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Thread: Why did Sega fail? A look at the 32X, Saturn and Dreamcast.

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    Master of Shinobi Mega Drive Bowlsey's Avatar
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    Default Why did Sega fail? A look at the 32X, Saturn and Dreamcast.

    Ok, so I know at first glance most of you will dismiss this as something you are already well aware of and as something that has been discussed to death in other videos. However, for me personally this video is the final word on the subject. Presenting graphs, stats, interviews and quotes from the key players involved, this vid gave me the best understanding to date regarding Sega's fate and the economics involved. What I found especially interesting is the quote from former Sega engineer and company legend, Hideki Sato, who said that due to the high cost of the Saturn's manufacture, Sega actually got FURTHER in the red the more consoles they sold. So much so that Sega actually deliberately started making less consoles to counter this as the level of debt they were accruing became apparent.


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    He never mentioned the piracy on the Dreamcast. That was the reason no one was buying games for the thing.

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    Quote Originally Posted by Mega Drive Bowlsey View Post
    What I found especially interesting is the quote from former Sega engineer and company legend, Hideki Sato, who said that due to the high cost of the Saturn's manufacture, Sega actually got FURTHER in the red the more consoles they sold. So much so that Sega actually deliberately started making less consoles to counter this as the level of debt they were accruing became apparent.
    *cough cough* http://www.sega-16.com/forum/showthr...new-interview)

    I like Jenovi's video - I'm glad we are moving in a positive direction away from the usual story.

    That said, there are some things that I'd like to point out, some of which are not well known:

    1) The 32X was the direct result of the SOA's belief that the Saturn was priced too high to sell in NA. Both Nakayama and Toyoda have explicitly stated this in Collected Works. Nakayama wanted to push the Saturn in both Japan and NA from the start, but SOA convinced him that the Saturn would never sell with a $400 price tag, so they started thinking of ways to revitalize the 16-bit market for a few more years. The 32X would come about as a result of this.

    2) The original intention was for the 32X to be the dominant console in NA and the Saturn to be the dominant console in Japan, at least for the first few years. Nakayama saw the 32X as a godsend because it would allow him to focus fully on the Japanese market, and SOA also saw the 32X as a godsend because they were finally in control of their own hardware. This is documented in quotes from Nakayama which I don't think have been translated yet. This helps explain why Kalinske actually talked down the Saturn in order to promote the 32X in late '94. He didn't think he was going to have to deal with the Saturn for a while yet.

    3) Everything changed when the 32X began to fall apart before it had even launched. The most obvious sign of impending failure was that Kalinske had been almost entirely unable to attract 3rd party support, despite going to extravagant lengths. Within one month of the 32X's release, Kalinske went from talking down the Saturn to promoting its near-future release. It's partially speculation, but I think that the early limited release of the Saturn in NA was at least somewhat intended as damage control for the 32X failure. Nakayama wanted to shift focus back to the Saturn. Once it was clear the 32X was a failure, the less attention it received the better.

    4) It's not true that the Genesis was unofficially discontinued when the Saturn was released. I don't know why this rumor persists so strongly. Read the Sega press releases from '95/'96 to see how much they were focusing on the Genesis. In fact, once it became clear that the Genesis was still selling strongly at the end of '95, Nakayama wanted more Genesis game development.

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    Quote Originally Posted by Gryson View Post
    2)The original intention was for the 32X to be the dominant console in NA and the Saturn to be the dominant console in Japan, at least for the first few years.
    One thing I don't understand is why they even introduced the 32X in Japan.
    Given the small MD user base there and the far more advanced adoption of CD medium (even the 3DO had some decent months there at some point according to sales figures), it just doesn't seem to make sense. Also, both the Saturn and PS1 being introduced there at the same time.


    Quote Originally Posted by Gryson View Post
    3) Everything changed when the 32X began to fall apart before it had even launched. The most obvious sign of impending failure was that Kalinske had been almost entirely unable to attract 3rd party support, despite going to extravagant lengths.
    I wonder to which extent the abrupt deterioration of Atari's finance (and use of false sales numbers for quite some time) which resulted in the sudden death of the Jaguar contributed to the 32X failure in the US.

    I say this because both platforms have titles which were developed sharing resources and they also share a good number of same cancelled games.
    Both line-ups were composed of "enhanced" versions of 16-bit games and "next-gen" 2D games for the most part.
    Even the 3DO already had a selection of titles closer to low-budget PS1 games than to 16-bit remixes.

    Therefore, I think the 32X would have been a more viable platform if developers could split costs with the Jaguar other than insisting in a line-up of games which would only fit this one weird add-on platform.
    On the other hand, you had Sony approaching these same developers and offering money to shift their projects to the PS1 instead; or at least use their best resources on PS1 projects. And go full 3D, of course.
    Last edited by Barone; 06-10-2019 at 10:54 PM.

