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Forums - Gaming Discussion - Which competitor is more responsible for the demise of Sega?


Who is most responsible for Sega’s switch to 3rd Party?

Microsoft 5 6.58%
Nintendo 6 7.89%
Sony 65 85.53%
IcaroRibeiro said:
Dulfite said:

and before Microsoft replaces PlayStation as the main Nintendo rival in 7 years after the PS6 tanks out of the gate due to $80 games and no true competition to Gamepass.

You can keep dreaming 

Nah, that's a nightmare. A dream would be ALL PlayStation and Xbox exclusives available on PC day 1 with subscription services for both that save me tons of money. $80 purchases is the nightmare.

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Sega broke its own momentum with infighting and trying to keep the Genesis afloat through add-ons. By the time the Playstation came, they had no real margain to maneouver themselves back from the brink.

You know it deserves the GOTY.

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Back when Sega left the console business, it really looked like Sony caused their downfall.  Now that I've looked into it more I'd say the following companies contributed to Sega's demise in order of greatest to least:

1. Sega (by far the most)
2. Nintendo
3. Sony
4. Microsoft (i.e. not at all, but they are in the poll)

As many posters have said, Sega mostly screwed themselves.  Tom Kalinske was great as the head of Sega's American division, but the heads of Sega in Japan really doomed the company.  The heads of Sega did a lot of things that sabotaged their presence in the American market, and I personally think they were kind of envious of Kalinske's success during the 16-bit years.  The Genesis (Mega Drive) did worse in Japan than the PC-Engine, while the Genesis was extremely competitive with the SNES in the US.  The Saturn actually got some early success in Japan, but it did terribly everywhere else.  The Saturn lost Sega a ton of money, and the Sega-CD and 32X were not executed well either.

However, another factor in Sega's financial problems was the decline and eventual demise of the arcades in the US.  Arcades in the US dried up right around the end of the 20th century.  The Saturn actually lost Sega more money than the Dreamcast did, however Sega's arcade business helped offset a good amount of their losses during the Saturn years.  By the time that the Dreamcast launched, their arcade business couldn't help them much anymore.  In fact, the Dreamcast actually did fairly well for the two years it was on the market, and probably could have done better than the Gamecube and OG XBox if given a normal amount of time for a console's life.  However, it's normal for a console to lose some money the first year, and Sega was not in any position where it could continue to lose money.  Ironically, it seemed like they panicked the last couple of years, and they were doing some desperate things that they normally would not have to do (like drastically cut the price of the Dreamcast).  But anyway, it was a combination of the Saturn, overall mismanagement, and the arcades drying up that doomed Sega.

So, if you want to trace back what lead to the demise of the arcades, it was essentially actions by Nintendo in the NES era.  Games like the first Legend of Zelda could not be made for either the arcade or home computers, and it kind of inspired a whole string of longer action games made for home play.  At the same time it was easier for third party companies to make money on consoles than in the arcades, and the variety of games in the arcades started drying up in the NES era.  (Fighting games made most of the money in the arcades in the 90's.)  So, the decline in the arcades started during the NES era, and it eventually dried up in the US entirely around the time the Dreamcast launched.  That is why I'd say Nintendo contributed to Sega's demise second most after Sega themselves.

So, if I had to pick a competitor that doomed Sega it was Nintendo, but that was due to trends Nintendo started in the NES era, and not due to, say, the performance of the N64 or Gamecube.  Obviously, getting outcompeted by other consoles is a factor too, but if Sony wasn't around, I think Sega would have just gotten clobbered by Nintendo instead.  The biggest factor in Sega's demise was the mismanagement of the company by the heads in Japan.  They made a whole series of bad decisions, but the worst was probably not listening to or backing Tom Kalinske who was responsible for the success of Genesis in America.

super_etecoon said:

I’ve seen quite a few people claiming that the PS2 being a DVD player was a major factor in the success of the PS2 and the failure of the Dreamcast.

The DVD aspect of the PS2 definitely helped PlayStation get to 150 million units, but make no mistake, the PS2 was going to be a 100 million seller just like the PS1 without the add on.

The Dreamcast had a great name, great looking games, and a year head start, but Sega had barely managed to be competitive when they were just up against Nintendo. Adding another player in Sony was the nail in the coffin, especially a competitor that was coming off the runaway success of the best selling home console in history.

The Dreamcast was doing well but sega was to deep in the red already. I was Only a Failure because Sega didnt have the needed financial stability to support it.

As most people have stated, I can really only blame Sega for their demise.

If all competitors were irrelevant selling like 2m consoles a year or something ridiculously low, Sega would still find a way to sell less than them.

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The dreamcast failure was all due to Sega and no one else

I would say Nintendo kind of helped start their decline (though the big N also did themselves no favors in the early 90s), and even slightly lost their lead against Sega in the US until the release of Donky Kong Country kinda sealed the deal for the SNES victory over Genesis there. But Sega had the tough task of having to chip away at a dominant market leader at the time and compete with Nintendo's typically high-quality games. Nintendo also seemed to at least indirectly coax them into a sort of hardware arms race and other projects over software, which brought lots of dead weight to Sega and dragged the company down shortly thereafter. 

