Speaker 1: Welcome to tech Stuff, a production from my Heart Radio.
Speaker 1: Hey there, and welcome to tech Stuff. I'm your host,
Speaker 1: Jonathan Strickland. I'm an executive producer with I Heart Radio.
Speaker 1: And how the tech are you? You may have ascertained
Speaker 1: that I am not at due to the nature of
Speaker 1: my voice, which is probably a bit more um lower
Speaker 1: than usual. Been coughing a lot rough times in the
Speaker 1: Strickland household. But I'll be okay. So because of my
Speaker 1: condition that I'm a bit under the weather, We're going
Speaker 1: to present to you something special. You know. I did
Speaker 1: this a few weeks back where I brought up an
Speaker 1: old episode of Business on the Brink, the show that
Speaker 1: I used to do with aerial casting where we would
Speaker 1: take companies that were at a real inflection point, either
Speaker 1: they were just about to take off or they were
Speaker 1: just about to disappear and talk about what happened and
Speaker 1: how we got there. And a lot of those companies,
Speaker 1: of course, have something to do with tech. So today
Speaker 1: I thought we would do the episode titled The Brink
Speaker 1: plays Games with Sega. I hope you enjoy Sega. From
Speaker 1: Slot Machines to Sonic the Hedgehog, this company played its
Speaker 1: way into people's hearts. But in the nineties they made
Speaker 1: a few key mistakes that would make them lose the
Speaker 1: trust of their gamers, and by the time they came
Speaker 1: out with elite new system worthy of consumers praise, it
Speaker 1: was too late and the market was gone. Learn how
Speaker 1: this company spun out of control and out of the
Speaker 1: console game. This is Sega on the brink. Hi everybody,
Speaker 1: I'm Jonathan Strickland and I'm Arial Casting, and I want
Speaker 1: to apologize that intro had far too few puns in it.
Speaker 1: Game over area over. So this was a request from
Speaker 1: a from a Tony. Yeah, isn't your husband's name Tony? Yes,
Speaker 1: there may or may not be any relation to that,
Speaker 1: but you know what, it's a really good suggestion. If
Speaker 1: my wife had made a suggestion, I would have gone
Speaker 1: with it too, So totally cool. I put it in
Speaker 1: listener suggestions because he doesn't work on this podcast, so
Speaker 1: it's a listener suggestion. Totally Yeah. So this is a
Speaker 1: great story to cover in the sense that it's easy
Speaker 1: to forget it now. But Sega for a while was
Speaker 1: writing high in the video game console world, and for
Speaker 1: a brief period it looked like they could become the
Speaker 1: dominant name in video game consoles, and then everything went wrong.
Speaker 1: So it's to the point now where people who think
Speaker 1: back on the Sega consoles, they tend to fall into
Speaker 1: two camps. They're either the people who wistfully remember how
Speaker 1: awesome those game consoles were more there people who think
Speaker 1: of it as a big joke. It's a little both,
Speaker 1: a little both because largely because of the very moves
Speaker 1: we're going to talk about in this podcast. But just
Speaker 1: in the interest of full disclosure, I was someone who
Speaker 1: got hold of a Sega Dreamcast system, which we're going
Speaker 1: to talk about in this episode. I got it after
Speaker 1: the Dreamcast had already made a splash and was fading
Speaker 1: from memory, So this was they weren't making new Dreamcast
Speaker 1: games by the time I got hold of the system,
Speaker 1: it was all the used game market. But I was
Speaker 1: blown away by the Dreamcast. So when we talk about
Speaker 1: people who truly loved that system, I'm one of those people.
Speaker 1: I want to mention at the beginning of this that
Speaker 1: as much as we say that Sega has kind of
Speaker 1: fallen out of memory, people were saying they might make
Speaker 1: a comeback, and the fact that there's a Sonic movie
Speaker 1: coming out a Sonic movie that is rapidly undergoing massive
Speaker 1: change is as we record this. The news recently broke
Speaker 1: that because of the overwhelmingly negative reaction to the Sonic
Speaker 1: the Hedgehog teaser trailer, they are going to redesign Sonics look,
Speaker 1: which is a pretty massive undertaking for a for a
Speaker 1: c g I movie. It is. I'm really rooting for
Speaker 1: them to get it right, because I think a Sonic movie.
Speaker 1: I enjoyed the stories when I played the games, and
Speaker 1: I think kids would enjoy a Sonic movie. I didn't
Speaker 1: realize there was a story. Here's a story dr about
Speaker 1: Nick Steel's little animals and turns them into I just
Speaker 1: figured you ran really fast and when you hit stuff,
Speaker 1: rings popped out of you. I mean, which I mean
Speaker 1: that happens to me. Yeah, it's I mean, I get it.
