How a Number Launched the PlayStation and Nearly Killed Sega
video description
Date: 2023-12-10
Related videos
Comments and reviews: 30
polygon
The main reason Sony was able to get away with the releasing the PlayStation at that price and still be profitable on it was because PlayStation was a product made in house, not outsourced like what Sega did with Saturn. You see, the only way for Sega to have been able to make a CD based machine was to outsource such tech from companies that were capable of producing such technology. In Sega's case, by buying from Hitachi and JVC, those companies were the one's profiting off the Saturn on each unit sold because of royalty expenses while Sega themselves were losing $100 off of each unit being sold at the price point of $399 when it was originally supposed to be $499. Sega had a habit of selling hardware at a loss hoping software royalties would make up the difference.
Nintendo knew of the benefits of CD Media, but they were also aware of how expensive a CD based system in their case would be. And Nintendo has a History of not wanting to sell expensive hardware; especially if it was at a loss for short term gains like Sega and others before them did. So you see, that is the main reason Nintendo didn't jump the gun like Sega and others before them did and adapted to CDs. Not JUST because of how expensive it would be trying to sell it, but also the expensive royalty fees involved on each unit that would've been sold with Nintendo's name on it. N64 in Nintendo's case was a product made in house. The only royalty fee they to pay was a $10-$15 for each unit sold because of the Silicone Graphics 3D Chip Set. Other than that, Nintendo was reeling in the dough big time that generation despite the misconceptions; not just from their home console market, but the handheld market too!
reply
The main reason Sony was able to get away with the releasing the PlayStation at that price and still be profitable on it was because PlayStation was a product made in house, not outsourced like what Sega did with Saturn. You see, the only way for Sega to have been able to make a CD based machine was to outsource such tech from companies that were capable of producing such technology. In Sega's case, by buying from Hitachi and JVC, those companies were the one's profiting off the Saturn on each unit sold because of royalty expenses while Sega themselves were losing $100 off of each unit being sold at the price point of $399 when it was originally supposed to be $499. Sega had a habit of selling hardware at a loss hoping software royalties would make up the difference.
Nintendo knew of the benefits of CD Media, but they were also aware of how expensive a CD based system in their case would be. And Nintendo has a History of not wanting to sell expensive hardware; especially if it was at a loss for short term gains like Sega and others before them did. So you see, that is the main reason Nintendo didn't jump the gun like Sega and others before them did and adapted to CDs. Not JUST because of how expensive it would be trying to sell it, but also the expensive royalty fees involved on each unit that would've been sold with Nintendo's name on it. N64 in Nintendo's case was a product made in house. The only royalty fee they to pay was a $10-$15 for each unit sold because of the Silicone Graphics 3D Chip Set. Other than that, Nintendo was reeling in the dough big time that generation despite the misconceptions; not just from their home console market, but the handheld market too!
reply
-vh9network
Wrong, the SEGA CD was not an expansion to extend the life of the Genesis. The 32X was the expansion meant to be stop-gap extension for Genesis.
The SEGA CD was a companion to Genesis much like the Famicom Disk System is a companion to the Famicom (NES.
You should have explained why investment into CD-ROM technology was critically important for the 3rd generation consoles. SEGA was following NEC's lead which was taking on Nintendo strong in the East with it's PC-Engine CD (TurboGrafx CD.
Nintendo too was preparing for potential CD-ROM battle which is why they initially partnered with SONY for their Super Famicom Disc system. That deal failed resulting in Nintendo venturing with Philips which is how we got the CD-i 450 system.
It is SONY's failed venture with Nintendo, that pushed them to get into the console market, thus their entanglement with SEGA began, initially as a partner (this is where you could highlight SONY's CD software publishing for SEGA CD, and then refusal by SEGA to partner with SONY led to SONY doing the PlayStation on it's own.
The icing blow to SEGA was the $299 price tag SONY undercut after waiting for SEGA to release their details on the Saturn.
reply
Wrong, the SEGA CD was not an expansion to extend the life of the Genesis. The 32X was the expansion meant to be stop-gap extension for Genesis.
The SEGA CD was a companion to Genesis much like the Famicom Disk System is a companion to the Famicom (NES.
