In 1989, Nintendo was at the height of its fortune and fame, enjoying a near monopolistic hold of the videogame console industry. As we saw in Chapter 2.1, the Nintendo Entertainment System had overcome the skepticism of American retailers still reeling from the Great Videogame Crash. With a combination of hit games, cheap technology, and effective (if controversial) licensing policies, Nintendo had not only resurrected the moribund industry, but greatly expanded it, defining an entirely new generation of gamers. Competing with this behemoth would take great technology, slick marketing, and a lot of patience.
Sega had two of these qualities.
With Nintendo’s dominance firmly established, Sega ramped up the hyperbole in ads for the Genesis, emphasizing its graphics and edgier games. To brand the platform, Sega used its now-familiar “Sega!” shout along with the 16-bit era’s most memorable marketing tagline: “Genesis does what Nintendon’t,” shown here in a multipage ad from the June/July 1990 premiere issue of Sega Visions.
While it doesn’t reach quite as far back as Nintendo’s humble nineteenth-century beginnings, Sega’s history is no less storied. Although best known for their Japanese operations, the company that would later become Sega was born among the beautiful palm trees and beaches of Honolulu, Hawaii. In 1940, just a year before the Japanese attacked Pearl Harbor, American businessmen Martin Bromley (originally Martin Jerome Bromberg), his father Irving Bromberg, and James Humpert started Standard Games to provide jukeboxes, slot machines, mechanical peep shows, and other coin-operated amusements specifically to the United States military. Irving Bromberg had been in the “penny arcade” business since the early 1930s, peddling his wares along the West Coast. Bromley and Humpert had found employment with the US Navy shipyard at Honolulu, providing both with invaluable contacts and marketing opportunities, particularly for their slot machines.
A federal “moral” ban on interstate shipment of slot machines in 1950, however, caused a sharp drop in the number of such devices operating within the United States and its territories. As a result, in 1952 the company began importing machines into the fledgling post-war Japanese market under a new company name, Nihon Goraku Bussan, which marketed its products under the Service Games banner.
Disney’s Aladdin running on the Fusion emulator.
Disney’s Aladdin (1993, Sega)
It’s not easy to make a compelling platform game based on a movie license. In many cases, they amount to little more than re-skinned versions of games that were mediocre to begin with. Virgin Games USA, however, raised the bar, not once, but three times, with McDonald’s Mick & Mack as the Global Gladiators (1992), and 7UP soda’s Cool Spot (1993). Not only did David Perry and his team of developers rise to the challenge with these games, they created two of the best platformers of their generation. However, Virgin Games USA would outdo itself with the third game when it teamed up with Disney’s actual animators for Disney’s Aladdin. The well-tested game engine, experienced development team, and Disney’s genuine interest in actively participating in the game’s creation all came together to create a true-to-the-movie 16-bit platforming experience quite unlike any other. The musical compositions of composer Donald S. Griffin even helped push the Genesis’ sound hardware to new heights! If you like this game, check out some of the Genesis’ other classics from its long list of licensed platform games, including World of Illusion Starring Mickey Mouse and Donald Duck (1992), with compelling cooperative gameplay between the title characters, and Taz Mania (1992), whose unforgiving difficulty is tempered by its enchanting cartoon-quality graphics and sound.
New York native, David Rosen, stationed in Japan during the Korean War, found similar opportunities there. After finishing his United States Air Force service term in 1952, Rosen remained in Japan, where, in 1954, he started Rosen Enterprise, Inc., to sell Japanese art to the American market, as well as create hundreds of Photorama photo studios for Japanese identification cards. In 1957, as the Japanese leisure market grew, Rosen changed strategy and began importing American coin-operated electro-mechanical amusement machines, placing them at his Photorama and additional retail locations.
In 1964, Rosen and Nihon Goraku Bussan began serious discussions about a merger, with the former bringing distribution and the latter bringing manufacturing expertise to the table. In 1965, the two companies merged under Sega Enterprises Ltd., an amalgam of the best known brand name between them, Service Games. Rosen became CEO of the new company.
As described in Chapter 1.1, Sega’s history of arcade innovation began shortly after the merger with the Rosen-designed electro-mechanical breakthrough Periscope in 1966, followed by several other innovative arcade games. In 1969, Rosen sold the company to Gulf+Western, remaining as CEO of the Sega division. In 1972, Sega Enterprises became a subsidiary of Gulf+Western and went public. In 1982, Gulf+Western sold the US assets of Sega Enterprises to Bally Manufacturing Corporation. Hayao Nakayama—who headed Sega’s Japanese operations after they acquired his former company, Esco Boueki—became the new CEO. Rosen led the US subsidiary.
By the early 1980s, after successfully licensing and developing their arcade games for various home systems, Sega tried their hand at a console of their own: the SG-1000. Similar to the ColecoVision, the SG-1000 was released in Japan on July 15, 1983, the same day as Nintendo’s Famicom. The SG-1000, the restyled SG-1000 II, and its computer variant, the SC-3000, sold reasonably well in its target Asian, Australian, and European markets. However, the platform never threatened the staggering sales figures of Nintendo’s legendary console. Only in the arcades did Sega truly shine.