Speaker 1: It's true to life. Well, let's talk a little bit
Speaker 1: about just a little bit about Sega's origins to kind
Speaker 1: of set the scene of how they were able to
Speaker 1: climb in the home console space. Now, obviously, the story
Speaker 1: of Sega starts before there was a home video game
Speaker 1: console market. We're actually not going to start at the
Speaker 1: very beginning of the company that becomes Sega because it's
Speaker 1: a lot of little steps, it's not very important. There
Speaker 1: was a slot machine company made in Hawaii, and eventually
Speaker 1: the Army said, we don't want slot machines on US
Speaker 1: army bases anymore, which is where they were selling their
Speaker 1: machines too. So they went over to Japan where they
Speaker 1: still could sell games, and they became Service Games Japan. Yeah,
Speaker 1: as service thus the nod to making games for like
Speaker 1: military installations. Yes, And when they went over to Japan,
Speaker 1: they're being run by Martin Bromley. Now, in nineteen sixty
Speaker 1: that company liquidated and split into two divisions. I'm gonna
Speaker 1: pronounce this probably very poorly, Nihan Goriku Basan which traded
Speaker 1: under the name Automatic Inc. For distribution, and then Nihan
Speaker 1: Kaeso would traded under the name Sega Inc. Sega is
Speaker 1: short for Service Games, taking the first two letters of each.
Speaker 1: So they made slot machines, but they also made juke boxes,
Speaker 1: so that you know, obviously this is arcade game days.
Speaker 1: And where do we go from there. Well, eventually those
Speaker 1: two companies recombine. Now at the same time, you've got
Speaker 1: Rosen Enterprises Inc. Also in Japan at the time run
Speaker 1: by David Rosen, who is another army man. His company
Speaker 1: started as an art exporting company, taking art from Japan,
Speaker 1: exporting it to the US during the Korean War, and
Speaker 1: then he became an arcade game importer in nine and
Speaker 1: then he became a producer of electro mechanical arcade games.
Speaker 1: So the precursor to video games, right, this would be
Speaker 1: games that would actually have moving components to those. So
Speaker 1: a pinball machine is sort of a variant of these games,
Speaker 1: but you had all sorts of different ones. There's a
Speaker 1: great arcade game museum in San Francisco where you can
Speaker 1: actually see some of these electro mechanical and you can
Speaker 1: play them, these electro mechanical games. And it is funny
Speaker 1: to see how human ingenuity came up with ways to
Speaker 1: convince people to part with their change. I believe even
Speaker 1: and I would part with a lot of change there,
Speaker 1: I'm certain. Now. Rosen was very successful at this, and
Speaker 1: in part because he had other engineers helping him from
Speaker 1: companies like Nihang Kupasan, and so he started looking for
Speaker 1: mergers and the one that panned out was with Nihang
Speaker 1: Kupasan or Sea, and they merged in n and I'm
Speaker 1: gonna call it MGB. From this point, they acquired Rosen
Speaker 1: Enterprises and Rosen became the CEO, and they renamed the
Speaker 1: company Sega Enterprises, taking the Sega from m GB what
Speaker 1: they were trading under, and taking Enterprises from Rosen Enterprises.
Speaker 1: And at that point they were making the electro mechanical
Speaker 1: arcade games and jukeboxes, and they started coming out with
Speaker 1: their own games in sixty six. The first one that
Speaker 1: really got some traction was a game called Periscope, and
Speaker 1: they even started opening up essentially arcades. They were called
Speaker 1: game centers, but I mean they're like arcades in the
Speaker 1: sense of like the video U arcades made famous in
Speaker 1: the nineteen eighties. Periscope, by the way, was so good
Speaker 1: that they started importing it to the US. Yeah, so
Speaker 1: there actually ended up being an international market for the game. Yeah.
Speaker 1: And then in nineteen sixty nine, Sega was acquired by
Speaker 1: Gulf and Western, who had been largely trading in pinball machines.
Speaker 1: From my understanding, so now Sega has pinball machines. Yeah,
Speaker 1: so they start doing those as well. As a pinball enthusiast,
Speaker 1: I appreciate that I love pinball games and Sega was
Speaker 1: then trading on the US stock market, so they were
Speaker 1: now not just on Japanese markets but also in the US.
Speaker 1: In fact, primarily in the US by this point, and
Speaker 1: they had Sega Enterprises Incorporated and they essentially shifted their
Speaker 1: operations to the United States, although they maintained an operating
Speaker 1: arm in Japan as well. Yeah, it was an ltd.
Speaker 1: After that, they started moving into video games, both in
Speaker 1: the arcade and at home and seeing the trend. There
Speaker 1: have been a couple of games that people have attributed
Speaker 1: to this. The one that is coming to my mind
Speaker 1: is Pong. So they saw Pong and they said, well,
Speaker 1: this is the way things are going. Let's jump on
Speaker 1: the train. And they even acquired the US gaming company
Speaker 1: called Gremlin in seventy to help them expand into that market. So,
Speaker 1: you know, we kind of skipped over a lot of
Speaker 1: the early seventies, but that was more of the same.
Speaker 1: It's really when you get into the mid to late
Speaker 1: seventies where the arcade games, the video games story coming out,
Speaker 1: where this this story starts to change. Uh, they were
Speaker 1: doing pretty well, that division was doing pretty well, but
Speaker 1: the overall parent company it was a different story. Yeah,
Speaker 1: So Golf and Western hit some trouble and they sold
Speaker 1: the U S division of Sega to Midway Games in
Speaker 1: at which point Sega became a primarily Japanese company again.
