Mid1990s Sega document leak shows how it lost the second console war to Sony

News Summary

  • All Sega had to do, according to the next slide, was improve its software, get pricing advantage, improve its advertising, spend better on TV advertising, and "dramatically improve" its game timing.
  • The retail margin on a core $250 Saturn system, without pack-in games, was 6 percent, or $15, while Sony seemed to be offering 10 percent core, 15 percent pack-in.
  • Enthusiasts and historians can see the costs, margins, and sales of every Sega system sold in America by 1997 in detailed business plan spreadsheets.
  • And you can read Kalinske's notes to marketing head Neil Cohen demanding 50 percent of the ad be game footage and asking, "When did we decide on Hare Krishna cult members?"
  • Strategies included "position Saturn as the technically superior next generation system," "leverage exclusive Saturn peripherals," and "strengthen sports line-up and ship titles concurrent with season.
  • The answer, according to Sega, is that it was perceived to be cheaper, its software "looks better than ours," that Sega "equity has been damaged by 32x and Sega CD," and that Sony has "effectively leveraged their considerable equity from consumer electronics."
Enlarge/ There are so many incomplete and esoteric thoughts on this note attached to a Brand Strategy folder in the Sega leaked docs that I will be thinking about it for days, if not months. What w [+4352 chars]