selling season of 1994. This was a lengthy, somewhat heated meeting - but in the end there was no question that Sega of Japan (in the form of a classic Nakayama mandate) had determined that this was what we were going to do. It was [now] up to the senior team to figure out and go execute. The difference, this time, was that Sega of Japan was actually inviting Sega of America into the process - instead of creating new platforms in a vacuum and throwing them over the ocean at us when it was too late to have meaningful input ....Sega of Japan was completely committed and was [ready to] mobilize whatever internal resources were require to finish the design and produce it in quantity for Christmas.
As first presented by Hideki Sato and his team of engineers, the original concept for Mars was little more than a Genesis with an extra 32-bit processor (a Hitachi SH-1, according to some reports) and an expanded color palette (128 out of 512 possible colors on screen). Joe Miller, who was in fact chief technical wizard at Sega of America, was appalled at the suggestion. "That is a horrible idea," he told them. "If all you're going to do is enhance the system, you should make an add-on. If it's a new system with legitimate software, great. But if the only thing it does is double the colors ...." There was some grumbling about this, but in the end Sega of Japan conceeded the point. They had several other hardware projects in the works, so this one was to be left up to the Americans. Mars was to be Sega of America's baby, although senior management staff from Sega of Japan would be present and oversee it through to production. By the time all was said and done that could be accomplished at that meeting, Nakayama was so excited at the prospect of Project Mars that he wanted its "core senior design team" to leave CES before it had even started and get started working on the new system right away. Miller, Sato, and the rest wound up attending the rest of the show, but went ahead and began the process during a series of late night meetings in Miller's hotel room over the next four days.