It’s been a straight up Sega love fest here lately. Not sure what it is about this first week of November, but for some strange reason I’ve simply had blast processing on the brain. I didn’t even realize it until reading Ars Technica’s retrospective, but the love in is appropriately timed; the Sega Mega Drive, our beloved Genesis, just turned twenty years old. While the Super Nintendo was my only true 16-bit love, the Genesis and I had our fair share of good times as well. Now, I’ve always understood it that Sega’s failure as a hardware manufacturer was a direct result of overextension, squandering the good will and widespread success they had with the Genesis in North America, Europe, and even South America by way of releasing too many expensive add-ons for the system that no one wanted or understood. The finicky Saturn hardware, stealthily released at an astronomical price point with too few games, and the Dreamcast’s inability to compete with Playstation 2 certainly didn’t help, but the real beginning of the end was the massive amounts of money poured into the Sega CD, 32-X, and the many different combinations of the two sold alongside good ol’ Genny. But, according to Technica, flooding the hardware market wasn’t the whole reason behind Sega’s fall from grace. According to the article, Sega of Japan shot themselves in the foot, promptly cutting off all support for the Genesis in 1995 after the Saturn launched because of sour grapes over the system’s failure in Japan and success in America.
Due in large part to its lackluster performance in Japan, Sega expected the Mega Drive to fare just as badly in America. But Sega's Japanese management underestimated the genius and tenacity of Sega of America's corporate team, headed by Tom Kalinske. By challenging Nintendo head-on, Kalinske propelled Sega to the top of 16-bit America within only a few years.
Chief among Kalinske's former executive experience was his tenure as President and CEO of Mattel. While heading the toy giant, Kalinske steered the company's Barbie line into a $1 billion-a-year business. More interestingly, Kalinske spun off the company's electronics division into a new subsidiary, Mattel Electronics, which developed the Intellivision video game console.
As president of Sega of America, Kalinske succeeded Michael Katz, whom Sega of Japan fired after lackluster Genesis sales performance in the US. Shortly after starting at Sega, Kalinske shocked Sega of Japan management by telling them that he wanted to challenge Nintendo head-on with aggressive advertising and a new pack-in game, Sonic the Hedgehog.
Ironically, Sega of America's stunning and unexpected success drove Sega of Japan into a fit of jealousy, with Japanese management furious that it couldn't repeat its American counterpart's victories. Ultimately, this jealously served to turn Sega against itself, and after the early success of the 32-bit Sega Saturn in Japan, Sega of Japan essentially punished its American branch by unilaterally pulling out of the 16-bit market (which had always done poorly in Japan) near the end of 1995, even though SOA knew it still had life in the West. This left Sega of America without an important revenue stream during a difficult transition between console generations, especially since the Saturn, which had launched early with few titles and a high price tag, was not selling well in the US.
I would love to know more about this, but the resources linked at the end of the article (specifically the interview with mid-‘90s SOA president Tom Kalinske) present a fairly one-sided view of the story. That said, this isn’t the first time I’ve read about the rocky relationship between Sega of America and Sega of Japan over their tumultuous final years.
Today, in 2008, not only is Sega slowly recapturing their creative spirit of old but they are, alongside a number of other Japanese giants, increasing their focus on being an international focused publisher. It would be easy to mark their new modus operandi as just a sign of the times, but here on the eve of their greatest success’ twentieth birthday, it looks more like they’re simply learning from past mistakes.
Be sure to check out the whole feature over at Ars Technica. It’s a fascinating read. Then go play some Genesis games, just for shits and giggles.
Related links:
Game Compilations: The Good, the Bad, and the Fugly
Bringing Sexy Back: Toshihiro Nagoshi
You’re Doing Great, Sega: Space Harrier Returns
Sega "Gets" the Wii
Tales of The Focus Group: Peter Moore Takes No Guff
Independent at a Price: Sega and Platinum Games