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[SkylineRKR]

Its certainly a valid point that Sega didn't add much to console ports.

Virtua Fighter for example has nothing on Tekken when it comes to content. Even Tekken 1 had a ton of unlockable characters and ending cutscenes. Tekken 2 added even more extras and 3 had a beat em up and volleyball mode. Sony games really evolved in general, RR gained more content with every entry while Sega Rally, Sega GT etc offered basically nothing but the arcade experience. Virtua Cop and HOTD offered little content while Time Crisis had a completely original console campaign that had a lot of replayability since there were multiple routes and conclusions.

Even on Dreamcast, Sega had a lot of games that perhaps should've been stayed in the arcade or be released on compilations. Like 18 Wheeler and Sports Jam for example. They were fun for like 15 minutes but that was it. This was at a time when arcades were already slowly dying out especially in the west.

 

[SomeGit]

This says a lot. Saturn wasn't what made Sega lose money, Dreamcast was. The mismanagement leading up to the Dreamcast played a big part, naturally.

Sega financials:

--------Sega Genesis introduced
FY 1989: (7.5 billion yen in operating income)
FY 1990: (13.0 billion yen in operating income)
FY 1991: (17.2 billion yen in operating income)
--------Sega CD introduced
FY 1992: (42.0 billion yen in operating income)
FY 1993: 28.017 billion yen in net income (62.540 billion yen in operating income)
FY 1994: 23.223 billion yen in net income (46.595 billion yen in operating income)
---------Sega Saturn introduced
---------Sega 32X introduced
FY 1995: 14.085 billion yen in net income (31.208 billion yen in operating income)
FY 1996: 5.304 billion yen in net income (29.636 billion yen in operating income)
FY 1997: 5.572 billion yen in net income (31.229 billion yen in operating income)
FY 1998: -35.635 billion yen in net LOSS (13.967 billion yen in operating income)
-------- Dreamcast introduced
FY 1999: -42.881 billion yen in net LOSS (2.088 billion yen in operating income)
FY 2000: -42.880 billion yen in net LOSS (-40.354 billion yen in operating LOSS)
FY 2001: -51.370 billion yen in net LOSS (-52.019 billion yen in operating LOSS)
-------- Sega ends production of Dreamcast and exits the console industry
FY 2002: -17.829 billion yen in net LOSS (14.201 billion yen in operating income)

FY 1998 is April 1997 to March 1998 and FY 1999 is April 1998 to March 1999.
This was when the Saturn was supposed to be Sega main source of income, but wasn't. Add that the drasctic fall in income from Arcades and I can't understand the conclusion that the Saturn wasn't what made Sega lose money.

 

[Crayon]

Word on the street is that some fker around these parts said the Saturn control pad was rubbish?

I hope they are taking about the first PAL and USA release version.

The Japanese style Saturn pad is The Sistine Chapel Ceiling of control pads.

That D-pad has never been bettered and before all the Sony boys prep up their D-pad based retorts.. you're wrong.

Overrated pad. I love it. It's up there, but I'd say the genisis 6-button and the saturn 3d pad were right there. Damn, sega was good at that. The Dreamcast pad was a disaster.

 

[RAIDEN1]

You have absolutely no clue what you are talking about.

What do you mean no clue? It has been well documented the rivalry between Sega of America and Japan, Tom Kalinske (might of got his surname wrong) saw that the Saturn would flop ahead of time... but Japan didn't want to hear any of it! Daytona was an absolutely hideous graphically and wasn't a killer app of a title for the Saturn...and even getting the killer app of the ground ie Sonic proved to be more trouble than it was worth......compared to what you were getting on the PSX with Ridge Racer....(Just stating it how I see it...)

 

[assurdum]

Sure. But Saturn was a more elaborated hardware with both 2D and 3D dedicated capabilities, while both PS1 and N64 dropped 2D dedicated hardware. It was a great console and many games demonstrate its capabilities, both in 2D and 3D. Transparency is a feature, it was more complicated for various reason, but this is only one thing in end. Everything does not revolve around transparency...

Absolutely no. Saturn hadn't any 3d capabilities, it was all about 2d. It didn’t used vertex geometry but a "trick" based on multiples bidimensional pictures which neither offered a comparable smooth fps perfomance as real 3d.

 

[Crew511A]

Overrated pad. I love it. It's up there, but I'd say the genisis 6-button and the saturn 3d pad were right there. Damn, sega was good at that. The Dreamcast pad was a disaster.