You should have explained why investment into CD-ROM technology was critically important for the 3rd generation consoles. SEGA was following NEC's lead which was taking on Nintendo strong in the East with it's PC-Engine CD (TurboGrafx CD.
Nintendo too was preparing for potential CD-ROM battle which is why they initially partnered with SONY for their Super Famicom Disc system. That deal failed resulting in Nintendo venturing with Philips which is how we got the CD-i 450 system.
It is SONY's failed venture with Nintendo, that pushed them to get into the console market, thus their entanglement with SEGA began, initially as a partner (this is where you could highlight SONY's CD software publishing for SEGA CD, and then refusal by SEGA to partner with SONY led to SONY doing the PlayStation on it's own.
The icing blow to SEGA was the $299 price tag SONY undercut after waiting for SEGA to release their details on the Saturn.
reply
-22RiaKon22
About the end of the vid. Sony learned the hard way, but they at least acknowledged their mistake - pricing PS4 at 399. Let's hope they did not forget the lesson with PS5. The console CAN be more expensive. After all, inflation did a terrible job on that 1994 price tag - now being $517. 29 value. Also we need to account the revolutionary SSD technology being added to the system. I think 399 would be a safe spot, but with their leading position, they can risk 499. So let the main Blue-Ray version be 499 and take a bigger cut with the digital version - the revenue will return with subscription and direct digital game purchases.
It's estimated that the digital PS5 will sell 1: 4-1: 5, comparing to the classic version. Next generation, the ratio can be 1: 1, if customers grew to love the digital service. And than the next gen (we're talking 2035 now, you can ship with digital being the main console or even the only one - that's how you make progress without making your customers angry. Make them see the value without forcing, make them want it.
reply
About the end of the vid. Sony learned the hard way, but they at least acknowledged their mistake - pricing PS4 at 399. Let's hope they did not forget the lesson with PS5. The console CAN be more expensive. After all, inflation did a terrible job on that 1994 price tag - now being $517. 29 value. Also we need to account the revolutionary SSD technology being added to the system. I think 399 would be a safe spot, but with their leading position, they can risk 499. So let the main Blue-Ray version be 499 and take a bigger cut with the digital version - the revenue will return with subscription and direct digital game purchases.
It's estimated that the digital PS5 will sell 1: 4-1: 5, comparing to the classic version. Next generation, the ratio can be 1: 1, if customers grew to love the digital service. And than the next gen (we're talking 2035 now, you can ship with digital being the main console or even the only one - that's how you make progress without making your customers angry. Make them see the value without forcing, make them want it.
reply
-MrFullbladder
I find it interesting that you said SOA led the development of the 32X while SOJ led the development of the Saturn.
From my memory of reading Console wars as well as interviews with Kalinsky he was shown the 32X when being pursued to take up the job at SOA after leaving Matel, years before events stated in the video.
He said that he didn't want to launch it, or the SEGA CD.
And from all the interviews from SEGA staff, books, and articles that I've read around this period stated that SOJ worked solely on on hardware development and handed it to SOA when completed. Often (as in the case of the Saturn) much to the despair of the SOA team.
They even tried to get Silicon knights onboard with an early version of what became the N64, but SOJ flatly refused. As well as a deal with Sony to have the architecture of the PS1, with a deal on publishing games on the shared platform under the SEGA brand.
reply
I find it interesting that you said SOA led the development of the 32X while SOJ led the development of the Saturn.
From my memory of reading Console wars as well as interviews with Kalinsky he was shown the 32X when being pursued to take up the job at SOA after leaving Matel, years before events stated in the video.
He said that he didn't want to launch it, or the SEGA CD.
And from all the interviews from SEGA staff, books, and articles that I've read around this period stated that SOJ worked solely on on hardware development and handed it to SOA when completed. Often (as in the case of the Saturn) much to the despair of the SOA team.
