: Pete's Perspective: Episode 4

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Pete's Perspective: Episode 4

Ladies and gentlemen of the jury of public opinion:

I have volunteered to speak on behalf of the defense in the matter of Sega v. Sony case, in which Sony has been charged with causing Sega to abandon their Dreamcast platform and leave the console hardware business. Sony basically “killed” Sega, in certain ways, according to the prosecution.

This is a grave charge, indeed. Sure, for many Sega proponents, it seems easy to put the axis of blame on Sony. Sony, after all, is arguably responsible for transforming the marketplace from the narrow group of so-called “hardcore gamers” that it once was into a more diverse, more casual group of consumers. Some Sega zealots claim that Sony’s very presence in this industry is ruining what once was a great pastime, by promoting shovelware over substance. More and more gamers, now considered by some as the “casual majority”, bought Sony’s PlayStation and PlayStation 2 consoles, while virtually ignoring Sega’s Dreamcast. The system’s poor showing in the sales realm ultimately led to Sega’s decision to put an end to the Dreamcast line—and the company’s hardware business—altogether.

However, what the prosecution has failed to mention in this case is anything to do with Sega’s business ineptitude and how the company’s consistently poor business decisions doomed the Dreamcast to an early grave before it ever saw the light of day. Yes, this may sound shocking, but this testimony will easily shed the spectre of doubt on Sony’s responsibility in this case, and may even prompt some to point the finger of blame inwardly towards Sega.

Of course, we all want the truth, right? The question is: Can you handle the truth, Sega?

Let’s turn the clocks back a bit, shall we? Let’s go back to Sega’s Mega-CD project, which many other gamers and members of this jury will remember as the Sega CD. Think back for a moment? What claims to fame did the Sega CD carry? Well, let’s see: There was the Lunar series of RPGs, right? That was a high point. And then, there was… ummm… oh yeah. Not much. The Sega CD was the breeding ground for the long-forgotten and highly-criticized FMV game genre. For a time, it seemed as though the whole purpose of the Sega CD platform was to play FMV games. Remember Sewer Shark, “Dogmeat”? How about Tomcat Alley? Cobra Command? Road Avenger? Time Gal? Mighty Morphin’ Power Rangers? Need I go on? Sure, there were other games, but how many others were notable? The versions of Mortal Kombat and NBA Jam were little more than their Genesis cartridge counterparts, with some FMV movie sequences thrown in. What was the point? I don’t think many consumers got the point, because the Sega CD is widely considered as the first of Sega’s big failures. Strike one.

Of course, this wasn’t a huge deal in Sega’s eyes. Although the Genesis had slipped back into closer sales competition with the Super Nintendo platform, Sega was still high on the success of the Genesis. Sega also knew that they had an ace-in-the-hole: their new 32-bit platform, called the Saturn. Sega didn’t want to further alienate Genesis owners after the poor response to their CD add-on by going right to 32-bit and causing consumers to move to another console in a flash. The proposed answer: the 32X. This add-on, which reminded many of a mushroom, was the go-between that Sega was looking for. Why wait for the Saturn to go 32-bit? Just plug in the 32X and watch the graphics! What Sega forgot was that they needed software to make this project fly. Sure, there were two great games available from Sega when the 32X launched: Star Wars Arcade and Virtua Racing. After those two games, there was almost literally nothing to speak of. Third-party support, which has been one of the Genesis’ strong points in the middle of the system’s lifespan, was nearly non-existent. No Electronic Arts or EA Sports games. No Capcom games. No Konami games. No Namco games. In fact, there was very little to speak of at all, aside from a few token Acclaim efforts. The $100 mushroom add-on went from being a good idea to being a huge black eye on the face of Sega. 32X owners pleaded for more support from Sega, and got almost none. All of the developers were busy on Saturn projects—even the in-house development teams were busy on other games. Retailers were forced to sit and look at stacks of 32X units and its limited software that nobody wanted any part of. Strike two-- and a fat strike, at that.