Speaker 1: Sega North America was absorbed into Midway. Midway is another
Speaker 1: company we'll have to do a brink episode on sometime
Speaker 1: in the future. Midway famous in the United States for
Speaker 1: the Mortal Kombat series. Midway is no more. So that's
Speaker 1: another story that has its own brink moment, but we'll
Speaker 1: save that for its own episode, you know. And Saga
Speaker 1: does have operations in the US again, but at that
Speaker 1: time they shifted. So Rosen wanted this video game market
Speaker 1: that they had built, so he and some others bought
Speaker 1: it back from Gulf and Western. They buy back the
Speaker 1: Japanese branch, right, so the North American branch that's part
Speaker 1: of Midway. Rosen goes back to the Japanese side and
Speaker 1: purchases that one back from the parent company. Yes, and
Speaker 1: in three Sega had its first console, the s G
Speaker 1: one thousand, which was I'm sorry if I offend anybody,
Speaker 1: nothing to write home about. They also had a micro
Speaker 1: computer come out at that time, which I think was
Speaker 1: the s G two thousand or three thousand. I covered
Speaker 1: this for a living, and I don't remember ever reading
Speaker 1: about the s G one. Yes, well, they had a
Speaker 1: really hard time competing with Nintendo because Nintendo already had
Speaker 1: market share. And then in six Sega came out with
Speaker 1: their first successful console, the Sega Master System. Yeah, but
Speaker 1: then the Nintendo Entertainment System was still pretty much the
Speaker 1: dominant player in that space. I mean, remember that the
Speaker 1: Nintendo Entertainment System was the system that was able to
Speaker 1: bring the video game home market back from the crash
Speaker 1: of three. Well, Sega realized that they were not necessarily
Speaker 1: going to get Nintendo's markets, so they focused on markets
Speaker 1: that weren't saturated with Nintendo already, places like Brazil in Europe,
Speaker 1: and they became the second most popular home system in
Speaker 1: the world, kicking Atari out of that spot, which I'm
Speaker 1: surprised Atari was even in that spot. I'm guessing it's
Speaker 1: from lack of competition. Yeah, no, because no one else
Speaker 1: wanted to get into the video game console market after
Speaker 1: that crash, right, so Nintendo. Everyone thought Nintendo was crazy
Speaker 1: for getting into a market just as it had imploded,
Speaker 1: and Nintendo was able to prove that there was still
Speaker 1: a market there, but no one else had anything ready
Speaker 1: to compete in that space because they had all either
Speaker 1: gone out of business or had changed their minds about
Speaker 1: developing a console. So it was kind of open ground.
Speaker 1: And so even though the Sega system wasn't catching on
Speaker 1: big here in the United States, so a lot of
Speaker 1: people in the US were completely unfamiliar with it, there
Speaker 1: was enough demand in other countries for it to be
Speaker 1: a big success. Well, all of that was about to change, well,
Speaker 1: at least the not being in high demand in the
Speaker 1: US part, because in eighty eight they came out with
Speaker 1: the Sega Mega Drive, which in the United States is
Speaker 1: better known as the Sega Genesis. Yeah, and it was
Speaker 1: not only a really popular console, but it was also
Speaker 1: really the first sixteen bit console there was, which is
Speaker 1: probably why it was so popular. Yeah. It was a
Speaker 1: dramatic improvement over the eight bit systems like the Nintendo
Speaker 1: Entertainment System that came before it, and it got the
Speaker 1: jump start on the Super Nintendo, which was another sixteen
Speaker 1: bit system. Yeah. Along with that system, they implemented a
Speaker 1: good marketing strategy. They had really good games, which we
Speaker 1: know is very important for the six US of a console. Yeah,
Speaker 1: you need to have a good launch library. Yeah. This
Speaker 1: is around the time we get Altered Beast. Yeah. I
Speaker 1: watched a long play of that just the other day
Speaker 1: and I forgot how bonkers that game. It is crazy. Yeah,
Speaker 1: it's pretty nuts. If you don't know what we're talking about,
Speaker 1: do a YouTube search for Altered Beasts Sega and uh. Yeah.
Speaker 1: It's all about transforming into various types of monsters as
Speaker 1: you make your way through multiple levels, and it's really hard.
Speaker 1: It's a really hard game. But this gave Nintendo a
Speaker 1: fight because up until that time they had the mark share.
