Sega-16: To this day, gamers have a love/hate relationship with the Sega CD, and unfortunately many don't bother to look past the full-motion games in its library, where there really is a lot of quality software. In your opinion, what did you think was genuinely needed to make it a success?
Tom Kalinske: That's a good question, and you have to remember that this was the very beginning of the optical medium in terms of a video game experience, and none of us knew what the hell we were doing! I mean, it was really an experiment, a great learning experience. One of the interesting things to me is that one of our strongest partners in developing for that platform was Sony. And Sony didn't have a hardware division (at least for video games) at the time. They had a software division run by Olaf Olafsson, who was a great partner to us. They spent lots of money developing games for the Sega CD (probably more than we did), we gave them technical help…a lot of it, we loaned them people; and there was really this wonderful collaborative effort. We each benefited from each other's work, and I think that's one of the things that has been forgotten in video game industry lore or history: that this very strong bond existed back then between the two companies. In fact, taking it to the next step, at one point Olaf, Mickey Shulhoff (former Sony of America CEO), and I discussed that since we had such a great relationship from working on the Sega CD, why don't we take what we've learned from our software developers – their input – and use it as the criteria for what the next optical platform ought to be.
So we got all that and put it together so that it wasn't just pure engineeringese (jargon) but something that people could understand. I remember we had a document that Olaf and Mickey took to Sony that said they'd like to develop jointly the next hardware – the next game platform, with Sega, and here's what we think it ought to do. Sony apparently gave the green light to that. I took it to Sega of Japan and told them that this was what we thought an ideal platform would be – at least from an U.S. perspective – based on what we've learned from the Sega CD, and our involvement with Sony and our own people. Sega said not a chance. Why would it want to share a platform with Sony? Sega would be much better off just developing its own platform, and it's nice that we had some ideas on what that platform ought to be and they'd consider it, but the company would be developing its next platform itself.
When you think back on that position, it's an interesting one. We all knew we were going to lose money on the hardware, so our proposal was that each of us would sell this joint Sega/Sony hardware platform; we'll share the loss on the hardware (whatever that is, we'll split it), combine our advertising and marketing, but we'll each be responsible for the software sales we'll generate. Now, at that particular point in time, Sega knew how to develop software a hell of a lot better than Sony did. They were just coming up the learning curve, so we would have benefited much more greatly – at least in my opinion – than Sony would have, at least initially, at least for a year or two. But Sega of Japan didn't want any of that.
Sega-16: That sounds a lot like what happened with the Sony/Nintendo CD-ROM. Sony was willing to enter into a joint hardware platform but was ultimately rejected by Nintendo in favor of Phillips.
Tom Kalinske: Yeah, but I think ours preceded that though.
