Sega’s Top 10 Biggest Business Mistakes

Sega's Top 10 Biggest Business Mistakes

#9 – Being the first (or at least trying)

Sega GenesisIn 1995, a 100 MHz PC was considered to be a supercomputer. In 2009, the power of CPUs have multiplied immensely and are now measured in gigahertz (or GHz); thousands of times more powerful than a computer back in 1995. In short, technology develops at a ridiculously fast pace, and sometimes being the first in line to use newly developed technology isn’t always a good idea.

Sega was notorious for trying to be first, but in the end it was usually labeled a mistake. It first started August of 1989, with the launch of Sega Genesis in North America. By being two years ahead of the Super Nintendo, you’d think that Sega would’ve dominated the 16-bit era because they were first, right?
Not exactly.

In 1991, the Super Nintendo was launched, and within those two short years, the SNES was technologically superior to the Genesis in every way. An extra two years of development offered Nintendo’s new console better sounds, graphics, and colors for their games, all because Nintendo decided to be patient, and wait for the technology to improve before jumping into the 16 bit market. Even though they were first to market, Sega still struggled to reign over the 16-bit consoles in North America, as they only had 55% to 45% market share. In Sega’s defense, that was leaps and bounds beyond the Sega Master System’s market share versus that of the NES.

However, the tale of Sega’s being first doesn’t end there. In an attempt to combat the SNES, Sega wanted to be a major player and decided to launch the Sega CD using newly developed CD-Rom technology. The problem was, the technology was still in its infancy and the Genesis hardware wasn’t up to the task of handling a CD add-on. The full motion videos the Sega CD games were poor quality, showing grainy, unclear footage with lackluster colors. To add insult to injury, most of the games were poorly designed, either being nothing more than interactive movies, or just shit games with “photorealistic” graphics.

Then came the 32x, Sega’s attempt to be the first hardware company to make the jump to the 32-bit generation. To say the least, the games weren’t that great, and it couldn’t hold a candle to the upcoming Sony Playstation or Sega Saturn hardware. Most consumers are smart, and didn’t want to spend their money on something that had only a year lifespan.

And finally, there’s the Dreamcast. Sega again attempted to gather the market first by releasing the Dreamcast before the Playstation 2, Gamecube, and Xbox. Besides being the first console for the upcoming generation, it also boasted itself as trying to be the first to pioneer a stable online gaming service for consoles. However, there were a few key mistakes. One of the major problems was the shortage of supplies. There was such a high demand for the console that Sega couldn’t fulfill all of the advanced orders, thus leaving a bad impression with consumers. The second mistake was hyping SegaNet; much like the SegaCD, Internet gaming for consoles was still too early to market and Sega had a rough launch with the service.

In the end, trying to be first to grab the gaming market has never really helped Sega. Technology develops fasts, and within a few short years things can easily change. Because Sega kept trying to capitalize on technology that wasn’t ready yet, the consoles ended up being a big hole in their pockets.

#8 – The Handhelds

gamegear01withboxjpgIn the early 1990s, the mass market of handheld system was born with the release of Nintendo’s Game Boy. Sporting only a green screen for their games, and bundled with the still-popular “Tetris,” Nintendo became the unstoppable leader in the handheld market within a few short years.

As Nintendo climbed to the top, there were plenty of competitors that attempted to dethrone Nintendo, such as Atari’s Lynx, and NEC’s TurboExpress. However, Nintendo’s rival, Sega, was determined to kick the mighty Nintendo off the hill, with their technologically superior Game Gear, but, in the end, Nintendo won.

There were plenty of mistakes with the Game Gear, and the most obvious one for the first wave of buyers was the battery life. Sega’s handheld took 6 AA batteries, but chewed right through them, and only lasted around 5 hours. Compared to Nintendo’s Game Boy’s use of only 4 AA batteries that lasted over 10 hours, there’s a pretty obvious choice as to which one was better, for not only the kids that were playing but also the parents that we paying. The reason the Game Gear ate batteries like Pac-Man ate pellets was because it used a full color screen, as well as a back-light, providing a full 8-bit, Master System-comparable experience. Cool technology? Sure, but much like any new cool technology, it came with a hefty price; the Game Gear retailed for $150, whereas the Game Boy was only $90.

The other problem with the Game Gear was the games, many of which were ports from the Sega Master System, and that didn’t have an impressive library to begin with. The original games for the Game Gear weren’t that great either, as they couldn’t fight against Game Boy’s mega-franchises including the then newly-introduced, “Pokemon.” Sega even tried to run a hugely negative and cocky ad campaign targeting Nintendo, which included a famous comparison of a Game Boy owners to dogs, because they were both “color blind”.

The only decent thing to say about the Game Gear, was that it came in second place. While numerous handhelds faded into obscurity, Sega’s was still alive and kicking into 1997.