Speaker 1: By nine one, Sega was doing real well both in
Speaker 1: the arcades and in the home console arena. And the arcades,
Speaker 1: they were coming out with three D games like Virtual Racing,
Speaker 1: Virtua Fighter, virtual games. There was virtual Tennis. I remember
Speaker 1: that was all under the Sega label. There is Virtual
Speaker 1: Virtue of Virtuous people now virtually Virtuous, and it's I
Speaker 1: can identify with that. By that time, Sega was in
Speaker 1: forty four countries and they came out with Sonic the Hedge. Yeah,
Speaker 1: kind of their answer to uh to Nintendo's Mario. It
Speaker 1: became like the mascot for Sega. Yeah, and it looks
Speaker 1: like Sonic might outpace Mario. Well you can run really fast, mao. Well,
Speaker 1: Sonic jumps higher. U. Now, Nintendo did gain groundback with
Speaker 1: SNS when it came out. So Sega did a couple
Speaker 1: of moves that would spell to bring for them. One
Speaker 1: was the Sega thirty two X cartridge and the other
Speaker 1: was the Sega c D. Yeah, these were both additions
Speaker 1: to the Genesis. It was an attempt to boost the
Speaker 1: genesis is power and to extend the lifespan of the
Speaker 1: console by giving it additional capabilities beyond the basic system.
Speaker 1: And essentially the company had a couple of choices, right,
Speaker 1: they could have gone down that route to try and
Speaker 1: augment an existing game console, or they could have designed
Speaker 1: the next generation console to have those things built into
Speaker 1: it natively and launched that. They decided to go with
Speaker 1: the augmenting approach, so more more like a computer where
Speaker 1: you would buy a new graphics card for it. Yeah.
Speaker 1: Shortly after, they did also design a console which was
Speaker 1: a whole another problem. Yeah, the Sega Saturn. The Sega
Speaker 1: Saturn in ninety four. Now, Sega Saturn was a really
Speaker 1: big hit in Japan, and at that time they also
Speaker 1: launched things like in door theme parks and the Sega Channel,
Speaker 1: which is a whole story of its own. But Sega
Speaker 1: Saturn big hit in Japan, but not a big hit
Speaker 1: in North America, and the peripherals for the Genesis weren't selling.
Speaker 1: So these three moves are the things that brought Sega
Speaker 1: to the brink. The stuff that would push Sega over
Speaker 1: are yet to come, but this kind of sets the stage.
Speaker 1: So with that in mind, let's take a quick break
Speaker 1: and when we come back, we'll explain a bit more
Speaker 1: about what pushed Sega over the edge. Alright, so we
Speaker 1: mentioned the Sega Genesis and the Purples, or if you prefer,
Speaker 1: the Sega Mega c D system. It was the Sega
Speaker 1: c D in the US, it was the Mega c
Speaker 1: D in Japan. So let's talk a little bit more
Speaker 1: about this peripheral and why it failed to really get
Speaker 1: a lot of traction. This was the peripheral, the additional
Speaker 1: thing for the Genesis that would give it more capabilities.
Speaker 1: The Genesis when it released was a cartridge based system,
Speaker 1: very much like the Nintendo Entertainment System. Yes, s, even
Speaker 1: the Nintendo sixty four that would come out later was
Speaker 1: still cartridge based So what were the thoughts behind going
Speaker 1: to a CD based system? All right, Well, first, the
Speaker 1: Sega c D would allow for full motion video games,
Speaker 1: which sounded good in theory back at the time. Yeah,
Speaker 1: but they were really grainy. Yeah, and a lot of
Speaker 1: them had very little to know gameplay. Let me let
Speaker 1: me tell you about one of them. Sure, I'm the
Speaker 1: famous One night Trap. Have you heard about this one? This? Yeah,
Speaker 1: it started a person who had formerly start on the
Speaker 1: show Different Strokes. Uh. It's about a group of young
Speaker 1: women who are having a sleepover party and you're playing
Speaker 1: a super creepy neighbor I'm guessing who is looking in
Speaker 1: on the home while the women are having their party,
Speaker 1: and there's about a billion masked intruders trying to get
Speaker 1: in there, and you activate a series of traps in
Speaker 1: various rooms to stop the invaders from getting at the
Speaker 1: young women. And I'm talking about like crazy traps like
Speaker 1: people are are. You're watching these guys sneak past a
Speaker 1: wall and you hit a button at just the right
Speaker 1: moment and then a video would play where the wall
Speaker 1: would like rotate around, possibly sending those intruders to their demise.
Speaker 1: You don't really know it was weird. And yeah, full
Speaker 1: motion videos sounded great because you're like, look at the
Speaker 1: amazing technical capability. We can actually show full motion video,
Speaker 1: but it meant that we had to pre record everything,
Speaker 1: so there was very little control, Like you couldn't control
Speaker 1: a full motion video person imperfect motion because that capability
Speaker 1: wasn't there. You would essentially do a choose your own
Speaker 1: adventure kind of approach to games, which meant that there
Speaker 1: was very little gameplay to actually have. Yeah, the CDs
Speaker 1: were supposed to be able to store a lot more
Speaker 1: information than cartridges could. Now on the flip side, you
Speaker 1: had companies like Nintendo saying we don't want to go
Speaker 1: down that path because we feel that the CD format
Speaker 1: is easier to pirate, And in fact, Sega would have
Speaker 1: problems with that as somebody who may or may not
Speaker 1: have come into possession of an enormous folder of pirated discs.