Yeeeeah, I'll never forget how shocked I was when I first saw the DC pad. What a huge step backwards. I mean, that layout is the industry norm, but it was jarring at first.

 

[StreetsofBeige]

Its certainly a valid point that Sega didn't add much to console ports.

Virtua Fighter for example has nothing on Tekken when it comes to content. Even Tekken 1 had a ton of unlockable characters and ending cutscenes. Tekken 2 added even more extras and 3 had a beat em up and volleyball mode. Sony games really evolved in general, RR gained more content with every entry while Sega Rally, Sega GT etc offered basically nothing but the arcade experience. Virtua Cop and HOTD offered little content while Time Crisis had a completely original console campaign that had a lot of replayability since there were multiple routes and conclusions.

Even on Dreamcast, Sega had a lot of games that perhaps should've been stayed in the arcade or be released on compilations. Like 18 Wheeler and Sports Jam for example. They were fun for like 15 minutes but that was it. This was at a time when arcades were already slowly dying out especially in the west.

Totally.

If someone wanted a console to replicate arcade gaming (especially Sega and Capcom games), Saturn was surely a good system. Instead of dumping quarters into arcade machines, you could buy a game that was close enough to the arcade.

Problem is the games are shallow as hell. Then again, that was probably Sega's development process. Arcade roots. But that doesn't explain how shit the Saturn Sega Sports were when Sony 989 Sports were pretty good and Genesis Sega Sports were good too. It's like they suddenly didnt give a shit about sports when part of the success of Genesis was sports gaming.

I'd put Point Blank better than all Virtua Cop games.

 

[DaGwaphics]

Yeeeeah, I'll never forget how shocked I was when I first saw the DC pad. What a huge step backwards. I mean, that layout is the industry norm, but it was jarring at first.

It was really something how they designed the DC pad to ensure that it couldn't be held comfortably regardless of hand size. The weakest part of the DC no doubt.

 

[Daniel Thomas MacInnes]

Great list. But Sega was it's own biggest enemy. I remember hearing rumors of some sort of 3D accelerator cart to play Virtua Fighter 3 on Saturn, and my first thought was "Oh man, they're trying to pull this crap again." I'm actually surprised they didn't get any push back for the RAM carts.

Bottom line, Sega's bread and butter was arcade games. There was no excuse for them not to have a console in 1994 that could reasonably resemble their biggest arcade games at the time. The lack of care given the first ports of Daytona and Virtua Fighter shows how out of touch Sega was with what their customers wanted

It all comes down to Daytona, doesn’t it? Most kids checked out the minute PSX arrived, and their only memory of Saturn was a famously smudgy, grungy Daytona USA.

Weirdly enough, nobody ever mentions Daytona CE (the finished JP edition). What’s the story on that?

 

[cireza]

What do you mean no clue? It has been well documented the rivalry between Sega of America and Japan, Tom Kalinske (might of got his surname wrong) saw that the Saturn would flop ahead of time... but Japan didn't want to hear any of it! Daytona was an absolutely hideous graphically and wasn't a killer app of a title for the Saturn...and even getting the killer app of the ground ie Sonic proved to be more trouble than it was worth......compared to what you were getting on the PSX with Ridge Racer....(Just stating it how I see it...)

Ridge Racer looked like hot poop. Daytona had much faster scrolling and a ton of cars on screen and collisions. It was a much more elaborated game, and for a very early title it was a pretty good port. Your comparison with Virtua Fighter is the same... Saturn game pushed more elaborated models, 32X certainly isn't better on a visual standpoint... Have you actually played these games? 32X version has a few things going for it, but the visuals aren't part of it. It was also released earlier on Saturn.

 

[cireza]

Saturn hadn't any 3d capabilities

The MD is a console that does not have 3D capabilities. If you want want to do 3D on the MD, you will have to implement software solutions and circumvent the way it displays visuals with tiles and layers.

Of course Saturn had 3D capabilities. It was maybe not implemented in the same way we see in modern days, but it was still designed to push 3D graphics, with hardware and libraries to achieve this.

 

[Naked Lunch]

The Saturn can do great 3D: Sega Rally and Panzer Dragoon Zwei are unreal and the first thing that comes to mind.

After all these years the Saturn turned out to be one of the best consoles ever made. Its Japanese library is legendary.
Im still discovering hidden Saturn gems 25+ years later - once you go down the Japanese Saturn rabbit hole - it seems its never ending.

Sega was pumping out bangers with the Dreamcast (Jet Set Radio, PSO, ChuChuRocket, Daytona 2001, Virtual On OT, Tennis 2k) so I disagree with the thread topic.

