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The Sega Dreamcast
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Sega was a victim of the Dreamcasts success. They lost money on every console sold, didn't make it back on the software, and spent too much money on things like Shen Mue.
This is a pretty solid summary. Part of why they didn't make their money back on software was because of how easy it was to copy and share. It didn't help that they had alienated so many 3rd party devs by prematurely abandoning platforms so many times. They stuck with the Genesis for a long time, trickled out 32X and CD add-ons and only put out a handful of games for those, released and immediately ditched the Saturn, and then didn't go as all in on the Dreamcast as they probably should've. At least they knew to cancel the Neptune, which was just gonna be a standalone 32X.
They should've not done the CD and 32X and instead dumped those resources into getting the Saturn out like a year earlier. Then they could've taken their time building that library, and then go all in on the Dreamcast, bringing lots of 3rd party support that happily made money off of betting on the Saturn. But hindsight is 20/20.
People tend to lump in the Sega CD with the failed systems, but it was actually the most successful console add on ever, supporting over 200 games.
This was part of the problem with the 32X. Sega USA ran with the CD and turned it into a success when Sega Japan didn't want it. When Japan was prepping for Saturn, US demanded the 32X and when Japan said "no", US said "yeah, well, look at Sega CD, what do you know?" Sega USA arrogance willed the 32X into existance and, well, you know the rest.
Guitar Hero sold more, but how many games USE the guitar? 4? 5?
I guess that goes to show how "Most Successful Console Add-on Ever" isn't that prestigious of a title! Haha
The CD and 32X were effectively just life support to keep the Genesis alive while Nintendo put out a whole new generation of console. Sega could've leapfrogged Nintendo's SNES if their follow-up to the 16-bit cartridge based Genesis and competitor to the 16-bit cartridge based SNES had been the 32-bit disc based Saturn, but in 1993 instead of 1994-95. "Nintendo just caught up to what we're leaving behind." Video game history would be incredibly different. Nintendo would've maybe lost a significant amount of market share to Sega. Sony might've stayed out of it or at least would've had real disc competition. Sega might've stayed in the hardware game, which maybe would've kept Microsoft from entering since there's no vacuum to fill. This might've affected PC gaming too since devs could basically double dip their work to put out very similar games on both PC and Xbox.
Sega CD was successful in that it kept Sega players from jumping over to buying a SNES. Idk how that worked though because an entire SNES was cheaper than the Sega CD add-on. They could only sell games to people who had already bought a Genesis AND shelled out a SNES and a half worth to keep it relevant. If you didn't own a Genesis or a SNES and you're at Circuit City or whatever looking at them, it's kinda hard to not choose the SNES. Genesis was $150 while the SNES was $200, sure, but the SNES was new and polished while the Genesis was already 2 years old AND they felt the need to release a $300 add-on to keep up with the SNES. So if you're trying to get your money's worth, you could either spend $300 on a SNES and a couple of games, or you could spend about the same for an older console and maybe one or two extra games, or you could dump $450 (equivalent to $1,019 in 2024) and still not have any games. So how in the fuck did the Sega CD succeed? Sega was just really good at marketing, I guess.
They dug their own grave with the 32x and Saturn. The Dreamcast was the final blow.
The 32X was a disaster and it was bred from a conflict between Sega USA and Sega Japan.
In the US, the Sega CD had been a HIT. Japan wanted to drop it, US said "we'll take it!" and it ended up being the #1 peripheral with more games for it than any other console add on ever. Over 200 games.
So when Sega Japan wanted to get the Saturn rolling, Sega US demanded a stop gap between the Genesis and Saturn. Japan resisted, and US went "Yeah, well look at Sega CD, what do you know?" and went with the 32X.
From the start, Japan wasn't interested, did everything to ignore the product and effectively killed it.
In retaliation, US chose to launch Saturn several months too early. I think they knew going head to head with the Playstation was a death sentence, so they dropped it 5 months early to "select retailers".
This had 2 problems:
https://youtu.be/ubJSL5GhSZU