Speaker 1: I know nothing. Yeah, but there are other problems with
Speaker 1: the Sega City beyond being piratable. Yeah, and you're right,
Speaker 1: they could hold more storage. They also had better audio
Speaker 1: because they used an audio D drive not a CD
Speaker 1: ROM for it. But these units were not universal. So
Speaker 1: depending on what version Genesis you got you'd have to
Speaker 1: either get a Sega c D that was compatible with
Speaker 1: that specifically, so some sat like completely underneath and some
Speaker 1: we're on the side of. So that's that's confusing to
Speaker 1: the consumer. Yes, and then all of these peripherals had
Speaker 1: their own power sources, right, so so it's not like
Speaker 1: they even could just take power from the main console.
Speaker 1: You had to plug them in separately. And also it
Speaker 1: meant and I love that you have this note here
Speaker 1: because it's it's a clear problem. It meant that you
Speaker 1: were already limiting your market right because the only people
Speaker 1: you can sell that peripheral to our people who either
Speaker 1: own a Sega Genesis or buying a Sega Genesis at
Speaker 1: the same time, and they just want to have the
Speaker 1: full thing kitted out, which takes a lot of money. Yeah,
Speaker 1: So so you're essentially saying these existing customers I already have,
Speaker 1: I'm trying to up sell those customers, but you're not
Speaker 1: winning new customers with that approach, So you've already limited
Speaker 1: the amount of success you can have that product, as
Speaker 1: opposed to coming out with a brand new console that
Speaker 1: might win not just your existing customers but new customers.
Speaker 1: And that ended up being one of those strategies that
Speaker 1: ultimately would come back to slap them in the face.
Speaker 1: And and we'll get to that because they did design
Speaker 1: a CD console it was a Saturn. But first I
Speaker 1: also want to talk about the thirty two X. It
Speaker 1: was actually made to compete with the Attari Jaguar, and
Speaker 1: I have very little software support. Yeah, which is kind
Speaker 1: of interesting because the Attari Jaguar, it turns out you
Speaker 1: didn't really need to compete against it now and that's
Speaker 1: the only reason I wanted to mention. It was supposed
Speaker 1: to bring arcade quality games to your home. It was
Speaker 1: called three two X because you had the sixteen system
Speaker 1: system and that's cool, but again expensive. You can't really
Speaker 1: enter in if you've got to buy three separate machines
Speaker 1: unless you've got a lot of extra money. And the
Speaker 1: thirty two X only sold six and sixty five thousand
Speaker 1: units globally. It sounds like a lot, but it's not. Also, uh,
Speaker 1: it couldn't quite match the quality of the arcade experience,
Speaker 1: and that was the big selling point, right They were saying,
Speaker 1: this is going to bring the experience you have at
Speaker 1: the arcade into your home, and the reality was it
Speaker 1: wasn't quite good enough for that, and so some of
Speaker 1: the people who bought it felt like they didn't get
Speaker 1: the promise that they were, you know, it wasn't delivered upon. Yeah.
Speaker 1: So then we get the Saturn CD, which we previously
Speaker 1: said did really well in Japan and not so great
Speaker 1: in the US. Yeah. In Japan, it's sold almost five
Speaker 1: hundred thousand units in the first month. But then they
Speaker 1: announced to be three in the US, and they were
Speaker 1: trying to compete with the very new PlayStation and the
Speaker 1: Nintendo sixty four, which we're both already out or just
Speaker 1: about to come out, and so they panicked and they
Speaker 1: announced that the Saturn was coming out six months ahead
Speaker 1: of schedule, and it was going to cost four hundred
Speaker 1: dollars instead of the around eight hundred that it would
Speaker 1: cost you to get basic model from Japan. Yeah, so
Speaker 1: this was an attempt for them to try and steal
Speaker 1: some of that market share away from their competitors, right,
Speaker 1: Like there vastly under pricing the console is one of
Speaker 1: the strategies that a lot of console makers have where
Speaker 1: you sell the console at a loss and you hope
Speaker 1: to make it up in selling titles games. Except for
Speaker 1: they didn't have enough games because they didn't think a
Speaker 1: lot of the Japanese games would translate well to America,
Speaker 1: so those didn't get released in the US. And then
Speaker 1: you've got all of these game developers who are trying
Speaker 1: to program these games for the release of the Sega Saturn,
Speaker 1: which is already a little bit more complicated to program
Speaker 1: for because it used dual CPUs, which is a redesign
Speaker 1: after they found out what the PlayStation specs were. Yeah,
Speaker 1: and so they're rushing to get their games out. And
Speaker 1: Jonathan and I are huge geeks. We've had all these
Speaker 1: conversations about how rushing a game just leads to poor gameplay. Yeah,
Speaker 1: and that was true in this case. And so there
Speaker 1: was poor gameplay, there was a very limited library. And
Speaker 1: then they also didn't adjust their marketing for the gamers
Speaker 1: that were growing up. They were still focusing largely on teenagers. Yeah,
Speaker 1: and as it turned out, the people who grew up
Speaker 1: with games were sticking with games, and if you marketed
Speaker 1: toward them, you tended to do well. And if you
Speaker 1: just kept on aiming for a constantly refreshing young market,
Speaker 1: it didn't do as well. And that really hurts Sega. Yeah,
Speaker 1: I I think the process of making it difficult to program,
Speaker 1: like we've heard that before two. PlayStation three had a
Speaker 1: similar issue because they changed the architecture for the system,
Speaker 1: And if you were working for the company, So if
Speaker 1: you were working for Sega, if you were a developer
Speaker 1: and you worked for Sega, or you were a developer
Speaker 1: and you worked for Sony, you had a better chance
Speaker 1: of developing a decent title for that console. But if
Speaker 1: you're a third party developer, and third parties are the
Speaker 1: ones that are making some of the most popular titles
Speaker 1: out there, certainly, and you in counter this problem, then
Speaker 1: internally you start asking yourself the question, doesn't make sense
Speaker 1: for us to even make a game for the system,
Speaker 1: considering how much time and effort it's going to take,
Speaker 1: Or should we just focus on making titles for a
Speaker 1: competing system where we know we can turn them out faster.
