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Industry History

Through a series of articles, I detail the history of the video game industry in regards to specific companies, consoles, and pieces of hardware.

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In this section I provide in depth reviews of game consoles, past and present, from my own collection. Included are details about the consoles' history, specs, and hi-resolution pictures.

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The History of Sega Part II

Sega's history can be called no less than "epic." It's a tragic tale of the rise and fall of a great company, divided amongst itself. In this series I will outline the history of Sega - from the company's begginnings in the home console market, to it's preceived victory in the 16-bit console wars, right through to the point where internal conflict and a total lack of direction ultimately ended up being the company's near demise.

A Lesson in Console Design

The History of Sega Part IIIn 1987 NEC and Hudson Soft were on the verge of launching a new 16-bit game console in Japan. The console would eventually be called the PC Engine in Japan and would be known in North America as the Turbo Grafx 16. In Japan the console was much hyped, and excitement for a new era of 16-bit gaming was mounting. Sega knew that if they weren't first out of the gate with a new 16-bit game console of their own, they'd be playing catch-up yet again.

Although Sega's battle against Nintendo's NES hadn't yielded even a partial win for the company in Japan or in the United States, Sega's arcade division was still pumping out hit after hit with their 16-bit arcade machines. For this reason it made sense that Sega turn to their arcade hardware division when designing their new 16-bit console. Like all consoles before it, Sega wanted to maintain full backwards compatibility with all of the existing Sega SG-1000 and Sega Mark III games (Sega Master System in the US), while at the same time bringing a true arcade experience home with a home console version of their System 16 arcade hardware.

The new console would be powered by the same Motorola 68000 processor that drove the System 16 arcade machine, though it was dialed back in power slightly from 10Mhz to 7.67Mhz. Like the System 16, the new console was fitted with a 3.58Mhz Zilog Z-80 CPU to maintain backwards compatibility with the former Sega home consoles. This Zilog-Z80 would later see release in Sega's Game Gear color portable console, which would also be backwards compatible with the Mark III and Master System games. To save costs, sound and video chipsets were degraded slightly from their arcade counterparts. While the System 16 could pull from a total of 4096 colors, the new home console's palette would be limited to only 512, which was 448 more colors than the Master System was capable of producing, and 458 more than the NES.

Hardware selected for the system was just the right mix of power and cost. The 68000 CPU ensured that arcade games could easily be ported directly to the console very easily. Sega hoped this would pave the way for System 16 developers to make near-to-the-arcade quality ports for the new system.

The Genesis (Or Mega Drive?) of the 16-bit Console Era

During development of the new console, Sega referred to the console simply as the "Mark V" - strange to say the least since the name "Mark IV" was never assigned to any known Sega hardware platform - development or otherwise. Eventually the console was renamed to the Sega Mega Drive by Sega's CEO Hayao Nakayama; "Mega" referring to the speed of the console, and "Drive" referring to its power. The name was more than appropriate given the processing power of the hardware. Sega's new console would run at a full 7.67Mhz, which was staggering compared to the 1.79Mhz CPU in the Nintendo NES/Famicom, or even the 3.58Mhz Z80 in the Mark III. Though not as powerful on the graphics processing front, the base CPU in the Mega Drive (16-bit 68000 at 7.67Mhz) would even go on to edge out the 7.16Mhz CPU in NEC's PC Engine. Sega was excited about the architecture, and they had good reason to be. If anything was going to de-throne Nintendo on the Japanese and North American fronts, this would be it.

Sega was met with troubles in North America when applying for patents on the new console. Sega has never officially commented on this matter, but many game historians believe that a US-based manufacturer of storage devices called Mega Drive Systems, Inc. was to blame. The result was a renaming of the system in the North American market. Sega chose the name Genesis for their new console in North America, while retaining the name Mega Drive for launches in Europe, Australia, South America, and Asian countries.

