2023-07-05 11:15:02
Game News “We’re Killing Sony”, This 1996 Document Reveals Sega Believed It Was Winning The Console War With Its Saturn… Terrible Mistake
Published on 05/07/2023 at 13:15
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Flashback, behind the scenes of the console wars of the 1990s.
Of the documents from 1996 show how much Sega veiled its face on the success (or rather failure) of sa Saturn once morest the new competitor of the time, Sony.
Documents from 1996 plunge us back into the console wars
These recently released documents shed light on the gradual decline of console production at Segaas the firm fought tirelessly to compete with the giant Sony (not yet quite a gaming giant at the time, but already a tech giant). Through a 272-page PDF published by Sega Retro, we discover the 1996 financial results as well as Sega of America sales figures, and emails exchanged between Sega executives. Comments from company executives on the state of the industry and the release of the Sega Saturn are fascinating, with today’s look. Despite a Solid toy library, the Saturn has consistently lagged facing the new PlayStation, a younger and cheaper console.
“We’re killing Sony”… Spoiler alert… it didn’t last.
These documents reveal the strenuous efforts by Sega to overcome these difficulties. In an email, former CEO Tom Kalinske said: “In Japan, we are killing Sony. In all stores, Saturn stocks are sold out, while batteries of PlayStation gather dust. Dealers tell us they can’t even measure our actual sales rate because Saturn consoles sell out before they can count them.” However, as Kalinske points out, this success in Japan has not been equivalent in the United Stateswhere Sony indisputably dominated Sega upon its arrival and throughout the second half of the 90s.
The total cost to manufacture the Saturn in early 1996 was $232 – much lower than expected.
The retail margin was only 6%! Meaning retailers made only $15 per Saturn sold.
Emails reveal concern that retailers were going to abandon the market en masse due to low margins.
— John Harrison – Mega Drive Shock (@MegaDriveShock) July 3, 2023
As Sega expert columnist John Harrison reminds us, dealers outside of Japan were soon tempted to drop the Saturn. Indeed, a Saturn cost $232 to producebut the reseller margin was only 6%. In other words, they only garnered $15 per Saturn sold. Sega was already concerned at the time that the retailers are abandoning its consoles in drovesbecause of these margins that are too low.
Quality and well-timed sports games, what did the Saturn lack?
In these documents, we discover that the sports games have been one of Sega’s main weak points, according to the publisher. The company was simply unable to compete with EA and Sony behemoths in this domain. A page of the document reveals that Sega did not count only 11 people to develop and market sports titles, while the competing teams were much larger. As a result, games were often released out of time with ideal times for sports game franchises, such as NBA, NFL, and NHL games. Some games have even been so poor that they were simply canceledlike an NFL game so bad, and six months behind schedule, that Sega felt it would have “damaged the prestige of the brand if it had been released”.
Sega was ready to climb the slope, Nevertheless. The firm noticed that the PlayStation was seen by the public as a “cheaper console, with better looking games, better marketing, and a bigger budget behind it”. Sega wanted to change that with best commercialsand sports games released at the right time … But the Nintendo 64 launched in 1996 closed Sega’s windows of opportunity. If the Dreamcast will be entitled to a good launchthe PS2 will take it all in its path, and Sony will be from there, very clearly, the ogre of the market.
Sega may not produce consoles anymore, but it’s still a major publisher! So much so that Microsoft was still considering buying Sega just a few years ago…
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