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    Master of Shinobi Mega Drive Bowlsey's Avatar
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    Quote Originally Posted by Gryson View Post
    *cough cough* http://www.sega-16.com/forum/showthr...new-interview)

    I like Jenovi's video - I'm glad we are moving in a positive direction away from the usual story.

    That said, there are some things that I'd like to point out, some of which are not well known:

    1) The 32X was the direct result of the SOA's belief that the Saturn was priced too high to sell in NA. Both Nakayama and Toyoda have explicitly stated this in Collected Works. Nakayama wanted to push the Saturn in both Japan and NA from the start, but SOA convinced him that the Saturn would never sell with a $400 price tag, so they started thinking of ways to revitalize the 16-bit market for a few more years. The 32X would come about as a result of this.

    2) The original intention was for the 32X to be the dominant console in NA and the Saturn to be the dominant console in Japan, at least for the first few years. Nakayama saw the 32X as a godsend because it would allow him to focus fully on the Japanese market, and SOA also saw the 32X as a godsend because they were finally in control of their own hardware. This is documented in quotes from Nakayama which I don't think have been translated yet. This helps explain why Kalinske actually talked down the Saturn in order to promote the 32X in late '94. He didn't think he was going to have to deal with the Saturn for a while yet.

    3) Everything changed when the 32X began to fall apart before it had even launched. The most obvious sign of impending failure was that Kalinske had been almost entirely unable to attract 3rd party support, despite going to extravagant lengths. Within one month of the 32X's release, Kalinske went from talking down the Saturn to promoting its near-future release. It's partially speculation, but I think that the early limited release of the Saturn in NA was at least somewhat intended as damage control for the 32X failure. Nakayama wanted to shift focus back to the Saturn. Once it was clear the 32X was a failure, the less attention it received the better.

    4) It's not true that the Genesis was unofficially discontinued when the Saturn was released. I don't know why this rumor persists so strongly. Read the Sega press releases from '95/'96 to see how much they were focusing on the Genesis. In fact, once it became clear that the Genesis was still selling strongly at the end of '95, Nakayama wanted more Genesis game development.
    Very good points, Gryson. I'm a big fan of your work.

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    Quote Originally Posted by axel View Post
    He never mentioned the piracy on the Dreamcast. That was the reason no one was buying games for the thing.
    It a way, that should have helped SEGA (at least with hardware sales) . Piracy was rife on the PS and I bet it sold millions of hardware on the back of it, back in the day you had people in my area selling PS copies and even modding PS systems in the car parks of major Supermarkets like TESCO's.
    Almost everyone was modding their PS, but it didn't matter the PS was selling millions of hardware and so that was attracting developer support and even if just a tiny % of those PS users bought some games, it would result in millions of sales. Also, everyone I knew too, modded their OG XBox and that really never hurt the system.

    The trouble with the DC was even at the start no enough people in Japan or in Europe were buying the hardware and everyone fell for the PS2 hype and that bloody MGS 2 E3 trailer, which was a killer moment, even I wanted a PS2 after that trailer lol But I held off until the day SEGA called it quits and then got a PS2 along with DMC and ICO lol

    I think 3 major cock-ups were the main downfall of SEGA

    1) 32X.

    2) No 3D Saturn Sonic platform game.

    3) Not getting SquareSoft on board.

    For me, the day that Final Fantasy demo came out in Japan was the day SEGA lost the battle and never really recovered. Shame too, SEGA was really building something in Japan
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    Master of Shinobi Mega Drive Bowlsey's Avatar
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    Quote Originally Posted by Team Andromeda View Post
    It a way, that should have helped SEGA (at least with hardware sales) . Piracy was rife on the PS and I bet it sold millions of hardware on the back of it, back in the day you had people in my area selling PS copies and even modding PS systems in the car parks of major Supermarkets like TESCO's.
    Almost everyone was modding their PS, but it didn't matter the PS was selling millions of hardware and so that was attracting developer support and even if just a tiny % of those PS users bought some games, it would result in millions of sales. Also, everyone I knew too, modded their OG XBox and that really never hurt the system.

    The trouble with the DC was even at the start no enough people in Japan or in Europe were buying the hardware and everyone fell for the PS2 hype and that bloody MGS 2 E3 trailer, which was a killer moment, even I wanted a PS2 after that trailer lol But I held off until the day SEGA called it quits and then got a PS2 along with DMC and ICO lol

    I think 3 major cock-ups were the main downfall of SEGA

    1) 32X.

    2) No 3D Saturn Sonic platform game.

    3) Not getting SquareSoft on board.

    For me, the day that Final Fantasy demo came out in Japan was the day SEGA lost the battle and never really recovered. Shame too, SEGA was really building something in Japan
    Even if Sega had got the likes of Squaresoft on board I highly doubt that they could have made a game like FFVII on the Saturn hardware. Not necessarily because the console couldn't handle it, but because the only developers who seemed to consistently get the most out of the Saturn were Sega themselves and Capcom. Most other third party developers seemed to struggle with the hardware.