 

[xpresstuning]

After all these years the Saturn turned out to be one of the best consoles ever made. Its Japanese library is legendary.
Im still discovering hidden Saturn gems 25+ years later - once you go down the Japanese Saturn rabbit hole - it seems its never ending.

Yeah, it's the only home console machine i own in physical form because of its vast amounts of quality exclusive content and the fact that emulation isn't up to par (even Mednafen suffers from noticeable input lag not present on the original machine). There are also some multiplats which are significantly better on the Saturn because they were either designed for the Saturn and then ported to the PS1, or were enhanced for the Saturn release. Which make them worth owning/playing/re-playing on the Saturn.

Combine its exclusives, exclusive superior ports and the rest, and you got one of the best libraries of video games ever.

 

[Alan Wake]

FY 1998 is April 1997 to March 1998 and FY 1999 is April 1998 to March 1999.
This was when the Saturn was supposed to be Sega main source of income, but wasn't. Add that the drasctic fall in income from Arcades and I can't understand the conclusion that the Saturn wasn't what made Sega lose money.

You don't think R&D for the Dreamcast played a part too? Of course Saturn was losing money for Sega, they sold less than 10 million of it worldwide. But Dreamcast was a financial disaster.

 

[buenoblue]

Realistically they only had one resounding success, the Megadrive/Genisis. The master system was reused model 2/3 tech and they bet on 2d for the saturn, only adding 3d at the last minute.

The Dreamcast was a great machine, ahead of it's time really. But no EA support and the resounding success/brand loyalty of playstation had people just waiting for the PS2.

And yeah they just couldn't compete financially with Sony and Nintendo.

It's a shame really, Megadrive was my shit. And I'm still a 90s tude guy to this day lol.

 

[cireza]

only adding 3d at the last minute

Oh look, its that misinformation again.

I heard the boss from SEGA went into the factories and soldered the VDP1 and the second SH2 on the motherboards himself.

 

[SirTerry-T]

Oh look, its that misinformation again.

I heard the boss from SEGA went into the factories and soldered the VDP1 and the second SH2 on the motherboards himself.

I think out all the big videogame companies, Sega must be the top of the pile when it comes to revisionist history.

 

[DaGwaphics]

I think out all the big videogame companies, Sega must be the top of the pile when it comes to revisionist history.

It's hard with them to know who is telling the truth about what. You watch YT documentaries and even those that were employed by SOA or SOJ have differing stories about how things went and why this or that happened. The consensus seems to be that it had 3D from the beginning but they weren't super happy with what they had after Sony started to demo the PS. That seems reasonable, I don't see why they would design a 2D console after they had already started the move to 3D with the 32X.

 

[SomeGit]

You don't think R&D for the Dreamcast played a part too? Of course Saturn was losing money for Sega, they sold less than 10 million of it worldwide. But Dreamcast was a financial disaster.

No, R&D costs are constant and expected for a hardware manufacturer.

Dreamcast was a "financial disaster" because Sega had no other source of income, while the Saturn at least had the Genesis, Game Gear and Arcade income to hold it off in the first few years.
Those were all depleted even way before the Dreamcast came out in Japan. And since the first years of a console life cycle aren't the most profitable ones (remember unless you are Nintendo, most times hardware is sold at a loss and software is the money maker), your argument holds no water.
Even PS2 wasn't a money making machine for Sony in the first 2 years, but since Sony wasn't starved for cash like Sega and it had the high income from the PS1 in 2000 and even 2001 let it hold steady until it started to turn profit.

Dreamcast was dead less than 1.5 years after it came out worldwide, it never had any chance to turn a profit. Saturn had plenty of time on the market, it just didn't move.

 

[cireza]

after they had already started the move to 3D with the 32X

They actually started with 3D way before the 32X. SEGA have been a massive pusher of 3D and largely invested in creating chips that would enable true 3D engines. This is all written in their history with Yu Suzuki. And to think that such a company would not even put what is required to make 3D in the Saturn ? Let's get real for a sec.

Dreamcast was a "financial disaster" because Sega had no other source of income

Dreamcast was a disaster because they were basically bleeding money because of this console. Manufacturing it was expensive, parts were expensive, failure rate was high, they could not turn a profit by selling the console alone. Price was low in the US. And at the same time, they made ridiculous investments in games that had no chance of turning a profit. They were basically throwing away money with this console, and made unreasonable investments.