Speaker 1: So it was a whole combination of things, largely on
Speaker 1: Sega's rushed decisions to try and compete more vigorously against
Speaker 1: the PlayStation in sixty four that really set them back well,
Speaker 1: and they couldn't even because this rush deadline also meant
Speaker 1: that their systems were in core supply shortly after they
Speaker 1: announced that their system was coming out early. PlayStation well,
Speaker 1: I guess Sony said, hey, our PlayStation is only two
Speaker 1: hundred dollars and so three nine. So now they're coming
Speaker 1: out early, but they can't compete with PlayStation in price.
Speaker 1: Yea and Nintendo had better games and gameplay, it's more powerful,
Speaker 1: so it was it was like a double whammy. So
Speaker 1: you found a quote from the guy who had was
Speaker 1: CEO of Sega during this time, Tom Kolinski. He had
Speaker 1: an interview and his quote is I'm going to read
Speaker 1: it out verbatim. Had we waited until we had more
Speaker 1: and better games launching with all retailers instead of with
Speaker 1: a few with marketing that could reach every player, we
Speaker 1: would have been much more successful, even if that meant
Speaker 1: waiting for a late October or November launch. So we
Speaker 1: usually put our lessons at the end of Brink episodes,
Speaker 1: but here's a lesson right in the middle of this one,
Speaker 1: which is sometimes being first is not as important as
Speaker 1: being best. Yeah, and I'm sorry. We probably could have
Speaker 1: just said that quote instead of talking for the last
Speaker 1: seven minutes, But then you wouldn't have the Brink. You
Speaker 1: wouldn't have the braink But also around this time, our
Speaker 1: kid Attendant started falling. It didn't help. I mean, we
Speaker 1: still have arcades, but and they do better overseas than
Speaker 1: in the US. But in the US, in the US,
Speaker 1: it used to be a staple, like every mall had
Speaker 1: at least one arcade, and now like there's only a
Speaker 1: few game centers or bowling alleys that that even carry
Speaker 1: video games. So yeah, it's they're few and far between
Speaker 1: in the States. And I believe that at the time,
Speaker 1: Sega was looking at a merger with Bandi, and in
Speaker 1: ninet that was called off, and all of these things
Speaker 1: led to downsizing in layoffs, not surprisingly. Yeah, so they
Speaker 1: really were setting their hopes on the Dreamcast. They really
Speaker 1: thought maybe the Dreamcast system could succeed where the Saturn
Speaker 1: had failed. They really put a lot of work and
Speaker 1: design and the Dreamcast and it showed. But the damage
Speaker 1: had been done already right there. The missteps they made
Speaker 1: with the Genesis peripherals, the missteps with their c D
Speaker 1: system had kind of turned a lot of gamers off.
Speaker 1: They had a bad perception of Sega the company as
Speaker 1: far as hardware as concerned. Yeah, but we're going to
Speaker 1: talk more about that right after this quick break. All right,
Speaker 1: so now we're going to talk about the Dreamcast system
Speaker 1: I still own. I think we own one too. It's
Speaker 1: actually really easy to hook it up because you can
Speaker 1: just hook it up through a coaxial cable to your machine.
Speaker 1: In fact, you could even feed cable through a cable
Speaker 1: system to your game system and then from the game
Speaker 1: system to the television, because I used to do that.
Speaker 1: My my Saga Dreamcast, which I do still own, is
Speaker 1: not currently connected to my television, but it could be.
Speaker 1: It should be, Jonathan, it should be. Well. The Dreamcast
Speaker 1: came out in Japan and ninety nine in the US
Speaker 1: about a year apart from each other, not like a
Speaker 1: few months apart, but about a year. And it was
Speaker 1: a sixth generation console for home by Sega and the
Speaker 1: last one and uh, gamers who got it saw that
Speaker 1: the system was pretty boss. Yeah, people still say that
Speaker 1: it's not everybody. A lot of people say that it's
Speaker 1: one of the best consoles that's been created. It the
Speaker 1: least a toe to toe with the competing consoles on them.