Public Release

The History of Sega Part IIThe console was released on October 29, 1988 in Japan, August 14, 1989 in North America, and not until November 30, 1990 in Europe and Brazil. Due to a strong market share of Master System consoles in Europe and Brazil, the Genesis would be produced alongside the Master System for years to come. In Japan and North America, however, where the Master System was not nearly as popular among gamers, it was given a swift death in Japan in 1989 and in North America in 1992. Although Sega initially announced a launch date of January 9, 1989 in North America, they were unable to meet this launch date and it was pushed back to August 14 of the same year. The Sega Genesis was launched in North America at $189.99 suggested retail price with Altered Beast as a pack-in game. The Genesis was $10 cheaper than originally announced, and more importantly $10 less than the competing Turbo Grafx 16.

The initial game titles for the North American Genesis launch were impressive, but few. Sega had the hardware it needed to become successful, and it had the price point, but it needed software. Nintendo still had all of the top developers from Japan under contract from NES development. Under their developer contracts they were not allowed to simultaneously develop games for the NES and another console. They were also not able to release a version of any published game for 2 years after the release date for another console. This meant that a re-release on other console hardware would guarantee a 2-year old game, even if the port was better. Large, successful companies like Capcom and Konami, with brilliant developers and popular games were either forced to wait until their contracts expired, or forced to wait until Nintendo would go on to release its next console some 2 years after the Genesis launch. Sega needed a plan.

The History of Sega Part IISega would ultimately decide to market the console through celebrities by releasing several celebrity-oriented games. Their first big deal was with San Francisco 49ers quarterback Joe Montana. Joe Montana football was released in January of 1991 was immediately successful. Tommy Lasorda Baseball and Evander Holyfield's Real Deal Boxing would be released soon after, establishing the Sega Genesis as the sports game console of choice - a reputation that would follow the console throughout its life as sports fans flocked to it.

A New Mascot

Mr. Needlemouse Concept SketchesUp until the release of the Genesis, Alex Kidd had been Sega's only true mascot. Admittedly, he was a fairly forgettable character that was never really designed with a world audience in mind. Sega CEO Hayao Nakayama called for the creation of a new mascot that would compete with Nintendo's Mario. He wanted the character to be immediately recognizable, not easily forgettable, and specifically "not cute." Several designs and ideas were thrown around internally, and eventually Naoto Oshima's character "Mr. Needlemouse" was selected as a likely candidate. Naoto Oshima and Yuji Naka would evolve the character in to Sonic the Hedgehog. 18 programmers at Sega renamed themselves to Sonic Team and got started on the first iteration of the mega-hit Sonic the Hedgehog.

Tom Kalinske Shakes up Japan

While Sonic the Hedgehog was under development, Sega of Japan took a look at Sega of America and focused in on Genesis sales numbers. The console was selling fairly well, but not nearly as well as they had originally planned. Sega of America's CEO Michael Katz was blamed for poor sales numbers, and was replaced with Tom Kalinske. Kalinske was not new to the gaming industry, and in fact he witnessed the video game crash of 1982 first hand while working at Mattel, makers of the Intellivision. He was known in the industry as a hardball, and was exceptionally good at convincing others to see things his way. Sega knew this, and asked Kalinske to come to Japan, talk with the executives, analyze the current state of Sega in North America, and make recommendations to fix the problem.

The History of Sega Part IIKalinske would do exactly that, and shortly after return to Japan to spell out the changes that he believed would be required to make the console a greater success. First, he suggested that the price point for the Genesis at $190 was much too high. Because the Super NES/Famicom hadn't been released yet, the Genesis was essentially competing against a much cheaper 8-bit console with a huge library of 700+ games in the North American market. Reducing the price of the console would help be it more competitive against the NES, and put it at a huge pricing advantage when the Super NES would be released a year later. Second, he suggested that Sega's marketing of the Genesis was flat, and needed some spice to stir some "friendly competition" between Sega and rivals Nintendo and NEC. Third, he suggested that Sega's upcoming Mario-killer, Sonic the Hedgehog, be a pack-in game with the console, to replace Altered Beast.