 

[phil_t98]

To be fair, they eventually tried competing for more in-depth experiences with games like Panzer Dragoon Saga, Shining Force 3, Sonic Adventure 1+2, Shenmue, Phantasy Star Online, Skies of Arcadia, etc.

yeah and all great games but the main selling point was the arcade conversions such as Daytona , Sega rally, virtue fighter and others. they were all amazing games but didn't translate the short experiences to console that well. panzer dragoon is one of my all time faves though

 

[SomeGit]

Dreamcast was a disaster because they were basically bleeding money because of this console. Manufacturing it was expensive, parts were expensive, failure rate was high, they could not turn a profit by selling the console alone. Price was low in the US. And at the same time, they made ridiculous investments in games that had no chance of turning a profit. They were basically throwing away money with this console, and made unreasonable investments.

It's expected for the first years of a console to be a money pit, the Dreamcast wasn't that much expensive to build compared to the Saturn (you can see that losses from the consumer business division weren't significantly higher when compared to the Saturn days), the problem really was the downfall of other income.
Check out the drop in Arcade income:

FY 1998 - 122,627 Million Yen
FY 1999 - 88,372 Million Yen
FY 2000 - 73,654 Million Yen

And the Net loss was:

FY 1998 - 35,635 Million Yen
FY 1999 - 42,881 Million Yen
FY 2000 - 42,880 Million Yen

With the drop in income from arcades and the dried up income from the Saturn, saying that Sega was bleeding money just because of the Dreamcast is just moronic. Console get their income over their entire lifecicle with software sales, expecting the Dreamcast to boom the revenues on the first year is delusional. If the Arcade side had kept their income from 1998, you could very well see a great 2001 and 2002 for the Dreamcast, but it just never had that chance.

 

[Havoc2049]

Nintendo = SNES and handheld
Sony = PS1

Sega = Sega CD, 32X, Saturn, Game Gear, CDX, Nomad, Sega Pico and probably some other shit I missed.

And compared to PS1, 32x and Saturn were shit. They got blessed that N64 came out a bit later so they had a head start (like Genesis/MD vs SNES/SF), but because their 32-bit machines were junk and overpriced (I think Saturn was $100 more than PS1), it was always going to be a tough hill to climb. Also their Sega Sports were terrible on Saturn (which were good on Genesis).

Maybe Saturn would had done a bit better if they didnt mess up the launch where they did that weird thing where they launched early and pissed off retailers.

Sega's shotgun approach didn't work.

If they just focused on their arcade games and a solid console that would had been a better strategy.

Pretty much this. Sega had too much going on at the same time and it confused the consumer and they were competing against themselves at times.

Can you imagine if Phantasy Star IV and Virtua Racing would have launched with the Sega Saturn? Especially Phantasy Star IV, as Japan and the world were hungry for epic JRPGs at the time. Phantasy Star IV would have been epic in CD format on the Saturn, but instead Phantasy Star IV was released as a super expensive $100 (USD) cart on a dying Mega Drive platform in Japan and the high price ensured it wouldn't be a hit in the US and Europe.

 

[cireza]

the Dreamcast wasn't that much expensive to build compared to the Saturn

SEGA weren't losing money on Saturn sales at launch. The price was right and the console was reliable. Dreamcast had a high failure rate, and the console certainly wasn't as reliable.

 

[Ashrak]

Sega was fishing for the same kind of customers as Sony.

 

[SomeGit]

SEGA weren't losing money on Saturn sales at launch. The price was right and the console was reliable. Dreamcast had a high failure rate, and the console certainly wasn't as reliable.

They were losing money in launch per unit, each one cost 380$ to produce, I don’t know where you got that info from. With retail margin, warranties, shipping etc. they were easily losing money.

They weren’t losing money overall because of income from Genesis and the Arcade.

 

[SkylineRKR]

SEGA weren't losing money on Saturn sales at launch. The price was right and the console was reliable. Dreamcast had a high failure rate, and the console certainly wasn't as reliable.

Yeah Dreamcast is beloved by many including myself, but the console itself was a hot mess. Somehow its mostly been overlooked, or taken for granted since its library (esp. at launch) was so good.

But Dreamcast had

-very noisy fan and disc drive, this was absolutely horrible.
-A terrible controller. Really awful. The D-pad and face buttons simply hurt. Triggers would break. After the Nights controller which felt excellent and comfy I have to ask; why? Not to mention the cable extending from the bottom.
-unreliable. Like the original PS1 it failed on me a lot, prompting me to restart or take it open and clean it. The DC was notorious for this.
-awful media player.
-some games simply didn't work. Like Blue Stinger copies. I had 2 of them not working, ended up playing a CDR of it.