Speaker 1: It was. It was advanced compared to the competing consoles
Speaker 1: on the market. It even I would argue it didn't
Speaker 1: equal the following generation of consoles, but it was pretty
Speaker 1: darn clothes. Well. It was the first one to have
Speaker 1: a built in modem for online gaming, it was the
Speaker 1: first one to do voice recognition for online gaming, and
Speaker 1: it had really great graphics and really great sound. It
Speaker 1: also had that that fish Man game, you know what
Speaker 1: it was man, which is interesting. If you're not familiar
Speaker 1: with it, you should or should not, go look up.
Speaker 1: I can't. I can't even recommend for you to go
Speaker 1: look at a YouTube rio because it's weird. Yeah, if
Speaker 1: if you feel the need to not sleep ever again,
Speaker 1: go look it up. But then they came out with
Speaker 1: really great games, absolutely Crazy Taxi and Jet Grind, radio
Speaker 1: imports of their Arcade games that also we're really great
Speaker 1: on this console, shem You, and Soul Caliber too, just
Speaker 1: to name a few. Yeah, Soul Caliber was probably my
Speaker 1: favorite series. Yeah, and they even won an award for
Speaker 1: the most successful hardware launch in history, and it sold
Speaker 1: over five hundred thousand units in the first week, as
Speaker 1: opposed to the Saturn, which had only sold that many
Speaker 1: in a month. Yeah, so incredibly well out of the gate.
Speaker 1: But unfortunately that was not sustainable. Yeah, because then we
Speaker 1: got the PlayStation two. Yeah, and the PS two ended
Speaker 1: up winning over a lot of people right away. PS
Speaker 1: two is a great machine. I still think the Dreamcast
Speaker 1: is better than the PS but a lot of people
Speaker 1: had already switched over to PlayStation Yeah. There are a
Speaker 1: lot of people who are already in the Sony ecosystem,
Speaker 1: and they thought, oh, well that I already loved this
Speaker 1: game system, I bet this one's going to be it's
Speaker 1: too I bets twice as good. I'm gonna go with that.
Speaker 1: So they stopped making the Dreamcast in two thousand one,
Speaker 1: and support for it ended in two thousand three, and
Speaker 1: games were produced into two thousand seven, over thirty of them.
Speaker 1: But unless you get a really ambitious kickstarter, you're not
Speaker 1: going to get more games. Interesting. I didn't realize they
Speaker 1: were being made even that late. I know that I
Speaker 1: got my Dreamcast after two thousand one, which is when
Speaker 1: they had stopped making the Dreamcast. But you know, I've
Speaker 1: only been around for two years. In the US, you
Speaker 1: had a lot of fans that were making games. You
Speaker 1: had a lot of crowdsourced gotcha games. Apparently it was
Speaker 1: pretty easy to make them for the Dreamcast. It's definitely
Speaker 1: easy to pirate them, not that I would know from
Speaker 1: personal experience. I didn't fired them. I just I just
Speaker 1: got hold of something, and I mean someone I know
Speaker 1: got hold of a whole. Yeah, I just keep digging
Speaker 1: that whole Jonathan um. In March of two thousand one,
Speaker 1: they announced, you know, we're out of console game We're
Speaker 1: just going to focus on software and third party game publishing.
Speaker 1: They did some restructures. The first game they released for
Speaker 1: another competitor was for Nintendo. I feel like this was
Speaker 1: probably what broke the spirit of the company right because
Speaker 1: the Dreamcast, like we said, was truly a revolutionary product.
Speaker 1: It was a good game console, people liked it, and
Speaker 1: yet the company, like the actual hardware, ultimately failed in
Speaker 1: the market. Like it had a great reception and had
Speaker 1: early buzz, but it wasn't able to keep on with that.
Speaker 1: And I think that must have been a very hard
Speaker 1: decision to come to at Sega, to say, listen, we
Speaker 1: gave it our best shot and it wasn't enough. Yeah,
Speaker 1: it even gets a little bit sadder before it gets better.
Speaker 1: They looked at a bunch of mergers. The president of
Speaker 1: Sega at that time of Sega Japan passed away shortly
Speaker 1: after that. He did give seven hundred million dollars to
Speaker 1: the company UM to try to help bolster it's it's success,
Speaker 1: it didn't really help. In two thousand three, they announced
Speaker 1: a merger of Semi Corps, which made Pachinko machines and
Speaker 1: things like that. Yeah, and then Namco said no, we
Speaker 1: want to buy Sega, and then both of those fell through.
