Thoughts on the History of SEGA, Part 08

Welcome back, friends!  We’re continuing our look at the history of SEGA.  Last time, we looked at some of the repercussions of the ‘Ninety-Three Senate hearings and one of the many innovations that affected our entire hobby.  This week, we’re going to look at

SEGA wasn’t content with the massive fan-base the Genesis had garnered in North America and Europe.  The Mega Drive, the Japanese equivalent, hadn’t done quite as well in Japan, but it still wasn’t exactly a failure.  Still, it was time to start looking ahead.

European version of the 32X

The first step forward was the 32X, an add-on for the Genesis/Mega Drive that provided powerful visual and aural enhancements.  These were quite welcome, considering the limitations imposed on the SEGA-C.D. add-on; now, with more colors displayed on the screen, full-motion video looked so much better, and thanks to QSound technology, gamers got a near-three-dimensional aural experience through their normal speakers.  It debuted in November of ‘Ninety-four, but it faced a series of problems from the get-go.

For one thing, it was released in North America eight days before the SEGA Saturn was released in Japan, so many North American gamers didn’t really want something that would be supplanted in short order (and the Saturn came to North America in May of ‘Ninety-Five, just six months later).  In Europe, the 32X was initially popular, but only initially.  It quickly started to decline not only because of price, but also because SEGA had started to screw with the customers.

To off-set the steep price a bit, SEGA offered a fifty Pound Sterling rebate on games for it.  However, the vouchers were insanely hard to actually redeem; it must have been deemed by some as simply not worth the trouble.  Was this intentional by the company?  No documents I know of exist to point in either direction, but I’d have to say it’s unlikely.  SEGA’s heads had started to lose “touch” with the customers, and had ever since SEGA of America took North America by storm while the comparable systems somewhat flagged in the home country.

In both Europe and North America, orders for the add-on far exceeded the shipped supply, so there were shortage issues.  Further, to take advantage of the Christmas shopping season, games were rushed into gamers’ hands, which typically resulted in glitchy, downright broken, or at the least incomplete games.  Further, many gamers reported issues relating to the add-on not interfacing well with their Genesis and/or television, so SEGA had to start giving away adapters.

Meanwhile, the add-on was floundering in Japan.  It came out a couple of weeks after the Saturn, so gamers there saw little reason to invest money in what amounted to a half-step backward.

The SEGA Saturn

What didn’t help it in any country was that only six games were released that took advantage of both the 32X and the C.D. add-ons.  Between scant few titles and the fact that purchasing both add-ons wasn’t really something every kid could have afforded to do, it’s not much of a surprise that, initial reaction in North America and Europe notwithstanding, the add-on eventually proved itself to be a critical failure.

SEGA focused everything on the Saturn—interestingly the only one to keep it’s in-house planetary code name.

Now, it had been built with a special focus in mind—every other system SEGA had made had proven popular with only a few markets; the Master Drive, for instance, was popular in Europe; the Mega Drive never really fared too well in Japan; so on and so forth.  With that in mind, the goal was to make a console that would appeal to every gamer in every market.  To this end, it was built with two C.P.U.s and six other processors, plus two graphics chips—and none of it really worked together all that well.

Tom Kalinske was pointed to this problem, and though SEGA of America generally kept out of the hardware side of things, he decided to try and give the higher-ups in Japan a better alternative.  He went to Silicon Graphics, Inc. and met with founder Jim Clark.  The company was developing a chipset Kalinske thought would be a dream, so asked the hardware guys from SEGA to take a look at it.

There were numerous objections—it was too big, it was too wasteful, so on and so forth.  By this point, especially with everything else he’d gone through with the company before this point, Kalinske surely had to feel like a wrongly chastised dog, made worse by the fact that he then had to go back to Clark and tell them SEGA wasn’t interested.  When asked what Clark should do with the thing, Kalinske had mentioned “this other game company up in the Seattle area” whose name “starts with an N” and suggested he take it to them.  Thus was the Nintendo 64 born.

Hayao Nakayama--builder of empires or destroyer?

So you have what would eventually be the Nintendo 64 slipping through SEGA’s hands, and this is after what would eventually be the PlayStation slipped away.  Both of those were attempts by Tom Kalinske to help make the SEGA brand more viable and more powerful.  Both of those were also passed over by Hayao Nakayama.

During his time at SEGA as head of SEGA of America, Kalinske had seen Nakayama, time and again, seeming to wave a hand dismissively at the gamers in Europe and North America—after all, he’d discontinued support for the Genesis around the world, thus handing the sixteen-bit market over to Nintendo on a silver platter.  There were repercussions for this from retailers—when they dumped their supply of Genesis-related products, they did so in favor of the competition, without much shelf room left for SEGA.  Kay-Bee Toys—now KB Toys—refused to even carry the Saturn, though we’ll get to all that when we get back to that console.

As gamers and their American branch alike confessing negative feelings, Nakayama started taking more control over SEGA of America—effectively stripping Kalinske of the power due his position, bit by bit.  Add all of that to the Saturn being rushed to stores, without adequate software, annoying both retailers and third-party developers, most of the latter flocking to the competition.

Tom Kalinske, at odds with Nakayama almost since day one

Enough was enough, and on July Fifteenth, Nineteen Ninety-Six, Kalinske resigned from SEGA.  He ended up taking a lot of the staff with him, including David Rosen.  Later that same year, Nakayama canceled the one title that might have helped the Saturn, Sonic X-treme.

It’s hard to really blame Nakayama—everything he did was actually the very thing to do to help the company and its products in Japan, and thanks to him, the Saturn was the best-received in Japan of any SEGA console, and more software for it was sold than for the PlayStation from ‘Ninety-Five through ‘Ninety-Seven.  Unfortunately, what was the right thing to do in Japan was the worst thing possible to do everywhere else.

While Kalinske had resigned his position, he stayed on the Board of Directors until September of ‘Ninety-Six, where he went on to head LeapFrog Enterprises‘ Knowledge Kids division.

To really examine the potential reasons for Nakayama’s seeming ill-treatment of Kalinske, we’d have to examine the incredible differences between Eastern and Western cultures, politics, and so on, which is almost ludicrously outside the scope of this article.  Suffice it to say, however, that it’s a more complex issue than just one man “taking the fall” for another.

And with that, we turn back to hardware and software—though we’ll get to it next time around, when we look at the hand-helds that were and the ones that might have been.  See you then!


One Response to “Thoughts on the History of SEGA, Part 08”

  1. […] Thoughts on the History of SEGA, Part 08 ( […]

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