Sega Saturn

• 1. Introduction

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  On the 11th of May, 1995, Tom Kalinske took the stage at the very first Electronic Entertainment Expo in Los Angeles and changed the course of video game history with four words: "Sega has already shipped." Thirty thousand Sega Saturns had been quietly delivered to four retail chains while everyone in the industry was expecting a September launch. The move was audacious. It was also a catastrophe.

  The Sega Saturn was a home video game console born out of ambition, internal conflict, and a race against time. It carried eight processors, a dual-CPU architecture, and the weight of a company's entire future. Development had started in 1992. The console launched in Japan on the 22nd of November, 1994. By 1998, it was discontinued, having sold 9.26 million units worldwide. What went wrong, and how deeply, is a story worth telling in full.

  How does a console with technically impressive hardware, a beloved library of games, and a devoted fanbase end up remembered as a commercial failure? And what did its collapse cost Sega, and the entire industry, in ways that still echo today?

• 2. Eight Processors and a Deadline

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  In 1992, Sega and the Japanese electronics company Hitachi formed a joint venture to develop a new CPU. The result was the SuperH RISC Engine, or SH-2. Saturn's section chief for development, Kazuhiro Hamada, explained the reasoning plainly: "the SH-2 was chosen for reasons of cost and efficiency. The chip has a calculation system similar to a DSP, but we realized that a single CPU would not be enough to calculate a 3D world." So they used two.

  The Saturn's dual-SH2 configuration, each processor clocked at 28.6 MHz and capable of 56 MIPS combined, sat alongside six other processors including a Motorola 68EC000 sound controller, two video display processors, and a dedicated Hitachi SH-1 just to manage the CD-ROM drive. The architecture was remarkable on paper. In practice, it created nightmares.

  The two main CPUs shared the same bus and could not access system memory simultaneously. Making full use of the 4 KB of cache memory in each chip was critical. Virtua Fighter handled this by assigning one CPU per fighter character. Nights into Dreams split the load differently, using one CPU for 3D environments and the other for 2D objects. These were clever solutions to a problem that should have been solved in the design phase.

  A further complication arrived in early 1994, when reports about Sony's upcoming PlayStation prompted Sega to add a second video display processor to improve 2D performance and 3D texture mapping. The Saturn's design had been largely finished before the end of 1993; the late addition of the VDP2 reflects the reactive rather than proactive posture that would define the console's entire lifecycle. Hideki Sato, director and deputy general manager of research and development, later said he regretted not using the Model 1 arcade hardware as a base, in part because he had been too concerned about leaving behind developers focused on sprites rather than 3D.

• 3. The Surprise Launch

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  In March 1995, Kalinske announced a U.S. launch on "Saturnday" - Saturday, the 2nd of September 1995. Sega of Japan had other plans. They mandated an early launch to get ahead of the PlayStation, and so on the 11th of May, 1995, while Kalinske was still at the E3 podium in Los Angeles, he revealed that 30,000 units had already been shipped to Toys "R" Us, Babbage's, Electronics Boutique, and Software Etc. for immediate sale.

  Retailers not included in the early release were furious. Best Buy and Walmart were shut out. KB Toys responded by refusing to carry the Saturn or its games at all. The decision left the console with only six launch titles, all published by Sega, because third-party developers had scheduled their games around the original September date.

  Sony's response at the same E3 was surgical. Olaf Olafsson, head of Sony Computer Entertainment America, summoned Steve Race to the stage. Race walked up, said one word, "299", and walked off to applause. The Saturn had launched at $399. The PlayStation launched in North America on the 9th of September, 1995. Within two days, it had sold more units than the Saturn had managed in the five months since its surprise release, with nearly all of its initial 100,000-unit shipment sold in advance.

  The European launch on the 8th of July, 1995, repeated the pattern. At £399.99, with retailers and press given no time to prepare, the Saturn arrived before its announced date and was outpaced. By November, the PlayStation had outsold the Saturn by a factor of three in the United Kingdom alone. Sony had committed £20 million to holiday marketing there. Sega spent £4 million.

• 4. The Fall of Sonic X-treme

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  While Sonic Team worked on Nights into Dreams, Sega assigned the U.S.-based Sega Technical Institute to build the first fully 3D entry in the Sonic the Hedgehog series. The game, Sonic X-treme, had begun life as prototypes for other hardware including the 32X before being moved to the Saturn. It used a distinctive fisheye lens camera system that rotated levels around Sonic's movement.

  Then Hayao Nakayama ordered the game reworked around the engine from its boss battles. The developers responded by working between 16 and 20 hours a day to meet a December 1996 deadline. Weeks of progress were lost when Bernie Stolar cut off STI's access to Sonic Team's Nights engine following an ultimatum from Nights programmer Yuji Naka. Programmer Ofer Alon quit. Designers Chris Senn and Chris Coffin became ill. Sonic X-treme was cancelled in early 1997.

  The reactions from those who watched it die were vivid. Travis Fahs of IGN called X-treme "the turning point not only for Sega's mascot and their 32-bit console, but for the entire company." Fan site operator Dave Zdyrko put it plainly: "Sonic helped make the Genesis and it made absolutely no sense why there wasn't a great new Sonic title ready at or near the launch of the Saturn." In a 2007 retrospective, producer Mike Wallis maintained that the game "definitely would have been competitive" with Nintendo's Super Mario 64.