Things were looking a bit grim for Sega with the Genesis finally losing steam and the 32X debacle still stinging them. Still, there was hope with the Saturn. After all, Nintendo had announced that they had (again) delayed their new console, and the only other competition was coming from a relatively unproven company in Sony. The Sega name still meant good games, and Sega seemed confident that this reputation would prevail over the missteps that Sega had recently taken. In fact, their confidence was so high that they priced the Saturn at $400 and stuck with it as Sony announced a $300 price point for their rookie hardware effort, called the PlayStation. Sega then pursued the element of surprise by launching the Saturn early via select retail chains. This decision did not sit well with the chains left out, such as Pittsfield, MA-based Kay-Bee Toys. After being snubbed by Sega, despite sticking with them through their Sega CD and 32X disappointments, Kay-Bee announced that they would not be carrying the Saturn for sale. At the same time, gamers were left with an interesting dilemma—would they stick with the familiar Sega name and pay $100 more, or would they take a chance on Sony’s cheaper PlayStation? Although Sony jumped out to an early lead, it wasn’t insurmountable for Sega.

Unfortunately, other troubles were brewing. Recognizable Sega franchises were called for by gamers, but came late, if at all. Sega was forced to drop the Saturn price twice to keep up with Sony. Developers were allegedly complaining that the Saturn was a difficult machine to develop for and that Sega was giving little technical help to them. Friction was beginning to build between Sega and its third-party developers, but Sega stayed the course. Sega fell even further behind when Nintendo finally made their next console available, along with Super Mario 64—a game that would go on to sell over 5 million copies in the United States alone. Third-party publishers abandoned Saturn projects with more frequency and began to move them elsewhere, if it all. Sega couldn’t even gamers back with solid first-party efforts (such as NiGHTs and Virtual On). Even the allure of online gaming went basically unnoticed. Sega’s myriad of poor planning and bad business decisions haunted them in the 32-bit generation, and that was strike three.

At this point, Sega’s reputation was damaged forever. The Sega name, once synonymous with quality games, now was also synonymous with failure. Sega quietly swept the Saturn under the rug and had basically decided to lay low. Word of a new Sega platform met with mixed feelings of resentment and disbelief. New Sega of America President and CEO Bernie Stolar had even said in an interview with a notable gaming magazine that the idea of not putting the Sega name on this new console was considered, so as not to reopen old wounds. Still, Stolar insisted, Sega had learned from their mistakes and they were ready to try the console hardware game one more time. This new platform was said to be online-capable right out of the box, was to be 128-bit, and was to boast quite the launch lineup.

The problem with the Dreamcast was two-fold. Yes, Sony had already made it clear that a second, 128-bit PlayStation unit was in development. However, the biggest problem with the Dreamcast right from the start—before the system even reached store shelves—was that gaming consumers weren’t exactly willing to forgive Sega for their past misgivings. I was employed as a store manager for FuncoLand prior to the Dreamcast’s release, and trying to pre-sell the Dreamcast was far from a big success. Here’s the basic phrase that I got from prospective buyers when asked whether they wanted to buy a Dreamcast:

“Doesn’t Sega make that? Man, I’m not buying any more Sega stuff. They screwed me with the 32X, and they screwed me with the Saturn. They’ll screw me with the Dreamcast, too. What, will it last about a year or so?”

This quote marks, almost verbatim in many instances, the sentiment of the gaming consumer in 1999. Notice how the words Sony or PlayStation 2 are not in the quote anywhere. Interesting, isn’t it?

To make matters worse, despite strong first-party support from Sega, major third-party publishers had little or nothing to do with the Dreamcast. Look at Electronic Arts. There were no EA Sports games on the Dreamcast. Sure, Sega countered with their critically acclaimed 2K sports series, but the lack of name recognition surrounding EA’s bid sports franchises—Madden, NBA Live, and Triple Play—seriously hurt the system’s chances of appealing to the casual majority. Sports games are easy to just pick up and play, and are big favorites of casual gamers everywhere. How about Namco’s limited support, after their impressive port of Soul Calibur? What happened to Konami after their launch title, Air Force Delta? Only Capcom was a major third-party supporter of the Dreamcast.

Not everyone wants to hear about new or original games, like the ones that Sega was trying to force-feed everyone. Space Channel 5, Seaman, Shenmue, Samba de Amigo… all of these games appealed to the diehard Sega fan, but these fans no longer made up the majority of game buyers. Sega never adjusted to this fact.

As you can plainly see by the evidence presented to you, Sega certainly bears more of the responsibility for the early demise of the Dreamcast console than Sony ever could. In fact, it’s Sega’s repeated poor business decisions and irreparable reputation with the major players in the gaming community—retailers, developers and publishers, and gamers themselves—that easily foreshadowed the Dreamcast’s death.

The verdict here should be obvious. I rest my case.

7/14/2003 Peter Skerritt

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