Now the Saturn, it was for me:

-very silent.
-Great media player. I loved the spaceship front end. I actually used this system for audio discs. It was the best.
-Better controllers (V2 anyway)
-Reliable. I never had it fail on me, ever. It just didn't. Even after disc swapping for imports. Unlike my gen 1 PS1, and DC, Saturn never failed on me.


Personally, I think the Saturn is the best looking disc based console of all. Especially the jet black V1 with access light and glossy front. The V2 looked cheaper with its single light and big buttons without a front. I've also owned the Japanese grey V1 and beloved white V2. I didn't like the white V2 so much, I ultimately kept the grey one. Its beautiful with its blue buttons lol.

 

[cireza]

They were losing money in launch per unit, each one cost 380$ to produce, I don’t know where you got that info from. With retail margin, warranties, shipping etc. they were easily losing money.

They weren’t losing money overall because of income from Genesis and the Arcade.

The Saturn retailed at 399$ in the US, which is above the price you provided, supposing that it is actually correct.

Dreamcast launched at 199$. This was pure suicide. There is absolutely no way to turn a profit at that price. Every unit sold was putting SEGA a bit deeper into their grave.

You see, you don't have to sell tenths of millions of consoles to have a profitable business. As long as you turn a profit on whatever you sell, you are fine. Which was the case of the Saturn.

 

[Drew1440]

They actually started with 3D way before the 32X. SEGA have been a massive pusher of 3D and largely invested in creating chips that would enable true 3D engines. This is all written in their history with Yu Suzuki. And to think that such a company would not even put what is required to make 3D in the Saturn ? Let's get real for a sec.


Dreamcast was a disaster because they were basically bleeding money because of this console. Manufacturing it was expensive, parts were expensive, failure rate was high, they could not turn a profit by selling the console alone. Price was low in the US. And at the same time, they made ridiculous investments in games that had no chance of turning a profit. They were basically throwing away money with this console, and made unreasonable investments.

Eh? Dreamcast was one of the more reliable consoles.

 

[cireza]

Eh? Dreamcast was one of the more reliable consoles.

In terms of reliability it the worst SEGA console. Definitely above anything Sony did though.

 

[SomeGit]

The Saturn retailed at 399$ in the US, which is above the price you provided, supposing that it is actually correct.

Dreamcast launched at 199$. This was pure suicide. There is absolutely no way to turn a profit at that price. Every unit sold was putting SEGA a bit deeper into their grave.

You see, you don't have to sell tenths of millions of consoles to have a profitable business. As long as you turn a profit on whatever you sell, you are fine. Which was the case of the Saturn.

The price I provided was the just manufacturing cost, Sega didn't get the whole 399$ back (hell it wasn't even at 399$ for long, it drop to 299$ in October and it was 249$ by March 1996) and even just shipping the units to the store, meant that the raw cost per unit was more than 380$.
Sega didn't make profit on hardware sales, I don't know why you are pushing this insane take, even the Genesis, Sega CD and 32X were sold at a loss, why would the Saturn not be?
The only hardware at the time that was sold at a profit was the 3DO, and just at launch, after a while 3DO even made a deal with Panasonic to take a hit per unit.

The Dreamcast was also sold at 199$, but it was also much cheaper to produce than the Saturn. Not having 4 CPUs and 2 VDPs helped.

 

[cireza]

The Dreamcast was also sold at 199$, but it was also much cheaper to produce than the Saturn. Not having 4 CPUs and 2 VDPs helped.

Dreamcast manufacturing cost was well beyond 199$ and that's components and assembly alone. If we go by your logic, and include all external expenses, then it cost even more. And you are also ignoring the high failure rate at manufacturing for the Dreamcast. Every console sold was digging SEGA's grave, which wasn't the case of the Saturn. Otherwise they would have exited the home console market before the release of the Dreamcast.

 

[SomeGit]

Dreamcast manufacturing cost was well beyond 199$ and that's components and assembly alone. If we go by your logic, and include all external expenses, then it cost even more. And you are also ignoring the high failure rate at manufacturing for the Dreamcast. Every console sold was digging SEGA's grave, which wasn't the case of the Saturn. Otherwise they would have exited the home console market before the release of the Dreamcast.

