The death of Sega’s consoles: history’s warning

Sega used to make games consoles. Then it took its audience for granted, and they didn't like it. Now Sega only makes games...

Sega's brilliant-but-doomed Dreamcast

It’s hard to believe now, in a videogame world dominated by Sony, Microsoft and Nintendo, that for one brief period in the early nineties, Sega produced the biggest selling console in the world – the Megadrive, or Genesis as it was known in North America.

It’s similarly hard to believe that, following the success of the second gen console (their first, the Master System, released in 1986, sold comparatively poorly against the hugely popular Nintendo Entertainment System), Sega’s later systems failed to capture the public’s imagination.

The rot set in early on with the Game Gear, released shortly after the Megadrive in 1991. A handheld console designed as a technologically superior answer to Nintendo’s iconic Gameboy, the Game Gear was hamstrung by a bulky, less than portable design and terrible battery life (two hours, at best).

Sega muddied their reputation further with a series of ill-advised and ill-fated expansion units for the Megadrive; the Mega CD and 32X both failed to sell in significant numbers.

Ad – content continues below

Despite these setbacks, Sega fought on, and in 1995 released the Megadrive’s successor, the Sega Saturn. This too, failed to sell outside Japan, and hastened by the popularity of the Playstation, was axed three years later.

Sega’s final console, the Dreamcast (1998) was, initially at least, a success; released more than a year before Sony’s PS2, its early burst of healthy sales (reportedly, half a million consoles in just two weeks) gave the impression that Sega had finally recaptured a reasonable market share. Unfortunately, the arrival of the Playstation 2, and Microsoft’s Xbox shortly after, meant the end for the Dreamcast, and the end of Sega as a console manufacturer – in 2001 the company became a games developer for other platforms, including their former rivals, Sony, Microsoft and Nintendo.

Today’s ‘big three’ console manufacturers would do well to learn from the mistakes that led to Sega’s untimely demise; Sony’s attempt to outdo Nintendo’s DS with superior technology (the PSP) has several disconcerting similarities to Sega’s Game Gear – not least among them the short battery life, the slow sales and lack of games. Its apparently complacent attitude to the Xbox 360 has also hurt initial sales of the PS3 – thanks to Microsoft’s twelve month head start, the 360 has so far sold approximately 17 million units, versus Sony’s more modest 5 million. While it’s highly likely that the PS3 will bridge the sales gap in short order, recent news that Microsoft have finally cracked the normally Sony-loyal Japanese market could be bad news in the long term.

And while Nintendo’s Wii sales have been quite staggering – particularly in the light of the less than astronomical success of the Gamecube – they too, have some lessons to learn. Before the Dreamcast’s eventual death, Sega released a veritable avalanche of peripherals and accessories: lightguns, fishing rods, microphones, maracas, digital cameras, as well as a plethora of other controllers. Sound familiar?

The console market is a continually shifting battlefield, and success in one generation doesn’t guarantee success in the next – even technological superiority over rivals isn’t necessarily vital, as Nintendo has consistently shown. Ultimately, Sega’s fate is an object lesson to other manufacturers, one ignored at their peril.