Like the protagonist in Genji II, against a Giant Enemy Crab, Sony inflicted "Massive Damage" on Sega by essentially outdoing them in their own game of drawing third parties their way, aggressive price points, and an overall "edgy" gaming philosophy. They also had superior hardware and a massive quantity of games. Basically there was virtually no reason to opt for the Saturn over the PSX..

By the time MS came along, Sega was in its final throes I'd say anyway, but the original Xbox was sort of the final nail in the coffin. There simply wasn't room in the industry for four major consoles/competitors at that point, and Sega was muscled out by the other three.

So it's hard to say as all three companies played a role in the decline and demise of Sega, but Sony probably was the most impactful (and ironically Sega shooting themselves in the foot - that probably is a close second). Microsoft simply sealed the deal. The war against Nintendo was an epic one, and it took its toll, but Sega was still riding fairly high by the mid 90s, especially in America, and could have rebounded if the right moves were made. 


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Sega had already dug their own grave as a console maker. Their shift to a third-party was mostly their own fault, not because of the actions of their competitors. They already were making bad decisions towards the tail end of the 16-bit era, most notably the ill-fated 32X.

But what really got them was the Saturn. They absolutely bungled the launch of the system in the West, their much-hyped "Saturnday" release of Saturday, Sept. 2, 1995 was cancelled in May 1995 at the very first E3, with Sega announcing a surprise release date of "right now." Retailers were caught off guard, and only certain ones carried it. The whole thing was a disaster. It doesn't help that they priced themselves out of competition by launching it for $400, which was an unreasonably high price point in the mid 90s (that's $745 adjusted). As a result, the Saturn had absolutely atrocious sales, pulling in only a bit over 30,000 units in the U.S. in its launch month and about 780k for the entirety of 1995. While it did do better in Japan, that's not saying much.

Not only did the Saturn stall right of the game, the system being difficult to program for arguably made it to where a lot of companies were even less incentivized to make game for the struggling system. While in retrospect the Saturn does get some praise for its games library, it was sorely lacking in big marquee titles that could have drawn significant interest towards the system. Speaking of which, another reason cited in the Saturn's struggles was the cancellation of the first fully 3D Sonic title "Sonic X-treme," leaving the system with no mainline Sonic game, which was a huge loss considering Sonic was b far their biggest franchise. The Blue Blur's only notable presence on the system being a port of 3D Blast, Sonic Jam (a compilation of the Genesis side-scrollers), and the racing game Sonic R.

The Saturn was dead in the water from launch, this despite the PS1 having some struggles itself early on. Nobody was in a rush to buy either system. But while the Saturn never could recover and ended up being discontinued in North America and Europe in 1998, the PS1 quickly built up steam in 1997, but Sony really only filled a vacuum left by the competition. Between Sega's bungling and Nintendo deciding to stick with expensive, low-capacity cartridges, resulting in many devs looking elsewhere to publish their biggest and best games, Sony succeeded simply by not making any huge mistakes. The PS1 was well-marketed and attractive to developers, and as it amassed an ever-larger library of notable titles, especially Final Fantasy VII, more and more eyes were on the rookie, which eventually became the best-selling system of that generation (and of all-time globally at the time, thanks largely to it being the first console adopted en masse in Europe).

By time the Dreamcast was released, the damage had already been done. Despite a good initial reception, a decent launch performance, and some solid games, its sales faltered early despite being the only Gen 6 console on the market until the PS2 was released. The market was already burned big time by the Saturn, and few people outside of dedicated Sega fans and a few other enthusiasts were going to bite. The Saturn's failure all but ensured the Dreamcast would not be Sega's big comeback, and in March 2001 Sega would discontinue the system, leaving the PS2 as the sole Gen 6 system for the next eight months. The Dreamcast might have been a good system, but it was too little, too late.

In conclusion, Sega's demise as a console maker is a story of self-inflicted wounds. Had they made better decisions back in the mid 90s, especially in regards to the Saturn, they likely would have retained much of the good will and momentum they had with the Genesis. It's hard to say how well they could have done had things gone better, but at the very least they might still be making consoles to this day if it weren't for the catastrophe that was the Saturn.


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Sony and SEGA - damn you :)

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Sega of Japan was arguably the worst managed major video game hardware company in the history of the industry. Sega of America was possibly the best managed, at least at that time. Absolutely unforgivably stupid decisions from SoJ are the primary cause of Sega's exit from the console hardware market.

As for competitors, I'd say all three share mostly equal "responsibility" in that they were all doing a better job (MS was already doing a better job than Sega, and hadn't even launched their hardware), leaving no room for a poorly managed company to compete.