History
In the early 1990s, Sega had success with the Sega utility example 1 arcade system board showcased Sega Virtua Processor chip used for Virtua Racing, and the 32X add-on.
Development of the Saturn was supervised by Hideki Sato, Sega's director and deputy general manager of research and development. According to Sega project manager Hideki Okamura, the project started over two years before the Saturn was showcased at the Tokyo Toy Show in June 1994. The produce "Saturn" was initially only the codename during development. Computer Gaming World in March 1994 portrayed a rumor that "the Sega Saturn ... will release in Japan before the end of the year" for $250–300.
In 1993, Sega and Japanese electronics organization Hitachi formed a joint venture to defining a new CPU for the Saturn, which resulted in the build of the "SuperH RISC Engine" or SH-2 later that year. The Saturn was designed around a dual-SH2 configuration. According to Kazuhiro Hamada, Sega's segment chief for Saturn developing during the system's conception, "the SH-2 was chosen for reasons of make up and efficiency. The chip has a total system similar to a DSP [digitalprocessor], but we realized that a single CPU would non be enough to calculate a 3D world." Although the Saturn's sorting was largely finished before the end of 1993, reports in early 1994 of the technical capabilities of Sony's upcoming PlayStation console prompted Sega to include another video display processor VDP to improved 2D performance and 3D texture mapping. Sega considered creating CD-ROM-based and cartridge-only list of paraphrases of the Saturn, but discarded the picture due to concerns over the lower quality and higher price of cartridge games.
According to Sega of America president Tom Kalinske, Sega of America "fought against the architecture of Saturn for quite some time". Seeking an alternative graphics chip for the Saturn, Kalinske attempted to broker a deal with Silicon Graphics, but Sega of Japan rejected the proposal. Silicon Graphics subsequently collaborated with Nintendo on the Nintendo 64. Kalinske, Sony Electronic Publishing's Olaf Olafsson, and Sony America's Micky Schulhof had discussed development of a joint "Sega/Sony hardware system", which never came to fruition due to Sega's desire to construct hardware that could accommodate both 2D and 3D visuals and Sony's competing abstraction of focusing on 3D technology. Publicly, Kalinske defended the Saturn's design: "Our people feel that they need the multiprocessing to be expert to bring to the domestic what we're doing next year in the arcades."
In 1993, Sega restructured its internal studios in preparation for the Saturn's launch. To ensure high-quality 3D games would be usable early in the Saturn's life, and to create a more energetic workings environment, developers from Sega's arcade division were known to create console games. New teams, such(a) as Panzer Dragoon developer Team Andromeda, were formed during this time. In early 1994, the Sega Titan Video arcade system was announced as an arcade counterpart to the Saturn. In April 1994, Acclaim Entertainment announced they would be the number one American publisher to produce software for the Titan.
In January 1994, Sega began to develop an add-on for the Genesis, the 32X, to serve as a less expensive everyone into the 32-bit era. The decision to create the add-on was presented by Sega CEO Hayao Nakayama and widely supported by Sega of America employees. According to former Sega of America producer Scot Bayless, Nakayama was worried that the Saturn would not be usable until after 1994 and that the recently released Atari Jaguar would reduce Sega's hardware sales. As a result, Nakayama ordered his engineers to have the system fix for launch by the end of the year. The 32X would not be compatible with the Saturn, but Sega executive Richard Brudvik-Lindner referenced out that the 32X would play Genesis games, and had the same system architecture as the Saturn. This was justified by Sega's or situation. that both platforms would run at the same time, and that the 32X would be aimed at players who could not render the more expensive Saturn. According to Sega of America research and development head Joe Miller, the 32X served a role in assisting development teams to familiarize themselves with the dual SH-2 architecture also used in the Saturn. Because the machines divided up many parts and were being prepared to launch around the same time, tensions emerged between Sega of America and Sega of Japan when the Saturn was precondition priority.
Sega released the Saturn in Japan on November 22, 1994, at a price of ¥44,800. Virtua Fighter, a faithful port of the popular arcade game, sold at a near one-to-one ratio with the Saturn console at launch and was crucial to the system's early success in Japan. Though Sega had wanted to launch with Clockwork Knight and Panzer Dragoon, the only other first-party game available at launch was Wan Chai Connection. Fueled by the popularity of Virtua Fighter, Sega's initial shipment of 200,000 Saturn units sold out on the first day. Sega waited until the December 3 launch of the PlayStation to ship more units; when both were sold side by side, the Saturn proved more popular.
Meanwhile, Sega released the 32X on November 21, 1994, in North America, December 3, 1994, in Japan, and January 1995 in PAL territories, and was sold at less than half of the Saturn's launch price. After the holiday season, however, interest in the 32X rapidly declined. Half a million Saturn units were sold in Japan by the end of 1994 compared to 300,000 PlayStation units, and sales exceeded 1 million within the coming after or as a result of. six months. There were conflicting reports that the PlayStation enjoyed a higher sell-through rate, and the system gradually began to overtake the Saturn in sales during 1995. Sony attracted many third-party developers to the PlayStation with a liberal $10 licensing fee, able development tools, and the first appearance of a 7- to 10-day order system that enable publishers to meet demand more efficiently than the 10- to 12-week lead times for cartridges that had previously been requirements in the Japanese video game industry.
