Sega burned too many bridges.
They pissed off fans by dropping Genesis, CD, 32X, Nomad support, as well as Gamegear, they launched Saturn at a high cost with no games ready, pissed off retailers and developers with it. They then killed the Saturn prematurely, coasted with nothing on the market for a year, and let Yu Suzuki bleed them dry by making Shenmue instead of some other new successful games.
PS2 was mostly all just marketing hype. The Dreamcast was cheap and powerful, playing the best versions of games from the PS1/N64 era, regaining momentum for the brand among gamers, but they then announced that they would stop console production, and that was it. The easy piracy came late to it.
Yes Sony fanboys.
You won't admit it because people love and truly respect SEGA.
But what killed SEGA is Sony.
Because DVD and stupid casual gamers and sheeps, "buy Playstation it's better because it's better".
Playstation = IPhone of gaming nothing else.
PS1 and PS2 killed the Saturn and Dreamcast.
I was there.
And if Sony didn't entered the console market, SEGA would still be there today.
("olol but it's SEGA fault" NO it's Sony fault. N64 and GameCube floped too because of Sony).
it had a damn near perfect port of hydro thunder, you hush your mouth.Dreamcast was a gamer’s console with no real killer app. Sonic Adventure was mediocre compared to Mario, there was no GTAIII, NFL2k was great but Madden on the PS2 was right around the corner, Shenmue ended up being for a really niche audience...where was the MGS2, Final Fantasy, Mario, Zelda, GTA?
Marvel vs Capcom 2 isn’t going to send units flying off the shelves
Yes Sony fanboys.
You won't admit it because people love and truly respect SEGA.
But what killed SEGA is Sony.
Because DVD and stupid casual gamers and sheeps, "buy Playstation it's better because it's better".
Playstation = IPhone of gaming nothing else.
PS1 and PS2 killed the Saturn and Dreamcast.
I was there.
And if Sony didn't entered the console market, SEGA would still be there today.
("olol but it's SEGA fault" NO it's Sony fault. N64 and GameCube floped too because of Sony).
As add-ons go, it was fairly successful, though massively under-utilized, I saw a video of Tom Kalinske recently and he is happy that the Sega CD came out, as he thought if it wasn't for the add-on, developers wouldn't have been able to get to grips with CD technology for gaming...Sega cd is fine.... remember, without sega cd, there would not be Lunar, Lunar 2.
EA Sports becoming exclusive to PS2 killed Dreamcast. As American sports go, Madden is king. I don’t remember, other than Dreamcast, Madden NOT being on any other console.
Finally, I will offer one more culprit for Dreamcast's demise: the hardware. Compared to PS2, Gamecube and Xbox, Sega's console is the weakest of Generation 6, and it's not even close. In fact, the system could almost be classified as Gen 5.5, and if you really want to be brutal, you could say the machine was built for upgraded PSX and N64 ports. Which is precisely what we got. Yes, Soul Calibur looks fantastic, as does Skies of Arcadia, Shenmue, Jet Set Radio, Ferrari F355, Crazy Taxi, Test Drive Le Mans and Phantasy Star Online. But look how quickly Playstation 2 surpassed them with Madden 2000, SSX, Metal Gear Solid 2 and Gran Turismo 3. Gamecube was still further ahead. And Xbox was in another league entirely.
Dreamcast just couldn't compete. That was obvious by the end of 2000, and when you look at what followed several years later, well...have you seen Shadows of the Colossus, Halo 2 or Zelda Twilight Princess lately?
I see people keep bringing up piracy but is anyone actually considering how friggin' expensive CD burner drives were in 1998? 1999? It's not like they were anywhere near as fast as today's drives, either. Same goes for internet; broadband wasn't really even a thing until the early 2000s so, you either had shitty 28.8K or slightly-better 56K as your main options...have fun trying to download 650 MB+ files over that without getting disconnected (and then having to restart from the beginning), over a period of hours or possibly even days.
That's how slow dial-up was for files pushing into the 100s of MB in the late '90s, I can guarantee you very few gamers were pirating Dreamcast games, you needed to be a specialists with a lot of cash to throw around for the drives, computers, servers and hosting, and at least a T1 connection if not better (T1 (1.4 Mbps or 175 KB/s) was the highest you could go for a long time before other options like broadband started to pop up in the early 2000s..which was actually about after the Dreamcast's commercial lifespan in the West).
I think most of it has been explained throughout the thread but I'll chime in anyway with my understanding. If I'm missing anything or if any info is slightly off then feel free to chime in and correct me.
To understand the issue you have to go back to the Megadrive days. Sega Japan and Sega America were trying to compete too much internally and what was good for one market didn't necessarily fly in the other market.