They even tried to get Silicon knights onboard with an early version of what became the N64, but SOJ flatly refused. As well as a deal with Sony to have the architecture of the PS1, with a deal on publishing games on the shared platform under the SEGA brand.
reply
-82Jaster
Sega Japan in particular seemed to be the one that really screwed Sega as a whole over. During the Genesis days they ended up running Yuji Naka out after the completion of the original Sonic, but they lucked out because Mark Cerny had become friends with him and managed to convince him to join his team at Sega Technical Institute in the US. And even though Streets of Rage was a big success, Sega of America had to convince the Sega Japan to put a sequel into development. They eventually did although they outsourced the development to Ancient (Yuzo Koshiro's company. And specifically about Sega and Sony, Tom Kalinski had actually convinced Sony to go in with Sega on a console but Sega Japan killed the idea. Kalinski also had the idea for Sega to work with Silicon Graphics, the company that would end up helping Nintendo with the N64. But Sega Japan killed that idea as well.
reply
Sega Japan in particular seemed to be the one that really screwed Sega as a whole over. During the Genesis days they ended up running Yuji Naka out after the completion of the original Sonic, but they lucked out because Mark Cerny had become friends with him and managed to convince him to join his team at Sega Technical Institute in the US. And even though Streets of Rage was a big success, Sega of America had to convince the Sega Japan to put a sequel into development. They eventually did although they outsourced the development to Ancient (Yuzo Koshiro's company. And specifically about Sega and Sony, Tom Kalinski had actually convinced Sony to go in with Sega on a console but Sega Japan killed the idea. Kalinski also had the idea for Sega to work with Silicon Graphics, the company that would end up helping Nintendo with the N64. But Sega Japan killed that idea as well.
reply
-helloken
Sony did -learn their lesson-, it's just with the PS3, $499/$599 was the best they could possibly do as the PS3 was so expensive to produce, they were losing hundreds on each system sold. PS3 was a MESS, yet somehow Sony survived and didn't give up the console market lead to Xbox as they caught up even in that generation towards the end.
Honestly this was the last time any competitor had a chance to take the market lead from Sony that they have had since the PS1, and Xbox just was not able to do it. The PS3 was extremely expensive to produce, and hard to develop for from what I understand. Sony slowly fixed as much as they could about the PS3 over it's lifetime then moved on to the PS4 which was a much better design and a big success for Sony.
reply
Sony did -learn their lesson-, it's just with the PS3, $499/$599 was the best they could possibly do as the PS3 was so expensive to produce, they were losing hundreds on each system sold. PS3 was a MESS, yet somehow Sony survived and didn't give up the console market lead to Xbox as they caught up even in that generation towards the end.
Honestly this was the last time any competitor had a chance to take the market lead from Sony that they have had since the PS1, and Xbox just was not able to do it. The PS3 was extremely expensive to produce, and hard to develop for from what I understand. Sony slowly fixed as much as they could about the PS3 over it's lifetime then moved on to the PS4 which was a much better design and a big success for Sony.
reply
-VioletteLundsten
I liked this video but I think the US vs Japan SEGA disconnect gives much less credit to SEGA of America than they deserve. They were doing better with the Genesis than Japan was with the Mega Drive and so their stop gap solution did make a lot more sense from that point of view, they wanted to expand on the success. If the games were better on 32X and Saturn was delayed or cancelled due to Neptune, SEGA could have had a strong place in the market due to their massive Genesis/Mega Drive install base. With Japan pushing ahead with the expensive Saturn though, 32X was dead on arrival. the Playstation price and surprise launch did not help. Also even a single Sonic 3D platformer on any of these machines would have helped. a lot!
reply
I liked this video but I think the US vs Japan SEGA disconnect gives much less credit to SEGA of America than they deserve. They were doing better with the Genesis than Japan was with the Mega Drive and so their stop gap solution did make a lot more sense from that point of view, they wanted to expand on the success. If the games were better on 32X and Saturn was delayed or cancelled due to Neptune, SEGA could have had a strong place in the market due to their massive Genesis/Mega Drive install base. With Japan pushing ahead with the expensive Saturn though, 32X was dead on arrival. the Playstation price and surprise launch did not help. Also even a single Sonic 3D platformer on any of these machines would have helped. a lot!
reply
-pgr3290
Sony's machine was cheaper than the Saturn, had better 3D hardware which was where the industry was always heading, easier and cheaper to work with for developers, marketed much more clearly and so ended up with lots more and better games. They aimed their machine at the kids that had grown up on the NES and other systems 6-7 years earlier, now becoming young adults with disposable incomes. Sony realised that the average age of gamers had rocketed, now into their 20s by the mid 1990s. So they aimed to delivering more teenage and adult oriented games and experiences. It was the first console you could have at home as a young adult, and not have other people laugh at you for being 'a kid' playing with a toy.