Speaker 1: And then a few months later Sammy Corp. Came back
Speaker 1: and bought Sega. But in two thousand twelve they had
Speaker 1: to restructure again, so they cut more jobs, they closed
Speaker 1: multiple branches, and they announced that they would only be
Speaker 1: focusing on developing digital contents so free to play in
Speaker 1: phone apps and things like that. Yeah, far cry from
Speaker 1: the old arcade and console days. Yeah, and then driving
Speaker 1: their existing IPCA Sonic. Sonic still comes out with games
Speaker 1: and people still like them for the most part, so
Speaker 1: they can make some money licensing that intellectual property. And
Speaker 1: since then they've even they've even made a few acquisitions,
Speaker 1: and like I said, there have been some talks of
Speaker 1: a comeback recently. Yeah. So so they continue to make
Speaker 1: games for other platforms, but they haven't shown any sign
Speaker 1: of getting back into the the home console market. Apart
Speaker 1: from there were rumors every few years. Yeah, but I
Speaker 1: heard about something in twenty but I couldn't substantiate it. Yeah,
Speaker 1: so we hear this pretty much every few years, like,
Speaker 1: let's wait till e three and maybe we'll hear another
Speaker 1: announcement of this beloved game company coming up with a
Speaker 1: console again. And honestly, there might be a possibility of
Speaker 1: that happening. You know, we've got the next generation of
Speaker 1: consoles right around the corner. Sony's getting ready with their
Speaker 1: big announcement for the PS five. They've talked a little
Speaker 1: bit about it already. There's always rumors about what the
Speaker 1: next Microsoft console is going to be, So maybe we
Speaker 1: will see another attempt in the future. It is very
Speaker 1: challenging to get into a market that has been dominated
Speaker 1: by three powerhouse players. I think their biggest hope would
Speaker 1: be really banking on those gamers who are now grown
Speaker 1: up in middle aged. All that hurt to say, and
Speaker 1: now have you know, expendable income to relive their fond memories.
Speaker 1: I'm sorry, I can't hear you my elderly ears. I
Speaker 1: was putting myself into that category as well. Jonathan, there
Speaker 1: there are a couple of fun facts. I do want
Speaker 1: to at least say one of them, which is the
Speaker 1: Sega Genesis motto, which is Genesis does wet nintend don't. Yeah,
Speaker 1: now I remember that ad campaign. Yeah, And there's some
Speaker 1: other things we could talk about. We didn't mention the
Speaker 1: infamous game gear. That was a handheld game system that
Speaker 1: Sega came out with, but it was plagued with problems,
Speaker 1: not the least of which was if you wanted to
Speaker 1: play it, you better have a steady supply of batteries
Speaker 1: on hand because it drained those suckers and it took
Speaker 1: like six from That was not the most efficient game
Speaker 1: system out there. And um, yeah, there's there's a lot
Speaker 1: more we could say obviously about Sega, but that was
Speaker 1: the real nut of the problem that they faced was
Speaker 1: that they probably, rather than go with the Sega Genesis peripherals,
Speaker 1: should have thrown more attention and support behind and that
Speaker 1: might have given the Saturn a real chance of success. Instead,
Speaker 1: they kind of confused the market and cannibalize their own sales,
Speaker 1: and then by the time the Dreamcast came around, which
Speaker 1: was again truly an awesome console, they just didn't have
Speaker 1: enough goodwill out there and enough enthusiasm too push them
Speaker 1: hard enough so that when Sony came out with a
Speaker 1: p S two, they could really compete, which is a shame.
Speaker 1: But you know, we don't know what the future holds.
Speaker 1: Maybe we will see Sega return truly from the brink.
Speaker 1: I would say right now, they're still beyond it because
Speaker 1: they're a shadow of what they used to be. But
Speaker 1: who knows. Maybe once they do the Sonic the Hedgehog
Speaker 1: redesign for the movie. Yikes, I've seen some good fan
Speaker 1: art of what the redesign could look like. Yeah, but
Speaker 1: that's fan art, I mean maybe. Honestly, I was surprised
Speaker 1: to see that a company would take that initial reaction
Speaker 1: so seriously as to go that incredible step, because I
Speaker 1: mean that is that that's not a small endeavor to redesign, reanimate,
Speaker 1: re render all of that work, because you figure they
Speaker 1: must be almost done with the movie by the time
Speaker 1: they're releasing trailers, at least a good portion of the movie,
Speaker 1: and then you're essentially deleting the character and reinserting the
Speaker 1: character with possibly with the same animations, but it's still
Speaker 1: a totally different design. Is gonna cause all that rendering
Speaker 1: to back again well, especially after researching this episode and
Speaker 1: talking about Sega. I hope that the redesign is successful
Speaker 1: and that a new generation falls in love with little
Speaker 1: Blue Speedy Hedgehog. Yeah I do too. I hope you
Speaker 1: enjoyed that episode of Business on the Brink. That was
Speaker 1: an interesting show to work on. Big shout out to
Speaker 1: my co host Ariel who I mean, you just don't know.
Speaker 1: She did so much work on that show. She was
Speaker 1: an incredible researcher and organizer and was a joy to
Speaker 1: work with. Uh. We also did large Nerdron Collider together,
Speaker 1: which is currently on hiatus but is planning to come
Speaker 1: back very soon. She's actually on vacation right now with
Speaker 1: her family, so wishing her all the best. Wishing you
Speaker 1: all the best. Hope you are happy and healthy and safe.
Speaker 1: I'll be getting there soon enough. It's just a little
Speaker 1: momping the road and uh yeah, that's it for this episode.
Speaker 1: If you would like to leave me a message, there
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