Sega Japan had only moderate success with the Megadrive in Japan, it wasn't an out and out failure, but it certainly wasn't lighting up the charts compared to the NES and SNES. At the same time through clever marketing and the right content/market conditions Sega America were a runaway success becoming the market leader for a period ahead of the mighty Nintendo who were unstoppable in Japan.
This led to a lot of clashing egos on both sides with the Japan branch being sour for being compared non favourably to the highly successful American arm and the American arm feeling like they knew what was best and that they should be calling all of the shots.
This led to internal bickering much of which we likely only hear bits of pieces of now. Rather than working together as a team and doing what's best for the overall company by combining strengths the two branches instead tried to one up each other and compete for brownie points with the top brass.
So coming up towards the Saturn this internal strife and wasting of talent resources came up again. The Mega CD was an experiment which Sega can't really be blamed for as FMV/CD was all the rage at the time and even Nintendo were also working on their own disc drive add on which we all know about but had it released would probably have been as unsuccessful as the Mega CD was.
The American branch believed that they found success with the Megadrive so expanding it's life span with the 32X was the right idea rather than putting all resources into the next console. This obviously was a failure and combined with the Mega CD customers had begun to lose a bit of faith in Sega's direction as a company and brand.
The Japanese branch having been pioneers in 3D graphics in gaming from their highly successful arcade business should have been well in the lead in the R&D/Talent department and their next console should have been a smash hit in terms of wow factor and technology.
However a lack of foresight and a bad read on marketing conditions led the Japanese branch to the thinking that they wanted to maintain a tiered environment where arcades possessed the best technology and gave you that "WOW" factor and home consoles were more simplistic. I suppose you could say the thinking was likely akin to the Cinema experience verses the home video experience at the time.
There was likely an element of not wanting to cannibalise Sega's at the time highly successful arcade business and probably also more egos clashing between say the arcade division and the home console division.
So Sega Japan set out to make a machine that continued advancing 2D graphics assuming everyone else would go the same route and leave fancy 3D tech to the arcades.
Later when Sega realised that everyone else was going the 3D home console route they had to scramble to get the Saturn together causing a mish-mash of design philosophies and chipsets which made the Saturn highly difficult to develop for and although a 2D powerhouse from it's initial design philosophy the console's 3D capabilities were somewhat lacking and certainly a late addition in the development cycle.
But Sega had done their research, at least as far as the Japanese market was concerned and had deals in the works with several Japanese third parties who had only recently been freed from Nintendo's draconian monopoly contracts and wanted to work with someone else.
The Saturn released in Japan and was a huge success over there compared to the Megadrive. The Saturn was going toe to toe with the Playstation for the first year. The Japan branch finally felt they were successful by tailoring everything to what they knew of the Japanese market. This however was in stark contrast to the western release of the Saturn.
The Japan branch decided that because the Megadrive was only moderately successful for them that it was better to put past failures behind them and concentrate all their eggs in the next gen basket so all production on Megadrive games was halted. This may have been good for the Japanese market but not for the US market where the Megadrive was still a huge success. This in the US market was a huge blow to Sega as a company as they were killing off the golden goose as it were and stopping that revenue stream and consumer mindshare.
The Sony Playstation was on the horizon and Sony had been wining and dining developers and publishers to bring software to their platform, and they were doing a great job of it too. Backed by the branding and worldwide success/money of Sony which was an unstoppable brand at the time serious competition was on the way.
In what can only be described as one of the dumbest moves in videogame history the Saturn was launched in the US months early to compete with the Sony Playstation in the strangest stealth launch ever. It was a total rush job with no marketing to back it up yet and almost no software as third parties were still working on their launch titles for the console.
This understandably pissed off everyone: publishers, developers, marketing departments, retailers and consumers.
For consumers especially this was the last straw, coming off the back of the Mega CD and 32X failures, the sudden forced death of the Megadrive and now this stealth launch of the Saturn with barely any software or marketing and no mascot Sonic game anywhere in the pipeline.
The Saturn unsurprisingly failed in the west....hard. The Japan branch had finally started to gain success in it's home territory but all for nothing as their decisions had led to the doom of their own brand/console in the rest of the world. Had things been different and better decisions made in final days of the Megadrive and the lead up to the Saturn then we could be living a very different history now but alas Sega had the ball and dropped it so hard it won't likely ever be forgotten.
So coming off the death of the Megadrive and the costly R&D on it's failed add ons. The failure of the Saturn and the sudden decline of the arcades Sega had pretty much lost all of it's revenue streams in just a few shorts years. The company had lost the faith of consumers and publishers alike and was in financial ruin essentially.
But desperate to regain their success and become a competitor again Sega set to work on the Dreamcast, this time they would finally learn from their mistakes and both branches would work together for the common good.
They borrowed money and got to work on a fantastic console. Learning from the terrible launch of the Saturn the Dreamcast had software coming out of it's ears for the launch and first 18 months. It was very front loaded but it needed to be to make an impact.