reply
Sony's machine was cheaper than the Saturn, had better 3D hardware which was where the industry was always heading, easier and cheaper to work with for developers, marketed much more clearly and so ended up with lots more and better games. They aimed their machine at the kids that had grown up on the NES and other systems 6-7 years earlier, now becoming young adults with disposable incomes. Sony realised that the average age of gamers had rocketed, now into their 20s by the mid 1990s. So they aimed to delivering more teenage and adult oriented games and experiences. It was the first console you could have at home as a young adult, and not have other people laugh at you for being 'a kid' playing with a toy.
reply
-sega-kid
This story is so over hyped! There was so much more to this, Sega made so many small miss steps with the Saturn, it's not as simple as the price or the surprise launch. In fact Sega responded by the time of the full Saturn launch to drop the price of the Saturn. They lost a little ground by having the high price in the first instance but it wasn't make or break. The Sony conference being deliberately boring sounds retrospective writing of history to me. They gathered everyone together to deliberately bore them. in the hope the price tag would make up for all of that. rather than impress them and then reveal a great price too. hmm.
reply
This story is so over hyped! There was so much more to this, Sega made so many small miss steps with the Saturn, it's not as simple as the price or the surprise launch. In fact Sega responded by the time of the full Saturn launch to drop the price of the Saturn. They lost a little ground by having the high price in the first instance but it wasn't make or break. The Sony conference being deliberately boring sounds retrospective writing of history to me. They gathered everyone together to deliberately bore them. in the hope the price tag would make up for all of that. rather than impress them and then reveal a great price too. hmm.
reply
-TrainedOldSkool
Not just the price, it was also Sega of Japan's stubbornness, Tom Kalinsky wanted to make a deal with silicone graphics to power the Saturn and Sega of Japan said no even tho they would give the Saturn a huge power boost and would be cheaper to make, so off they went to Nintendo. Kalinsky didn't want to release the 32X at all but Nakayama insisted. Hell at one point Sega and Sony wanted to release the Playstation together after the Nintendo deal fell through but that deal also failed thanks to developers with different philosophys clashing.
reply
Not just the price, it was also Sega of Japan's stubbornness, Tom Kalinsky wanted to make a deal with silicone graphics to power the Saturn and Sega of Japan said no even tho they would give the Saturn a huge power boost and would be cheaper to make, so off they went to Nintendo. Kalinsky didn't want to release the 32X at all but Nakayama insisted. Hell at one point Sega and Sony wanted to release the Playstation together after the Nintendo deal fell through but that deal also failed thanks to developers with different philosophys clashing.
reply
-mazenelmusa4742
Sega Vs PlayStation it-s Sega who would win not PlayStation if Sega was still here they would be as powerful or higher then the Xbox series X they might not have game pass or achievements but the games will play better on Sega then on PlayStation Sega Dreamcast had better graphics then PS2 Sony first real console the PS1 was a joke Nintendo 64 beat the PS1 but they refused to get arcade hits like marvel vs capcom on their console it was not for PS1 at that time thanks to Sega without them there would of been non perfect arcade hits
reply
Sega Vs PlayStation it-s Sega who would win not PlayStation if Sega was still here they would be as powerful or higher then the Xbox series X they might not have game pass or achievements but the games will play better on Sega then on PlayStation Sega Dreamcast had better graphics then PS2 Sony first real console the PS1 was a joke Nintendo 64 beat the PS1 but they refused to get arcade hits like marvel vs capcom on their console it was not for PS1 at that time thanks to Sega without them there would of been non perfect arcade hits
reply
-scir91
saturn failed for the masses but real gamers LOVE the system. it had amazing arcade game ports from street fighter zero 3 to sega ages (outrun, afterburner) to x-men vs. street fighter to radiant silvergun (yes it was an arcade game first. i know other genres were awesome there as well such as driving games as per daytona usa. as i loved 2D gaming and still do, i was a big fan of this system. yes it was a commercial failure. so be it. so was n64 because psx was dominating for that generation.