  Naka himself said he had been relieved by the cancellation, because the game was not promising. What did release in Sonic X-treme's place was a graphically enhanced port of the Genesis title Sonic 3D Blast, the compilation Sonic Jam, and the racing game Sonic R. The Sega Technical Institute was disbanded in 1996. Sonic Team's planned original 3D Sonic game for the Saturn eventually shifted platforms and was released as Sonic Adventure on the Dreamcast.

• 5. Management at War

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  Tom Kalinske publicly backed the Saturn's multiprocessing design, but Sega of America had "fought against the architecture of Saturn for quite some time." He tried to broker an alternative graphics arrangement with Silicon Graphics; Sega of Japan rejected it. Silicon Graphics then partnered with Nintendo on the Nintendo 64. Kalinske, Sony's Olaf Olafsson, and Sony America's Micky Schulhof had at one point discussed a joint Sega/Sony hardware system, which never materialized because the two companies disagreed on whether to prioritize 2D, 3D, or both.

  By early 1996, those internal disagreements had worn Kalinske down. Rumors of his departure circulated for months. On the 16th of July, 1996, Sega announced that Kalinske would leave after September 30. Shoichiro Irimajiri, a former Honda executive who had been with Sega since 1993, was appointed chairman and CEO of Sega of America. David Rosen and Nakayama resigned from their roles as chairman and co-chairman, though both remained with the company.

  Bernie Stolar, a former Sony Computer Entertainment of America executive who had arranged a six-month PlayStation exclusivity deal for Mortal Kombat 3, was named executive vice president in charge of product development and third-party relations. At E3 1997, Stolar publicly declared: "the Saturn is not our future." Working Designs, which had been localizing Japanese Saturn games, switched to PlayStation following a public dispute between Stolar and Working Designs president Victor Ireland. Grandia and Sakura Wars, two games that had driven Saturn popularity in Japan, never received Western releases under Stolar's policy of not localizing Japanese titles he judged would not represent the system well in North America.

  Nakayama resigned as Sega's president in January 1998 in favor of Irimajiri. In the fiscal year ending the 31st of March, 1998, Sega reported a net loss of ¥43.3 billion and a consolidated net loss of ¥35.6 billion. It was the company's first financial loss since its 1988 listing on the Tokyo Stock Exchange, following five years of generally declining profits.

• 6. What the Library Held

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  Between June 1996 and August 1998, Saturn owners in Japan bought 29,685,781 games, giving the console an attach rate of 16.71 games per console. That figure, the highest of the fifth console generation in Japan, suggests something important: the people who owned a Saturn used it.

  The console's Japanese library included the Sakura Wars series, co-developed by Sega and Red Entertainment, which blended tactical RPG mechanics with anime cutscenes and visual novel elements. Grandia and Dragon Force found devoted audiences there. In the West, Nights into Dreams, Panzer Dragoon Saga, Guardian Heroes, and Burning Rangers gave the console its critical reputation. Panzer Dragoon Saga, praised for its cinematic presentation and unique battle system, is considered by the review aggregator GameRankings as the most acclaimed Saturn game. Sega released fewer than 20,000 retail copies in North America.

  The Saturn's 2D fighting game library drew specific attention. Ports of Capcom titles including Vampire Savior, X-Men vs. Street Fighter, Marvel Super Heroes vs. Street Fighter, and Street Fighter Alpha 3 were praised for their faithfulness to their arcade originals. In 2015, Keith Stuart of The Guardian wrote that "the Saturn has perhaps the strongest line-up of 2D shooters and fighting games in console history."

  Brandon Sheffield of Necrosoft Games pointed out that the Saturn was the only console allowing an 18+ rating for content in Japan, making it a landing point for games too mature for other platforms. The cult following around titles like Panzer Dragoon Saga and Radiant Silvergun is partly a function of rarity and partly a function of quality. Only the first of three installments of Shining Force III was released outside Japan. The Saturn's library shaped an import market that grew in its wake.

• 7. Decline and What Remained

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  As of August 1997, Sega held only 12% of the console market. Sony controlled 47% and Nintendo 40%. North American Saturn shipments during the period from March to September 1997 fell from 800,000 units to 50,000 compared to the same period in 1996. In late 1997-60 of Sega of America's 200 employees were laid off.

  Only 7 Saturn games were released in North America in 1998. Magic Knight Rayearth was the final official release. The Dreamcast launched in Japan on the 27th of November, 1998, and in North America on the 9th of September, 1999. The gap between the Saturn's North American discontinuation and the Dreamcast's arrival left the Western market without Sega games for over a year.

  The Saturn's final worldwide tally was 5.75 million units in Japan, 1.8 million in the United States, 1 million in Europe, and 530,000 elsewhere. Its Japanese sales surpassed Genesis sales of 3.58 million there, and its Japanese install base of more than 6 million units exceeded the Nintendo 64's 5.54 million in that market. None of it was enough.

  Retrospective assessments from critics have been mixed but not unkind. Greg Sewart wrote that "the Saturn will go down in history as one of the most troubled, and greatest, systems of all time." Former Working Designs president Victor Ireland described it as "the start of the future of console gaming" because it "got the better developers thinking and designing with parallel-processing architecture in mind for the first time." Justin Towell of GamesRadar credited the Saturn 3D Pad, with its analog shoulder triggers and left thumbstick, as setting "the template for every successful controller that followed." Stolar, who took much of the blame for the Saturn's abandonment, defended himself simply: "I felt Saturn was hurting the company more than helping it. That was a battle that we weren't going to win."