Loss per unit might have been higher for Dreamcast, but it wasn't really all that higher, not suicidal as you are implying. It also helped that the Dreamcast had much better attach rate vs the Saturn accounting for the same timespan.
We know that loss per unit on the Saturn at launch was 100$ as per Hideki Saito (https://www.sega-16.com/forum/showt...on-the-Sega-Saturn-(incredible-new-interview)), and much more when they went aggressive in late 1995/early 1996 vs the Playstation.

Can you back that "high failure rate" of the Dreamcast? Because you keep saying it, nothing I've found on either interviews or financial reports that mention anything about it being a big factor.

 

[cireza]

Loss per unit might have been higher for Dreamcast, but it wasn't really all that higher, not suicidal as you are implying. It also helped that the Dreamcast had much better attach rate vs the Saturn accounting for the same timespan.
We know that loss per unit on the Saturn at launch was 100$ as per Hideki Saito (https://www.sega-16.com/forum/showt...on-the-Sega-Saturn-(incredible-new-interview)), and much more when they went aggressive in late 1995/early 1996 vs the Playstation.

Can you back that "high failure rate" of the Dreamcast? Because you keep saying it, nothing I've found on either interviews or financial reports that mention anything about it being a big factor.

This document from 2000 estimates the manufacturing cost at around 250$, which is already well above 200$.

I won't find a source on modern day internet about failure rate. This is simply something I must have read a long time ago and have remembered ever since.

 

[SomeGit]

This document from 2000 estimates the manufacturing cost at around 250$, which is already well above 200$.

I won't find a source on modern day internet about failure rate. This is simply something I must have read a long time ago and have remembered ever since.

That was done by a 3rd party, using standard pricing, not assuming bulk discounts, etc. We don't have a manufacturing cost or loss figure from Sega themselves like the Saturn.
Nothing is said about it on Financial Documents nor staff interviews, so high failure rate wasn't really a big factor.

But anyway, we've gone on a bit of a sidestep, the point is neither the Dreamcast nor the Saturn were sold at profit, but to say Sega didn't lose money on the Saturn but lost all on the Dreamcast is not true. Even if they did lose more money on the Dreamcast, the big factor was the loss of income from other revenue streams.

Saturn had the income from Genesis and a strong Arcade division, Dreamcast had no income from Saturn and by 2000 the arcade division had a quarter of the income compared to the Saturn days.

 

[cireza]

Nothing is said about it on Financial Documents nor staff interviews, so high failure rate wasn't really a big factor.

Who knows ? In any case, the console was sold at loss without even accounting all the external expenses, and this is when SEGA profit absolutely plummeted and lead to their death as a manufacturer. Add the absolutely absurd investments made in games at the same time, and it seems pretty obvious were the problems came from. Management did not have any common sense anymore. I don't know what more proof you need.

The Dreamcast could have been a profitable console. Management took the decision not to.

 

[SomeGit]

Who knows ? In any case, the console was sold at loss without even accounting all the external expenses, and this is when SEGA profit absolutely plummeted and lead to their death as a manufacturer. Add the absolutely absurd investments made in games at the same time, and it seems pretty obvious were the problems came from. Management did not have any common sense anymore. I don't know what more proof you need.

All of that started in the Saturn days, other income streams just hid that. In fact the first heavy loss was in FY 1998 (April 1997 to March 1998) that was in the Saturn days, way before the first Dreamcast was even manufactured.

 

[cireza]

All of that started in the Saturn days, other income streams just hid that.

As I already said, Saturn was fine overall and even had some pretty good success in Japan. As much as you would like to tell us that the Saturn killed SEGA, it wasn't the case at all.

 

[SomeGit]

As I already said, Saturn was fine overall and even had some pretty good success in Japan. As much as you would like to tell us that the Saturn killed SEGA, it wasn't the case at all.

The Saturn was not fine, FY 1998 was a Saturn only FY and was a heavy loss for Sega. How was it doing fine?
I didn't say that Saturn killed Sega, but it was a heavy financial blow for Sega. The other one was the decline in the Arcades.

 

[cireza]

The Saturn was not fine, FY 1998 was a Saturn only FY and was a heavy loss for Sega. How was it doing fine?
I didn't say that Saturn killed Sega, but it was a heavy financial blow for Sega. The other one was the decline in the Arcades.

And what's your source for this ?

 

[SomeGit]

And what's your source for this ?

https://segaretro.org/images/f/fe/AnnualReport1998_English.pdf

 

[lostinblue]

I think Dreamcast was really good and not in 1994.