And to it's credit despite everything against it, the Dreamcast was pretty successful for a time, but it needed to be an absolute runaway success. The console was perfectly aimed at the hardcore and normally were it around longer the mainstream would eventually jump in too, however this was not the case with the Dreamcast.
The Playstation had been an unprecedented success and brought in gamers from much wider age ranges. Games were no longer for little kids, the mainstream were involved now. The hype for the Playstation 2 was bigger than anything before or since. It was simply monumental, and the marketing both backed and played to this fact. The public mindshare was with Sony now and nothing Sega could do would change this. When combined with the high demand and price of DVD players Sony pulled an amazing move and people were using PS2 as a cheap DVD player too further increasing it's success.
Sega had pretty much ran out of money at this stage, if they had a war chest like what Nintendo does it's possible the Dreamcast could have carved out a reasonable success in the market but there just wasn't anymore money coming through the pipeline.
There were talks with Microsoft to buy Sega which almost happened, and Sega knew that afterwards Microsoft were coming to market with or without them. Given the market conditions of high spenders Microsoft and Sony in the market with longterm darling Nintendo and a broke Sega the writing was on the wall.
The Dreamcast itself didn't fail Sega, Sega failed the Dreamcast to put it bluntly. Had "Dreamcast era" Sega been around since the middle of the Megadrive things would have been completely different but they squandered every lead they had by being Sega up to that point essentially and let a competitor take the market they had helped to foster right out from under them. They ran out of money and the public/industry ran out of faith in them.
It is interesting to think how SEGA had almost everything going for them potentially and how they seemed to screw it up again and again.
As with most things SEGA the main issue was the Japanese and USA branches civil war and struggle for power. Pretty much doomed the company.
SEGA Japan had the development and engineering talent while SEGA USA had the marketing know how and good relations with western developers.
The problem was that the USA branch had caught lightning in a bottle with the Megadrive release there and to also Europe as SEGA Europe back then was mainly just for distribution they didn't really make any big decisions.
The overall management looked at the relatively poor performance of the Megadrive in Japan who were facing an entrenched Nintendo with incredible brand presence and some dodgy protectionist practices keeping them well in the lead.
Japanese branch was likely getting compared unfavorably to the massive success abroad and so the rivalry ensued.
If the company had looked at things from a worldwide perspective and worked towards a single common goal most of the bullshittery that followed could have been avoided. That's the first thing that would need to have been fixed for this alternate timeline to play out.
I think releasing the Mega CD was a fine idea at the time and it was a serviceable add on, after all Nintendo was also looking into similar solutions so I don't really count this among their massive blunders but it certainly didn't set the world on fire and possibly should have been Japan only but again....at the time CD was going to be the big this so can't fault them too much.
Cutting support for the Megadrive was an absolutely terrible idea. Again mostly a pride thing from the Japanese branch as they finally felt that had something in the works that would be popular in their home market (Saturn) and thus didn't want to split their resources and wanted to focus only on the Saturn.
This allowed Nintendo to gain back a lot of ground in the US market towards the end of the 16-bit era (1994 - 1996). This also added to a narrative that SEGA don't support their hardware and will abandon on a whim. If SEGA had kept strongly supporting the Megadrive the way Sony/MS/Nintendo do in the transition phase/end tail of a consoles life then we could be looking at a very different course in the timeline, especially they wouldn't have lost mindshare in the marketplace and would have continued earning massive profits from Megadrive sales/software.
The next thing would be the stupid add ons. 32X should simply not have existed. The money that was wasted on R&D, production and marketing plus the development of games etc... could have been put to much better use within the company at large. The main reason for it again was the US/Japan tug of war. The Japanese branch wanted to stop focusing on Megadrive and go with their new baby but the US wanted to keep the "Genesis" brand going as it was a big success for them. If the 32X doesn't happen due to the above two points in this timeline being fixed then SEGA doesn't loose more money, mindshare and reputation in the market and whole company is focused on a single goal of success.
Add to this things like Nomad which shouldn't have existed, let's take those things out of the picture for this "better" timeline to exist. More money and reputation saved.
So far in this timeline we have a united SEGA working with great synergy and togetherness towards the single goal of worldwide success. We have a long supported Megadrive with some marketing push still behind it and more late gen releases. We have no bullshitty add-ons costing money and reputation in the market and we have a slightly weaker Nintendo in the market due to actually having competition in the tail end of the 16-bit era.
So this could potentially set up SEGA to be in a good position going into the 32-bit era.
Now it seems pretty obvious that the future was going to be 3D. Here's the thing SEGA were pretty much the pioneers for 3D gaming with their arcade business, they had created spectacle arcade experiences that wowed everyone. First 3D Fighter, Racing etc..