reply
saturn failed for the masses but real gamers LOVE the system. it had amazing arcade game ports from street fighter zero 3 to sega ages (outrun, afterburner) to x-men vs. street fighter to radiant silvergun (yes it was an arcade game first. i know other genres were awesome there as well such as driving games as per daytona usa. as i loved 2D gaming and still do, i was a big fan of this system. yes it was a commercial failure. so be it. so was n64 because psx was dominating for that generation.
reply
-13LuckyWishes
This was really interesting! I'd heard this story before, but I liked this take on it. One thing is that I ended the video still not being sure what you meant by -the hole they'd dug themselves into. - You mentioned it a lot, obviously, but either never defined exactly which actions counted as -putting them in the hole- and why they contributed to later problems, or you did say, but did it so quickly that I missed it.
reply
This was really interesting! I'd heard this story before, but I liked this take on it. One thing is that I ended the video still not being sure what you meant by -the hole they'd dug themselves into. - You mentioned it a lot, obviously, but either never defined exactly which actions counted as -putting them in the hole- and why they contributed to later problems, or you did say, but did it so quickly that I missed it.
reply
-Belleuchtung
I find it interesting how this is only the first instance of Sony winning over the market with a $100 difference in price tag, considering that's the exact same thing that caused the PS4 to sell a lot better than the Xbox One out the gate (that, and the simple -here's how you lend a PS4 game to a friend- presentation. Kinda highlights the irony of the PS3 misstep, though.
reply
I find it interesting how this is only the first instance of Sony winning over the market with a $100 difference in price tag, considering that's the exact same thing that caused the PS4 to sell a lot better than the Xbox One out the gate (that, and the simple -here's how you lend a PS4 game to a friend- presentation. Kinda highlights the irony of the PS3 misstep, though.
reply
-pixelroutine4609
7: 14 A misstep yes, but Sony did remember how they schooled Sega. PS4 came in at $399 and without always online etc in the E3 2013 and undercut the Xbox One. Microsoft is still reeling from that to this day. Even Phil Spencer said they --We lost the worst generation to lose in the Xbox One generation, where everybody built their digital library of games. -
reply
7: 14 A misstep yes, but Sony did remember how they schooled Sega. PS4 came in at $399 and without always online etc in the E3 2013 and undercut the Xbox One. Microsoft is still reeling from that to this day. Even Phil Spencer said they --We lost the worst generation to lose in the Xbox One generation, where everybody built their digital library of games. -
reply
-firemonger5409
No. The Snes outsold the genesis in the US market and took Sega-s market share. Nintendo-s market share beaten Sega and took 67% of their market share. This is a fact. Sega lost. Nintendo beaten Sega in the US, NA, SA, Canada, SK, JP and Worldwide. You got your total console sales in 1994 mixed up because Nintendo beaten Sega in NA and, Canada and US in 1994
reply
No. The Snes outsold the genesis in the US market and took Sega-s market share. Nintendo-s market share beaten Sega and took 67% of their market share. This is a fact. Sega lost. Nintendo beaten Sega in the US, NA, SA, Canada, SK, JP and Worldwide. You got your total console sales in 1994 mixed up because Nintendo beaten Sega in NA and, Canada and US in 1994
reply
-AJeazy
sony at least learned from their Ps3 mistake with the Ps4 though. They pulled the same shit on xbox that they did on sega and announced a price tag of 399 compared to xbox's 499. Ps4 has sold double the units the xbox one have. In fact the ps4 has become the 2nd best selling home console ever right behind the ps2.
reply
sony at least learned from their Ps3 mistake with the Ps4 though. They pulled the same shit on xbox that they did on sega and announced a price tag of 399 compared to xbox's 499. Ps4 has sold double the units the xbox one have. In fact the ps4 has become the 2nd best selling home console ever right behind the ps2.
reply
-Yntec
I thumbed down this video because it spoils the whole thing right at the start. It would have been an awesome experience to see the whole thing without knowing in advance. I'd have thumbed it --UP-- had the video started at 0: 20 - the 20 seconds that ruin this video.
reply
I thumbed down this video because it spoils the whole thing right at the start. It would have been an awesome experience to see the whole thing without knowing in advance. I'd have thumbed it --UP-- had the video started at 0: 20 - the 20 seconds that ruin this video.
reply
-jagartharn6361
Sony did not kill Sega, Sega killed Sega with their blunders involved with the Genesis add ons and the Saturn, that killed most if not all faith consumers and 3rd parties once had in them. And pissing off third parties is not a model for long term success.