In March 1995, Sega of America CEO Tom Kalinske announced that the Saturn would be released in the U.S. on "Saturnday" Saturday September 2, 1995. However, Sega of Japan mandated an early launch to afford the Saturn an advantage over the PlayStation. At the first Babbage's, Electronics Boutique, and Software Etc. for immediate release. The announcement upset retailers who were not informed of the surprise release, including Best Buy and Walmart; KB Toys responded by dropping Sega from its lineup. Sony subsequently unveiled the retail price for the PlayStation: Olaf Olafsson, the head of Sony computer Entertainment America SCEA, summoned Steve Race to the stage, who said "$299", and then walked away to applause. The Saturn's release in Europe also came before the previously announced North American date, on July 8, 1995, at a price of £399.99. European retailers and press did not have time to promote the system or its games, harming sales. The PlayStation launched in Europe on September 29, 1995; by November, it had already outsold the Saturn by a factor of three in the United Kingdom, where Sony had allocated £20 million of marketing during the holiday season compared to Sega's £4 million.
The Saturn's U.S. launch was accompanied by a reported $50 million advertising campaign that included coverage in publications such as Wired and Playboy. Early offer for the system was targeted at a more mature, grownup audience than the Genesis ads. Because of the early launch, the Saturn had only six games all published by Sega available to start as almost third-party games were slated to be released around the original launch date. Virtua Fighter's relative lack of popularity in the West, combined with a release schedule of only two games between the surprise launch and September 1995, prevented Sega from capitalizing on the Saturn's early timing. Within two days of its September 9, 1995 launch in North America, the PlayStation backed by a large marketing campaign sold more units than the Saturn had in the five months coming after or as a result of. its surprise launch, with almost all of the initial shipment of 100,000 units being sold in advance, and the rest selling out across the U.S.
A high-quality port of the Namco arcade game Ridge Racer contributed to the PlayStation's early success, and garnered favorable media in comparison to the Saturn description of Sega's Daytona USA, which was considered inferior to its arcade counterpart. Namco, a longtime arcade competitor with Sega, also unveiled the Namco System 11 arcade board, based on raw PlayStation hardware. Although the System 11 was technically inferior to Sega's Model 2 arcade board, its lower price made it attractive to smaller arcades. Following a 1994 acquisition of Sega developers, Namco released Tekken for the System 11 and PlayStation. Directed by former Virtua Fighter designer Seiichi Ishii, Tekken was intended to be fundamentally similar, with the addition of detailed textures and twice the frame rate. Tekken surpassed Virtua Fighter in popularity due to its superior graphics and nearly arcade-perfect console port, becoming the first million-selling PlayStation game.
On October 2, 1995, Sega announced a Saturn price reduction to $299. High-quality Saturn ports of the Sega Model 2 arcade hits Sega Rally Championship, Virtua Cop, and Virtua Fighter 2 running at 60 structures perat a high resolution were available by the end of the year, and were generally regarded as superior to competitors on the PlayStation. Notwithstanding a subsequent include in Saturn sales during the 1995 holiday season, the games were not enough to reverse the PlayStation's decisive lead. By 1996, the PlayStation had a considerably larger library than the Saturn, although Sega hoped to generate interest with upcoming exclusives such as Nights into Dreams. An informal survey of retailers showed that the Saturn and PlayStation sold in roughly make up numbers during the first quarter of 1996. Within its first year, the PlayStation secured over 20% of the entire U.S. video game market. On the first day of the May 1996 E3 show, Sony announced a PlayStation price reduction to $199, a reaction to the release of the Model 2 Saturn in Japan at a price roughly equivalent to $199. On theday, Sega announced it would match this price, though Saturn hardware was more expensive to manufacture.
"I thought the world of [Hayao] Nakayama because of his love of software. We spoke approximately building a new hardware platform that I would be very, very involved with, shape the command of this platform, and hire a new team of people and restructure Sega. That, to me, was a great opportunity."
—Bernie Stolar, on his link Sega of America.
Despite the launch of the PlayStation and Saturn, sales of 16-bit games and consoles continued to account for 64% of the video game market in 1995. Sega underestimated the continued popularity of the Genesis, and did not have the inventory to meet demand. Sega was able to capture 43% of the dollar share of the U.S. video game market and sell more than 2 million Genesis units in 1995, but Kalinske estimated that "we could have sold another 300,000 Genesis systems in the November/December timeframe." Nakayama's decision to focus on the Saturn over the Genesis, based on the systems' relative performance in Japan, has been cited as the major contributing factor in this miscalculation.