In March 1984, Japanese conglomerate CSK Holdings Corporation, led by Rosen and Hayao Nakayama, bought Sega’s Japanese assets. The company was renamed Sega Enterprises Ltd., and was publicly traded on the Tokyo Stock Exchange. Rosen’s friend and CSK chairman, Isao Okawa, became chairman of Sega. Rosen chose to remain in the United States and would later set up Sega’s US operations.
Shown are several variations of Sega’s SG-3000 computers from different regions. The SG-3000 computers and SC-1000 consoles gave Sega valuable experience that they further honed with the Master System before putting it all together with the Genesis.
On October 20, 1985, Sega released the SG-1000’s backwards-compatible successor, the Mark III, which featured improved graphics hardware and more RAM. A redesigned version of the Mark III, with a revamped cartridge port and additional sound chip, the Yamaha YM2413, was released in North America in June 1986 as the Master System. This enhanced version of the system was released back to Japan with mostly cosmetic differences in October 1987.
Even though Sega of America, led by Rosen, was established in 1986 in Los Angeles as a wholly owned subsidiary of Sega Corporation of Japan, it didn’t make breaking into the US videogame market any easier. Following Nintendo’s example of partnering with a toy company to help them break into the American market, Sega made its bed with Tonka, best known for their toy trucks. Unfortunately, the Tonka partnership was not particularly successful. Like Nintendo, Sega decided in 1989 they’d be better off alone.
While the Master System was technologically more sophisticated than the Nintendo Entertainment System, Nintendo hoarded the best third-party software with its questionable exclusivity agreements. Sega had to be content with battling Atari for whatever scraps were left. Sega’s relative failure with the Master System did, however, allow them to beat Nintendo to the next generation with a 16-bit successor, a luxury Nintendo couldn’t afford. For Nintendo, it just didn’t make sense to cannibalize a platform with over 90 percent market share in the US, not to mention an incoming portable requiring considerable corporate attention (see Chapter 2.4).
The Sega Master System was packed with features and expansion options, but failed to make much of a dent against the Nintendo Entertainment System in worldwide sales.
Greatest Heavyweights running on the Fusion emulator. Greatest Heavyweights (1994, Sega) Starting with their earliest arcade videogames in the 1970s, right through to the numerous creations into the 1990s for their home consoles, Sega has had a long love affair with the sport of boxing. Despite this storied history, it was only after refining the foundation of their 1992 hit, Evander Holyfield’s “Real Deal” Boxing, itself a port of an earlier computer game,5 that Sega properly returned the affection and captured the true essence of the sweet science. Greatest Heavyweights challenges players to create a boxer that can go toe-to-toe with 30 original boxers, as well as eight legends who act exactly as you’d expect them to in the ring. Michael Buffer announcing (“Let’s get ready to rumble!”), instant replays, and detailed punch stats all add to the incredible audiovisual presentation that’s almost as much fun for spectators as it is for players.
Released in Japan on October 29, 1988, where it was known as the Mega Drive, the Genesis wouldn’t see release in the US until August 14, 1989, with initial roll-outs restricted to the New York City and Los Angeles areas at a retail price of $189.99. NEC’s TurboGrafx-16 Entertainment SuperSystem, which had a similar initial roll-out period starting on August 19, 1989, retailed for $199.99. The Genesis would see wide release in North America one month later, on September 15, 1989. The 16-bit console generation was officially underway.
Although the TurboGrafx-16 could display more colors than the Sega Genesis thanks to its dual 16-bit graphics chipset, its overall design, complete with 8-bit microprocessor and two button controller, was meant to soundly beat the Nintendo Entertainment System, not go toe-to-toe with the Genesis, or, eventually, the Super NES. As a result, Sega pulled no punches when highlighting the TurboGrafx-16’s perceived deficiencies in its early advertising. NEC didn’t help the situation with its reluctance to export its best Japanese titles or its occasionally heavy-handed localization censorship when it did. As if all of these disadvantages weren’t enough, a series of controversial commercials—one with boiling goldfish, another with cats bouncing off the wall— aroused public indignation. As a result of all of this and lacking both Sega’s arcade catalog and still having to deal with Nintendo’s third-party exclusivity deals, it was difficult for NEC to compete effectively in the US with its paltry library. This despite incredible popularity in NEC’s home country, a territory where, along with Nintendo after the release of its Super Famicom (Super NES in North America) on November 21, 1990, it helped relegate the Genesis to a distant third place finish.
While the Genesis faced stiff competition in Japan from NEC, in North America and Europe it was top dog for several years before Nintendo’s Super NES finally began closing the gap a few years after its North American release on August 23, 1991. However, Nintendo’s plodding tortoise never did manage to overtake Sega’s hedgehog outside of Japan.
By 1993, even with the dominance of Nintendo’s Game Boy, Sega still commanded almost 40 percent of the US game industry, to Nintendo’s 51 percent.6 Worldwide, with dominance in other territories, like Europe and South America, those figures tilted even more in Sega’s favor, at close to 50 percent market share. In fact, despite the release of several newer and more powerful competing consoles along the way, Sega continued to sell its aging Genesis technology for several more years, despite muted responses to the Sega CD and 32X add-ons meant to extend the core console’s commercial relevance. It took several years past the late 1994 Japanese releases of Sega’s own Saturn and, critically, Sony’s PlayStation (see Chapter 3.2), before the market truly embraced a new generation of systems.
Excerpt from Vintage Game Consoles by Bill Loguidice and Matt Barton © 2014 Taylor & Francis Group. All Rights Reserved.