 

[cireza]

https://segaretro.org/images/f/fe/AnnualReport1998_English.pdf

This document further validates my point that Saturn years were fine overall. 1998 is where they shifted to the Dreamcast and halted sales of the Saturn (which was a dumb decision), it was a turning point that cost them a ton of money. But the table with the previous years makes it pretty clear. Consumer business was doing okay in 95/96/97, which were the Saturn years. So thanks for proving my point.

If you take some time to read, you will also see that they had exceptional losses in 1998 from affiliated companies.

 

[StreetsofBeige]

I never had a DC, but rented it a few times from Blockbuster video. It wasa good system with a good controller. NFL and NBA 2k were awesome, and so was Armada, Soul Calibur and Sega Rally.

Cheap price too.

But big problem. DC had either zero or hardly any EA and Konami games. I think Soul Calibur was Namco's only big game. So a lot of key games from companies I liked which would never show up. I dont care about Square games or JRPGs, but for fans of those games, those were probably lacking too.

At the time, I didn't care about DVDs, but for some media fans that might be an issue too. By the time I bought DVD movies I already bought a Panasonic home theatre system. PS2 had the whole library of games except Sega games (if you waited a bit as year one games were shit), but it also had a DVD drive for movies.

But if you wait an extra year, you also got the Sega games as they became software only. I got NFL 2k2 as one of my started games when I got my PS2.

 

[SomeGit]

This document further validates my point that Saturn years were fine overall. 1998 is where they shifted to the Dreamcast and halted sales of the Saturn (which was a dumb decision), it was a turning point that cost them a ton of money. But the table with the previous years makes it pretty clear. Consumer business was doing okay in 95/96/97, which were the Saturn years. So thanks for proving my point.

If you take some time to read, you will also see that they had exceptional losses in 1998 from affiliated companies.

The drop in income from the consumer division and drastic rise in cost of sales help your point, God you just want to be right don’t you?

You have an interview from Sato above saying that they had stop sellling the Saturn because it was to expensive to sell for a competitive price (ie 249$) and you think it was a dumb decision to drop from the market?

They didn’t shift to Dreamcast in FY 1998, FY 1998 ended in March 1998. The losses were all because of the Saturn.

 

[StreetsofBeige]

This document further validates my point that Saturn years were fine overall. 1998 is where they shifted to the Dreamcast and halted sales of the Saturn (which was a dumb decision), it was a turning point that cost them a ton of money. But the table with the previous years makes it pretty clear. Consumer business was doing okay in 95/96/97, which were the Saturn years. So thanks for proving my point.

If you take some time to read, you will also see that they had exceptional losses in 1998 from affiliated companies.

The way they do their income statement is weird as its not showing everything. Net Income should be the final metric, but they got dep and amortization under it.

Also, going from Operating Income to Net Income for 1998 is a $56k expense (difference), which is a no mans land. I'm going to assume $22k of the dep and amortization and COGs is part of the Cost of Sales row.

 

[Celine]

SEGA weren't losing money on Saturn sales at launch.

That's not true.

Hideki Sato:
“So we released the Saturn in 1994, and as I said before, there were two SH-2s. In addition, memory was expensive at this time, and we were using a large amount, so costs were very high. For each Saturn sold, we lost about 10,000 yen ($100). That’s how the hardware business works. But the goal was to recoup the losses from software royalties. If there are lots of third parties, lots of games sold, and we get 2,000 yen for each, it’s possible. However, if software sales are weak, and for each console sold, we’re ultimately losing 5,000 – 6,000 yen, what’s going to happen from the business perspective? We’re going to stop selling consoles. This later became a huge problem.


“Every month, or even every week in Sega’s case, we had meetings to examine the current situation. Each department would report on where it stood in relation to its goals. So, imagine if the sales goal for the end-of-year sales war is, say, 3 billion yen, and the profit goal is 300 million yen—but wait, the profit is in the red. That profit is a very important factor, so what does the business side do? They decide that it’s not necessary to have sales of 3 billion yen. Instead, 2 billion yen will do. In other words, they stop selling 1 billion yen’s worth of hardware. That way, if each unit sold is losing 5,000 yen, and we extend that to 20,000 units, that’s 100 million yen lost. By stopping the sales of 20,000 units, in a way that becomes 100 million yen in profit. So they slammed on the brakes in terms of unit distribution. Even though there were people that wanted to buy the console, Sega didn’t want to sell it, because the more they sold the more they went into the red.


“From the perspective of the third parties, they saw that Sega was curbing the sales of the Saturn. The more consoles there were, the more games would be sold. But if console sales were being limited, then this created a serious problem. As they say, poverty dulls the wit. This led to a negative feedback loop.”