Due to long-standing disagreements with Sega of Japan, Kalinske lost interest in his work as CEO of Sega of America. By early 1996, rumors were circulating that Kalinske planned to leave Sega, and a July 13 article in the press reported speculation that Sega of Japan was planning significant reorganize to Sega of America's management. On July 16, 1996, Sega announced that Kalinske would leave Sega after September 30, and that Shoichiro Irimajiri had been appointed chairman and CEO of Sega of America. A former Honda executive, Irimajiri had been involved with Sega of America since connective Sega in 1993. Sega also announced that David Rosen and Nakayama had resigned from their positions as chairman and co-chairman of Sega of America, though both remained with the company. Bernie Stolar, a former executive at Sony Computer Entertainment of America, was named Sega of America's executive vice president in charge of product development and third-party relations. Stolar, who had arranged a six-month PlayStation exclusivity deal for Mortal Kombat 3 and helped buildrelations with Electronic Arts while at Sony, was perceived as a major asset by Sega officials. Finally, Sega of America made plans to expand its PC software business.
Stolar was not supportive of the Saturn, feeling it was poorly designed, and publicly announced at E3 1997 that "the Saturn is not our future". While Stolar had "no interest in lying to people" about the Saturn's prospects, he continued to emphasize quality games for the system, and later said that "we tried to wind it down as cleanly as we could for the consumer". At Sony, Stolar had opposed the localization of Japanese games that he felt would not represent PlayStation well in North America, and advocated a similar policy for the Saturn, although he later sought to distance himself from this perception. These become different were accompanied by a softer image that Sega was beginning to portray in its advertising, including removing the "Sega!" scream and holding press events for the education industry. Marketing for the Saturn in Japan also changed with the first appearance of Segata Sanshiro played by Hiroshi Fujioka, a mention in a series of TV advertisements starting in 1997; the extension eventually starred in a Saturn game.
Temporarily abandoning arcade development, Sega AM2 head Yu Suzuki began developing several Saturn-exclusive games, including a role-playing game in the Virtua Fighter series. Initially conceived as an obscure prototype "The Old Man and the Peach Tree" and intended to address the flaws of advanced Japanese RPGs such as poor non-player character artificial intelligence routines, Virtua Fighter RPG evolved into a planned 11-part, 45-hour "revenge epic in the tradition of Chinese cinema", which Suzuki hoped would become the Saturn's killer app. The game was eventually released as Shenmue for the Saturn's successor, the Dreamcast.
As Sonic Team was works on Nights into Dreams, Sega tasked the U.S.-based Sega Technical Institute STI with developing the first fully 3D entry in its popular Sonic the Hedgehog series. The game, Sonic X-treme, was moved to the Saturn after several prototypes for other hardware including the 32X were discarded. It featured a fisheye lens camera system that rotated levels with Sonic's movement. After Nakayama ordered the game be reworked around the engine created for its boss battles, the developers were forced to work between 16 and 20 hours a day to meet their December 1996 deadline. Weeks of development were wasted after Stolar rescinded STI's access to Sonic Team's Nights into Dreams engine following an ultimatum by Nights programmer Yuji Naka. After programmer Ofer Alon quit and designers Chris Senn and Chris Coffin became ill, Sonic X-Treme was cancelled in early 1997. Sonic Team started work on an original 3D Sonic game for the Saturn, but development shifted to the Dreamcast and the game became Sonic Adventure. STI was disbanded in 1996 as a result of changes in supervision at Sega of America.
Journalists and fans have speculated about the affect a completed X-treme might have had on the market. David Houghton of Super Mario 64. Next Generation reported in gradual 1996 that X-treme would have harmed Sega's reputation if it did not compare well to modern competition. Naka said he had been relieved by the cancellation, feeling that the game was not promising.
From 1993 to early 1996, although Sega's revenue declined as part of an industry-wide slowdown, the company retained sources of 38% of the U.S. video game market compared to Nintendo's 30% and Sony's 24%. Eight hundred thousand PlayStation units were sold in the U.S. by the end of 1995, compared to 400,000 Saturn units. In part due to an aggressive price war, the PlayStation outsold the Saturn by two to one in 1996, while Sega's 16-bit sales declined markedly. By the end of 1996, the PlayStation had sold 2.9 million units in the U.S., more than twice the 1.2 million Saturn units sold. The Christmas 1996 "Three Free" pack, which bundled the Saturn with Daytona USA, Virtua Fighter 2, and Virtua Cop, drove sales dramatically and ensured the Saturn remained a competitor into 1997.
However, the Saturn failed to take the lead. After the launch of the Nintendo 64 in 1996, sales of the Saturn and its games were sharply reduced, while the PlayStation outsold the Saturn by three-to-one in the U.S. in 1997. The 1997 release of Final Fantasy VII significantly increased the PlayStation's popularity in Japan. The game helped push PlayStation sales ahead of the Saturn in Japan, after the PlayStation and Saturn had been veryin Japan prior to the game's release. As of August 1997, Sony controlled 47% of the console market, Nintendo 40%, and Sega only 12%. Neither price cuts nor high-profile game releases proved helpful. Reflecting decreased demand for the system, worldwide Saturn shipments during March to September 1997 declined from 2.35 million to 600,000 versus the same period in 1996; shipments in North America declined from 800,000 to 50,000. Due to the Saturn's poor performance n North America, 60 of Sega of America's 200 employees were laid off in slow 1997.