NomadIn 1995, Sega released another portable console called the Sega Nomad. With the Sega Genesis nearing its expiration date Sega was hoping to expand its lifespan just a tiny bit. How? By offering a portable version of the system that could play Sega Genesis games! It sounds impressive on paper, until the same problems of the Game Gear cropped up on the Nomad as well. The price at launch was $180 and much like the Game Gear, it suffered from battery life problems (with some reports saying that they only lasted 2 hours before dying), and rechargeable batteries were not recommended due to voltage differences. Sega tried to remedy this by offering their own brand of rechargeable packs for the Nomad at the price of $80, but the pack still didn’t last as long as regular AA batteries.

Just as the 16-bit era was about to end, and the next generation of consoles was going to be unleashed, Sega dropped the price of handheld by $100 to hopefully salvage what was left. But with its poor timing, numerous problems, and price tag, the Nomad was a failure and Sega’s last attempt to get into the mainstream handheld market.

#7 – Saturn Ads in North America

I don’t know what is with some game companies and putting out weird ads that have little to no relation to their product. Sony did this with their Playstation 3, and, in the past, Sega did the same thing with the Saturn. I’m not going to say much, since I can simply let you see for yourself, courtesy of GameTrailers and YouTube, and you can judge just how bad the ads were.

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12 Responses to “Sega’s Top 10 Biggest Business Mistakes”

  1. 2.o on March 19th, 2009 2:40 pm

    Ohh…. Sonic …. Poor, Poor Sonic


  2. GoNintendo » Blog Archive » Sega’s Top 10 Biggest Business Mistakes- What are you waiting for? on March 19th, 2009 2:47 pm

    [...] Full article here [...]

  3. Maruyama on March 19th, 2009 2:57 pm

    It’s all behind us now. Sega’s finally making a resurgence with HotD: Overkill and MadWorld. All they have left to do is fix Sonic and Sega will be well on their way to becoming a credible developer again. While they’re at it, they need to give us proper sequels to some of their franchises, tah-tah.


    2.o Reply:

    I wouldn’t say they aren’t a credible developer/publisher it…. It’s just they kept trying to “improve” Sonic, but never figured out that he only really works well in 2D


  4. UnitDaGamer on March 19th, 2009 4:15 pm

    let nintendo take a crack at making a sonic game!


    DaveDaGamer Reply:

    You buggin. Nintendo is not about the fans they are anout the $


    Unit Reply:

    They’d still make a hell of a better sonic game than what sega has been doing for the past couple of years! Nintendo already translated some of their 2d games to 3d successfully, Mario, Metroid, Zelda, Donkey Kong, Mario Kart etc. so i think they’d know what they were doing. And if you say nintendo isn’t about the fans, than neither is Sega. Time and time again the fans have all cried out to sega to give us a proper Sonic game or atleast one that doesn’t feel like crap but yet we get what you see today.


    2.o Reply:

    I mean it’d never happen, but I’d be interested to see what they did with it. Unfort. they wouldnt be smart enough ti switch back to the 2D style, they’d try and do something “creative” with it. The funny thing is, they’d prob. figure out how to make it work.


  5. R J on March 20th, 2009 4:11 am

    Say what you want

    But I still consider my dreamcast to be one of the best consoles I have ever bought.

    Best sonic game ever was Sonic Adventure 2, Shenmue 1 and 2, Crazy Taxi, Jet Grind Radio.

    These games made my childhood so happy.


  6. GagaMan on March 20th, 2009 5:27 am

    The Dreamcast didn’t need a bunch of franchise rehashes, it created a whole bunch of new ones: Samba de amigo, shenmue, space channel 5, Jet Set Radio, MSR etc. How can someone even have an opinion on a console they didn’t even buy?

    Also: Sega Net was the first successful online gaming service for consoles. It was an early X Box Live, so it was quite innovative. Being the ‘first’ to do something isn’t a bad thing, you know. I’ll give you the 32X though, that was a huge mistake.

    Sega bashing is getting so old now. Everyone makes mistakes, including Nintendo with it’s Virtual Boy.


  7. MarkyX on March 20th, 2009 6:16 am

    “The Dreamcast didn’t need a bunch of franchise rehashes, it created a whole bunch of new ones: Samba de amigo, shenmue, space channel 5, Jet Set Radio, MSR etc. How can someone even have an opinion on a console they didn’t even buy?”

    Yes they did create new franchises but they weren’t games good enough to make purchasing the console worthwhile. They were also more designed for the Japanese audience rather than Americans. Don’t get me wrong here; the Dreamcast is a great system, but people vote their wallets and in the end, the Dreamcast’s library of games didn’t cater to their market well enough to survive.

    “Sega Net was the first successful online gaming service for consoles. It was an early X Box Live, so it was quite innovative.”

    Not sure if successful the right term. It was workable, no doubt, but from a business standpoint it didn’t make much sense. Sega was literally giving away dozens and dozens if not hundreds of hours with their generosity. Coupled with the broken promises about the rebates and you can have a mixed bag. I was surprised they made these decisions because it was due to Sega’s generosity that killed Heat.Net


  8. pure nintendo » Blog Archive » Sega’s Top 10 Biggest Business Mistakes » freshly-squeezed on March 21st, 2009 5:19 pm

    [...] Full Article HERE [...]

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