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    Quote Originally Posted by Mega Drive Bowlsey View Post
    Even if Sega had got the likes of Squaresoft on board I highly doubt that they could have made a game like FFVII on the Saturn hardware. Not necessarily because the console couldn't handle it, but because the only developers who seemed to consistently get the most out of the Saturn were Sega themselves and Capcom. Most other third party developers seemed to struggle with the hardware.
    If you were on about FF8 I might agree. There isn't that much special in FF7 imo. And if relatively small 3rd parties like Lobotomy, Scavenger, Camelot, Genki, Climax Entertainment, GameArts (for me both Gradina and Dark Saviour looked better than FF 7) could make the Saturn sing .I see no reason why Square couldn't, more with FF 7 being developed around the hardware, instead of being ported to it . Like Square told Retro Gamer mag, a major factor in why they choose with SONY (despite the Saturn having over a million bigger user base adv in Japan at the time ) was a commitment from SONY, to push and promote the game heavily in the West.
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    Master of Shinobi Mega Drive Bowlsey's Avatar
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    Quote Originally Posted by Team Andromeda View Post
    If you were on about FF8 I might agree. There isn't that much special in FF7 imo. And if relatively small 3rd parties like Lobotomy, Scavenger, Camelot, Genki, Climax Entertainment, GameArts (for me both Gradina and Dark Saviour looked better than FF 7) could make the Saturn sing .I see no reason why Square couldn't, more with FF 7 being developed around the hardware, instead of being ported to it . Like Square told Retro Gamer mag, a major factor in why they choose with SONY (despite the Saturn having over a million bigger user base adv in Japan at the time ) was a commitment from SONY, to push and promote the game heavily in the West.
    Oh I agree that it COULD have been done, games like Shining Force III on the Saturn look every bit as good as FFVII I think, I'm just questioning whether it WOULD have been done or whether Squaresoft would have had to cut corners if they'd started to struggle with certain aspects of programming.

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    Quote Originally Posted by Mega Drive Bowlsey View Post
    Oh I agree that it COULD have been done, games like Shining Force III on the Saturn look every bit as good as FFVII I think, I'm just questioning whether it WOULD have been done or whether Squaresoft would have had to cut corners if they'd started to struggle with certain aspects of programming.
    If the game was being developed around the Saturn hardware they wouldn't cut corners. It's not like FF 7 is such an amazing game to look at (FF8 different story) they were plenty of examples of small teams getting great results out of the Saturn. Shining Force III team was tiny in comparison to FF 7. FF 7 had over double to staff to what GameArts had on Grandia and to me, Grandia blows away FF 7 in almost every area (Gfx and sound) and its a far better RPG to boot. Just look at what the tiny team that was Traveller's Tales (at that stage) did on the Saturn with Sonic R.
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    Quote Originally Posted by Mega Drive Bowlsey View Post
    Even if Sega had got the likes of Squaresoft on board I highly doubt that they could have made a game like FFVII on the Saturn hardware. Not necessarily because the console couldn't handle it, but because the only developers who seemed to consistently get the most out of the Saturn were Sega themselves and Capcom. Most other third party developers seemed to struggle with the hardware.
    I'm honestly not sure I can see Final Fantasy VIII or IX on Saturn. FFIX was pushing PS1 pretty hard. Vagrant Story was another. Esp Metal Gear Solid. MGS was one of the most impressive looking games of its generation.



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    it didn't, its hardware mini might out sell nintendos and konami but ESP sony ah the irony 20 years revenge
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    Quote Originally Posted by Vector View Post
    it didn't, its hardware mini might out sell nintendos and konami but ESP sony ah the irony 20 years revenge
    It's doubtful it sells more than NES or SNES classic. NES Classic sold close to 4 million and SNES classic just over 5 million. SEGA would be thrilled if they reached half that. 2-3 million is closer to its ceiling IMO. No doubt it will sell better than the TG16 Mini and PS1 Classic. TG16 just wasn't as popular. PS1 classic was just a disaster.



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    Quote Originally Posted by SegataS View Post
    I'm honestly not sure I can see Final Fantasy VIII or IX on Saturn. FFIX was pushing PS1 pretty hard. Vagrant Story was another. Esp Metal Gear Solid. MGS was one of the most impressive looking games of its generation.
    But if SEGA had Square onboard then the games would be designed around the Saturn hardware, in just the same way had Sony signed up Treasure to develop Radiant Slivergun on System 11 board it would have been a different looking game, same goes for Panzer Dragoon Orta if developed for the PS2 or even Skies of Arcade if developed on PS2 hardware. Had Square beeing making Chrono Trigger or Seiken Densetsu 3 for the Mega Drive hardware we wouldn't have Snes specific effects or music and the games would have been designed around Mega Drive hardware strengths. If SEGA had Square in the 16 bit days, I bet sales of the Mega Drive and even Mega CD hardware would have been vastly different and I loved have loved too seen what Square would have done with a Mega CD RPG
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    Panzer Dragoon Orta would have looked like ass on the PS2.
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