The History of Sega Part IIThe Japanese board of directors was furious. "Give away" their new game? Ignore the arcade roots of the console in advertising and marketing? Kalinske reflects:

"They were all talking in Japanese and I didn't have any idea what was going on. When they got to the door, Nakayama said, 'No one in this room agrees with one thing that you have said.' I thought to myself, 'That's nice, it was a short career. I guess I'll go find something else to do.' Then Nakayama said, 'But we hired you to turn this situation around, so go ahead and do what you want and we will fund you.'"

The History of Sega Part IIWith a green light and a blank check, Kalinske flew back to the US and got started. Several famous (and infamous) marketing campaigns would come from this - "Welcome to the Next Level," "Blast Processing," and "Genesis Does what Nintendon't" campaigns would be pushed down young Americans' throats via magazines, TV, and radio in the years to follow. Sega's dark humor and in-your-face advertising quickly made it the "cool kids'" console to have, all the while portraying the Nintendo in a childish light.

Nintendo's Turn to Play Catch-up

The History of Sega Part IIWith all of the marketing hype surrounding the Genesis, Nintendo was now struggling to play catch-up. After resting on their laurels for too long, they needed a 16-bit competitor and fast, as the new, gorgeous 16-bit games were becoming the standard amongst gamers, and NES games looked extremely dated in comparison. Magazines were filled with buzz about the new Nintendo system, named the Super Famicom in Japan, months before its launch. The whole world waited to see what new things the system would offer them, given the massive success of the original NES.

When Nintendo released the final specifications for the Super Famicom hardware, it was obvious that Sega's Genesis had forced Nintendo's hand in the creation of the Super NES hardware. In order to compete with the Genesis, price-wise and in order to be quick to market, cost-cuts and sacrifices in functionality had to be made. Backwards compatibility with the original Nintendo Entertainment System had been scrapped to cut costs. The original Super Famicom design incorporated a Motorola 68000 CPU that ran at 10Mhz - slightly faster than the 68000 CPU in the Sega Genesis. The 68000 processor was extremely popular for game consoles at the time; in addition to the Genesis, the Japanese MSX computer standard, the Neo Geo MVS and AES used it as well. Instead of the 68000, Nintendo opted for a cheaper 3.58Mhz CPU from Ricoh. Third, the system was supposed to originally include a much more powerful on-board processor graphics scaling and rotation. This processor was cut as well.

The Console Wars Begin

Super FamicomThe Super Nintendo was technically superior to the Genesis in many ways, as it should have been having been released two years after the Genesis. Although the SNES' CPU wasn't as fast as the 68000 in the Genesis, the powerful graphics hardware and abundance of video RAM in the SNES made up for some of the processor speed difference. The FM sound hardware was also better in the Super NES, resulting in drastically better music and sound for games that would eventually be released on both platforms. Nintendo still had all of the high-end developers in their back pocket for the SNES launch as well, while Sega was relying heavily on their sports franchises through companies like Electronic Arts, as well as their own first party titles to carry them.

The Super Famicom launched in Japan on November 21, 1990, and was seeing outstanding success amongst Japanese gamers. Sega of Japan decided to go a different route than Kalinske and ignore his advice. The Japanese Mega Drive was still expensive, was still relying on its old marketing tactics, and was falling behind. Soon, the Mega Drive fell behind the NEC PC Engine in terms of sales and popularity, and the release of the Super Famicom was essentially the final nail in its coffin. The console would continue to be produced and supported through 1995, but Sega now knew that a good majority of its income, as well as its future viability, hinged on North America.

The summer of 1991 was soon approaching, and the Super Nintendo Entertainment System had been announced for North American release in August. Just prior to the North American release of the Super Nintendo, Sega would drop the price of the Genesis from $189 to $149 and include Sonic the Hedgehog as a pack-in title. Nintendo went on to release the Super Nintendo with Super Mario World as a pack-in for $50 more at $199. Both consoles were selling extremely well in the United States. Sonic the Hedgehog was an instant hit, and provided gamers would blazing fast gameplay which made Mario look slow and aged in comparison. Still, gamers could not deny the beauty of the SNES launch games, with large sprites and more rich color palettes than the 2-year old Genesis hardware could deliver.

The 16-bit console war was on.


 
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