SEGA actually approached Lockheed Martin if I'm remembering correctly because they wanted to license their 3D flight simulator technology, or at least a cheaper version obviously. SEGA were ahead of the game in this field, you could say that at the time they had the strongest video game 3D development experience/understanding in the world at the time.
They should have leveraged this into their next home console and made the Saturn a 3D beast. The reasons for not doing this seem mostly to be a fear of cannibalizing their arcade business. "Why go to the arcade if they can get it at home?". Obviously it was a terrible read of the market to concentrate on a 2D first console at the time but I think even they could read the signs but the arcade business came first and their hope was to continue a 2 tiered system where arcades where like an "experience" where you saw the marvels of technology and home market was simpler games. Kind of like those analogies you see about the Cinema experience vs home video on a small CRT.
I can't stress enough how far ahead they should have been on this and how important it was at the time but how they dropped the ball hard. Almost makes my brain hurt.
Anyway to change the course of the timeline if they had focused on the start at making a powerhouse 3D console in the Saturn from the beginning which would also make it much easier to develop for things would have been very different.
Taking the other points of this timeline into account if SEGA come out of the 16-bit era strong and without the BS infighting if they go this route with the Saturn things are looking potentially very good for them. Megadrive still being supported for the early transition years to the 32-bit era. Nintendo still launching really late with N64 exactly as it is, Cartridges an all.
At the time lots of companies were fed up of Nintendo's shit policies and treatment of them and were looking for any excuse to get away from them, Nintendo launching late and going with carts rather than CDs helped seal that deal.
Even in our time line SEGA were making great headway in Japan and with Japanese developers. Like many had said Resident Evil, Tomb Raider etc... were originally going to be Saturn exclusives. So taking all of this into account with a non fumbled 16-bit tail era and strong foundation for the 32-Bit era things could have been very very different for the "new" timeline.
Now Sony were certainly no slouch, their marketing was amazing. They had the money to back up their play into gaming, they had solid hardware and they were offering a way out from Nintendo's grip and also the ability to not compete with the amazing first parties of SEGA and Nintendo, to have the spotlight. Definitely enticing for developers.
Also they were willing to co-fund development, assist with marketing or even pay for all marketing in some cases. Hard to refuse from a dev stand point.
Having said that in our timeline SEGA basically handed them their ball and the whole marker due to all of their blunders so these once Saturn games all because Playstation landmarks instead. But in the new timeline with a strong SEGA with a 3D focused Saturn launched on time and with good pricing it is very possible that Sony could have been ignored in the maket by the hardcore for someone they know and again the developers could have chosen to make most of those games Saturn exclusives.
So it's possible Sony could have fumbled with their foray into gaming and quickly disappeared like some before them. The Saturn could have essentially become the Playstation in terms of dominance, or maybe a slight less successful one without Sony's marketing prowess/financial backing.
Of course the market could have split more evenly with some developers such as Namco and others going mostly Sony and others going mostly Sega. With this Sony has their foot in the door with a solid contender but don't become the phenomenon that Playstation became and SEGA have a strong market presence with the Saturn, possibly leading the generation. This all assumes Nintendo goes exactly as they did in the real timeline so no specific changes there, N64 still launches late with cartridges and sells around the same it did originally.
It's important to note that this Saturn has a wildly successful Shenmue that's marked as a landmark title and system seller. The story completes etc... tons of great ports of things like Virtua Fighter, Sega Rally which actually become successful this time and are competent ports, plus other SEGA games that never existed that would likely have been developed become a strong Saturn library along with likely the lionshare of games that we know now as "Playstation" games.
Also as others have said, have a strong 3D Sonic game early in Saturn's life. This makes a huge difference to the market.
Obviously in this new timeline there is no Dreamcast as the Saturn was a successful generation.
After that it's pretty much impossible to tell where things could go as the timelines would diverge far too much to be able to predict anything. Would PS2 have still been a thing? Would it have been the phenomenon it was? Would Nintendo still make Gamecube? Would there be a Saturn 2? Would Microsoft buy SEGA? Would there still be an Xbox if they didn't?
Just too hard to tell but a fun hypothetical. SEGA had the opportunity to make that timeline a reality or at least elements of it in some form but they dropped the ball hard like nobody has ever done before. SEGA really is their own worst enemy. The main thing to take from it was the in fighting rivalry. Nothing else in the timeline happens unless that gets fixed as it's literally the crux of everything else. Looking at it like that it's pretty clear to pinpoint that as the main reasons for SEGA becoming what they did.
Don't forget... when there were 10/10Mbit home connections, Torrents / DC+ / mIRC etc were rife with fileshares. One of the reasons they then made home line upload speeds less.
I remember back in early 00's I had a friend who had a server hosted in UUNet's datacenter as he was an admin there... he ran it as a 0-Day site which was the biggest in Europe. He ran it for about 3 years before UUNet discovered the server lol