Hideki Sato Discussing the Sega Saturn - Mega Drive Shock

Recently, an interview was conducted with Hideki Sato on his life and his time at Sega as part of an oral history research project documenting the game industry in Japan. The interview transcription is over 150 pages long. If you don’t know, Sato was in charge of Sega’s consumer R&D department...

mdshock.com

 

[StreetsofBeige]

That's not true.

Hideki Sato:
“So we released the Saturn in 1994, and as I said before, there were two SH-2s. In addition, memory was expensive at this time, and we were using a large amount, so costs were very high. For each Saturn sold, we lost about 10,000 yen ($100). That’s how the hardware business works. But the goal was to recoup the losses from software royalties. If there are lots of third parties, lots of games sold, and we get 2,000 yen for each, it’s possible. However, if software sales are weak, and for each console sold, we’re ultimately losing 5,000 – 6,000 yen, what’s going to happen from the business perspective? We’re going to stop selling consoles. This later became a huge problem.


“Every month, or even every week in Sega’s case, we had meetings to examine the current situation. Each department would report on where it stood in relation to its goals. So, imagine if the sales goal for the end-of-year sales war is, say, 3 billion yen, and the profit goal is 300 million yen—but wait, the profit is in the red. That profit is a very important factor, so what does the business side do? They decide that it’s not necessary to have sales of 3 billion yen. Instead, 2 billion yen will do. In other words, they stop selling 1 billion yen’s worth of hardware. That way, if each unit sold is losing 5,000 yen, and we extend that to 20,000 units, that’s 100 million yen lost. By stopping the sales of 20,000 units, in a way that becomes 100 million yen in profit. So they slammed on the brakes in terms of unit distribution. Even though there were people that wanted to buy the console, Sega didn’t want to sell it, because the more they sold the more they went into the red.


“From the perspective of the third parties, they saw that Sega was curbing the sales of the Saturn. The more consoles there were, the more games would be sold. But if console sales were being limited, then this created a serious problem. As they say, poverty dulls the wit. This led to a negative feedback loop.”

Hideki Sato Discussing the Sega Saturn - Mega Drive Shock

Recently, an interview was conducted with Hideki Sato on his life and his time at Sega as part of an oral history research project documenting the game industry in Japan. The interview transcription is over 150 pages long. If you don’t know, Sato was in charge of Sega’s consumer R&D department...

mdshock.com

Lucky for Sega, hey had their arcade division to help prop up their finances.

As for their console business back then, talk about a bad business model. Made worse as it's their biggest product line (basically all eggs into one basket).

Sato's description of not wanting to sell too much money losing products is a common strategy in all businesses. Our company does the same. We dont want losing products or ones with hardly any profits to sell too much as it drags down the metrics. But, unlike Sega our company has a ton of other brands and items to sell. So if we cut the cord on a couple brands across 40 items, we dont give a shit as we'll make it up on other profitable products.

Sega cutting the cord on consoles tanks the entire company. Which got saved by going software only.

 

[Alan Wake]

No, R&D costs are constant and expected for a hardware manufacturer.

Dreamcast was a "financial disaster" because Sega had no other source of income, while the Saturn at least had the Genesis, Game Gear and Arcade income to hold it off in the first few years.
Those were all depleted even way before the Dreamcast came out in Japan. And since the first years of a console life cycle aren't the most profitable ones (remember unless you are Nintendo, most times hardware is sold at a loss and software is the money maker), your argument holds no water.
Even PS2 wasn't a money making machine for Sony in the first 2 years, but since Sony wasn't starved for cash like Sega and it had the high income from the PS1 in 2000 and even 2001 let it hold steady until it started to turn profit.

Dreamcast was dead less than 1.5 years after it came out worldwide, it never had any chance to turn a profit. Saturn had plenty of time on the market, it just didn't move.

I'm not arguing against any of this, really. Sega did not have the cash to sustain the business. It was kind of a perfect storm: too little money, cruel competition from Sony, arcade ports being less relevant than before, no support from EA and Sega of Japan and Sega of America not seeing eye to eye. A darn shame because Dreamcast was possibly their finest console of all.

 

[S0ULZB0URNE]

32X happened.

Sega CD,32X and Saturn released to close together.
Game quality (for the most part) from Sonic on wasn't as good as it was up to Sonic's release.(not saying no good games released)

People saying Sony is lol worthy in this instance as Nintendo is the one who whooped on them before they beat themselves see above.

Sony smacked them(a good Dreamcast)around when PS2 released.