reply
Sony did not kill Sega, Sega killed Sega with their blunders involved with the Genesis add ons and the Saturn, that killed most if not all faith consumers and 3rd parties once had in them. And pissing off third parties is not a model for long term success.
reply
-Adam_player_1_
The PlayStation launch didn-t just nearly kill Sega it DID kill Sega and Sega never recovered although Sega attempted 1 last hurrah with the Dreamcast and as good as it was, it was no match for the greatest console of all time, The PlayStation 2.
reply
The PlayStation launch didn-t just nearly kill Sega it DID kill Sega and Sega never recovered although Sega attempted 1 last hurrah with the Dreamcast and as good as it was, it was no match for the greatest console of all time, The PlayStation 2.
reply
-poego6045
Admittedly, for gaming that ps3 announcing killed their early sales, it did ABSOLUTELY and UTTERLY win them the HD movie format wars, and in the end their sales for the ps3 eventually caught up once this was secured and they lowered the pricetag.
reply
Admittedly, for gaming that ps3 announcing killed their early sales, it did ABSOLUTELY and UTTERLY win them the HD movie format wars, and in the end their sales for the ps3 eventually caught up once this was secured and they lowered the pricetag.
reply
-jackwall2872
This video does such an excellent job of distilling the relevant historical context and appropriating visuals from a different era to propel its story. KEEP'EM COMING POLYGON. THIS IS WHAT GIES WOULD'VE WANTED.
reply
This video does such an excellent job of distilling the relevant historical context and appropriating visuals from a different era to propel its story. KEEP'EM COMING POLYGON. THIS IS WHAT GIES WOULD'VE WANTED.
reply
polygon
Sega had everything on lock. Had theyed never got so paranoid and rushed both the Saturn and Dreamcast who knows what could have happend. Love the PS series but Sega also has a special place in heart.
reply
Sega had everything on lock. Had theyed never got so paranoid and rushed both the Saturn and Dreamcast who knows what could have happend. Love the PS series but Sega also has a special place in heart.
reply
-ciredecgellar8232
it's called competitiveness, a company that manufactures its own components and consoles will always have the price advantage over a company that goes through suppliers and subcontractors
reply
it's called competitiveness, a company that manufactures its own components and consoles will always have the price advantage over a company that goes through suppliers and subcontractors
reply
-Phasma_Tacitus
Kalinski was pretty depressed at that presentation, Sega of Japan had already cut off so much of his freedom at that point, he was pretty much just doing what they said he should do.
reply
Kalinski was pretty depressed at that presentation, Sega of Japan had already cut off so much of his freedom at that point, he was pretty much just doing what they said he should do.
reply
-gabrielgodoi4565
This is misinformation. The add-on for The Sega Genesis was an executive decision from Sega of japan and soa didn't know about The saturn.
reply
This is misinformation. The add-on for The Sega Genesis was an executive decision from Sega of japan and soa didn't know about The saturn.
reply
-tcgamingtimes999
As a kid who was playing both a Genesis and a PS1 at the turn of the millennia, I'd say there's no denying the credit due to each company
reply
As a kid who was playing both a Genesis and a PS1 at the turn of the millennia, I'd say there's no denying the credit due to each company
reply
-Meridean_
In 70s - 80s, we watch the rivalry between IBM and Apple. But in 90s - 2000s, we watch the rivalry between Nintendo, Sega, and Sony Playstation
reply
In 70s - 80s, we watch the rivalry between IBM and Apple. But in 90s - 2000s, we watch the rivalry between Nintendo, Sega, and Sony Playstation
reply
polygon
Phony fanboys -aw man sad day when a console left the market. Classic days-
Bashes the shit out of competitors hoping only Sony succeed-
reply
Phony fanboys -aw man sad day when a console left the market. Classic days-
Bashes the shit out of competitors hoping only Sony succeed-
reply
-mrf4ncyp4nts
I was gonna make a pithy remark about -oh I didn't know this was a Vox Video- but then I remembered by proxy it literally is
reply
I was gonna make a pithy remark about -oh I didn't know this was a Vox Video- but then I remembered by proxy it literally is
reply
Add a review, comment
Other channel videos
