A retrospective that looks back to see exactly what made Genesis the most successful console of its day.
It was on August 14th, 1989 that Sega released the Genesis in the United States. They had bad luck with Master System, and they dropped Tonka, their previous distributor, and turned to Atari. Yes, Atari nearly launched the Genesis in the United States.
The name "Genesis" hadn't yet been chosen. In Japan and elsewhere the console is called Mega Drive, but some company called Mega Drive Systems, already had the name in the United States. Sega was planning on calling the console Tomahawk because they thought it was an "aggressive American" name, but Atari didn't like it. Perhaps they were envisioning protests by American Indians.
Former Atari programmer D. Scott Williamson explains how the name "Genesis" came to be.
“We had an office contest to see who could come up with a better name, I think the prize was a steak dinner. Steve Ryno came up with the name Genesis, either 'as the console that would redefine gaming,' or after the effect in the Star Trek II movie, either way it stuck. The deal (with Sega) later fell through and I don't know if Steve ever got his prize, but that is seriously how the Sega Genesis got its name.”
In the end, Sega decided to go it own their own and expanded Sega of America, which has previously only handled marketing and distribution. Back then company founder David Rosen was still running things. He eventually hired Michael Katz as CEO. Katz came up with the idea to give away Altered Beast as a pack-in and use celebrity endorsements to sell games.
"We could not compete with the strength of the Nintendo arcade licenses," Katz explains in an interview with Sega-16. "So as a defensive move, we decided to get personalities: Montana, Pat Riley, Lasorda, Michael Jackson, Holyfield; develop good games around them."
Along with making games with celebrities to help raise their profile, Katz had another idea, to use their marketing to aggressively take on Nintendo.
"We went with GENESIS DOES WHAT NINTENDON'T, which meant to the consumer: more powerful hardware, 16-bit graphics/animation, and exclusive personalities that Nintendo couldn't claim to have. This was smart marketing, and, as Howard Lincoln (from Nintendo) is quoted as saying, was what caused Mr. Arakawa (Nintendo of America's president) to admit privately, had turned the tide toward Sega in 1991."
Under Katz Sega didn't quite soar, though it was through no fault of his own. There were tensions with Japan, and Katz thought the idea of a video game starring a hedgehog was insane. The impossible task assigned to him of selling one million consoles in one year was also not met. In 1990 he was replaced with Tom Kalinske, who had been friends with Katz since they worked together at Mattel, where Katz was the marketing director and Kalinske had been the president.
After taking over, Kalinske quickly dropped the price of the system and went after Nintendo even harder. His team was instrumental in making Sonic the Hedgehog a western-friendly title and he made it the pack-in game. During this time Sega of America also expanded its in house development teams in order to make games geared specifically for the U.S. market.
"They said they didn’t like anything I had told them and disagreed with all of it, 100%." Kalinske explains how Sega of Japan opposed his decisions.
"They didn’t agree that we should advertise against Nintendo, staff up the U.S. to develop software, reduce the price of the hardware, or put our best title in with the hardware. I thought that well, this was the shortest career anyone ever had! That’s it, three months, and I have to go find another job. But at the door, as he was walking out, Nakayama turned and said, 'but we hired you to make all the decisions for the United States and Europe, and so, that’s what we want you to do, even though we think you’re crazy and don’t agree with it, go ahead and do it.'"
Tom Kalinske did it too. He took Sega from having a one percent market share in the U.S. to a 50 percent market share by 1994, making Sega the market leader in a field that was becoming increasingly crowded.
It was during this time that Sega partnered with Sony to develop the Sega CD, which both companies considered to be an experiment. Together the two companies learned how to put video games on optical media, with Sony outspending Sega on research. Eventually, Sega even included a game released under the Sony Imagesoft label as a pack-in for the system.
As a result, both companies agreed that optical media was the future. The partnership was so strong that a deal was made where Sega and Sony would jointly release a next generation console where the two companies split the losses on the hardware and keep the profits for whatever games each company published. It would have been a huge win for Sega since they'd save fifty percent of the hardware costs and get to keep all of the revenue for their own games. Sega of Japan torpedoed the deal. Later Sony would partner with Nintendo briefly before striking out on their own.
When Sega told Kalinske about their plans for the Saturn's surprise early launch he opposed it. The console wasn't ready. Nothing was in place. He pushed to support the Genesis another year instead while Sega continued development on a 32 or 64-bit console. The 32X had already launched and was in full swing. A 32X/Genesis combo, code named Neptune, was set to hit retail, and perhaps take the place of the Genesis Model II. The idea of the Genesis 32X was purely to extend the lifespan of the Genesis platform, which Sega of America strongly believed in.
"I think the folks who appreciated video games would have appreciated that we were still doing a lot of great product on the 16-bit hardware," says Kalinske, speculating on how the market would've reacted to Sega's continued support of Genesis into 1996 while it worked out the bugs with a next gen consoles.
Of course, during the Saturn's lifetime, Sega lost the goodwill that it had built in the United States; it lost friends at retailers, publishers, developers, media outlets, and most importantly, gamers left.
The Genesis, true to its name, was the dawn of a new era, not only of graphics and sound, but of the kind of attitude and maturity we see in games today. Without Genesis, the home video game console industry might not have grown up as fast as it did. All gamers owe thanks to Genesis for the influence it cast over the future of the entire gaming industry.
To this day Genesis lives on through collectors, retro game shops, and digital downloads. Still, no company has ever been cooler than Sega was during the 90s.