Why MS didn't buy Sega.

[kool kitty89]

I see the Mircosoft Corp purchase option of SEGA Corporation,Inc as a Japanese gamble that would have worked well financially but ultimately meant that SEGA would never be able to revive their Away 27 and AM3 dept and given Xbox a strong advantage in Japan. I personally think Isao Okawa wanted to save face and savage their home consumer legacy.

My previous comment was solely from MS's perspective. I wasn't saying that situation would have necessarily been good for Sega. (on that end, Sega might have avoided some of the corporate bureaucratic mess that comes with such mergers had there been contractual provisions for Sega to remain autonomous . . . but that's a big "if" for MS -that sort of merger wouldn't be comparable to the many mergers of MS with many smaller software houses, Sega was a different animal)

I think Toshiba probably would have been a much more profitable option for SEGA that would have pulled them out of debt much quicker than Sammy Corporation did.(For 4 years, SEGA was stuck with a $3 billion donut hole that was finally cleared in late 2008) But Toshiba was a partner of Sony and were fully behind the Playstation 2.

I'm not entirely sure, whether Toshiba wanted to handle SEGA. At the time, CSK was seen as a weak Japanese company, SEGA would have likely just been a bit of an afterthought, I believed they figured, SEGA wouldn't have made much leway or capital for Toshiba since Sony was a force to be reckoned with at the time. The Playstation brand once pulled in multi-billions of dollars.

The big missed opportunity was Bandai's merging with Namco rather than Sega. OTOH, Bandai probably would have been better off to start looking towards Sega sooner too. (like investing in the Saturn rather than the Pippin -even with all of Sega's problems in the mid 90s, they made for a much better game platform than Apple . . . let alone in Japan specifically)

Amusingly, Infograms bought the Atari name for the industry name recognition (today's Atari ≠ Nolan Bushnell's Atari). So I guess Atari went down that road as well.

Atari hadn't been "Bushnell's Atari" since he left in 1979, and Atari Inc had already been moving away from Nolan's "management" a good bit prior to that. From all I know about him, Bushnell really was not good for managing that company . . . way too self invested and not a good businessman. (a good motivator and good for bouncing ideas around though . . . he made a good "think tank" manager/leader if nothing else -same kind of thing with Pizzatime Theater, interesting idea, but one that nearly fell apart under his leadership only to become massively successful when taken over by someone more competent)

Warner Atari Inc (1976-1984) was responsible for Atari's greatest successes in the US game market as well as their greatest failures. The funding combined with better business management did wonders for the company, but lack of management that fully understood the nature of the game/entertainment market (let alone electronics) combined with a poorly managed distribution infrastructure (main cause for the inflated market that led to the crash) messed all that up. Ray Kassar was not the man for the job, he wasn't experienced in consumer entertainment or electronics (his history had been in the textile industry), though he was at least a capable business man. (too bad they hadn't brought in James Morgan back in '82 when the problems first emerged . . . starting what he did a year earlier would have done wonders compared to what happened in '83; '81 would have been even better, but Warner didn't have pressure to really make that change yet -things seemed "OK" . . . aside from division infighting, conflicting interests, and bureaucratic issues)
Kassar as president and Warner constantly double-managing things rather than letting Atari be (mostly) autonomous made a mess. Morgan was working hard to address all of that (including cutting out Warner's meddling), but it came too late . . . at least too late for Warner's taste (hence the liquidation in July 1984).


Then there's Atari Corp and Atari Games, formed in July 1984 with the liquidation of Atari Inc. Atari Corp being the renamed Trammel Technologies Inc which took on the consumer division properties of Atari (software IPs/licenses, patents, general infrustructure, etc -just not staff, since Warner had laid off all employees during liquidation, so it was up to Atari Corp to muddle through and find who they actually wanted/needed to bring onboard -it was a huge mess . . . then there's the whole mess of the 7800 not being included in the Atari Consumer purchase either, since that had been a separate deal with GCC and Warner specifically). Atari Corp is the Atari to bring out the ST and continue 8-bit computer and 2600 sales and support (and liquidation of the 5200), and release the 7800 in 1986. (probably could have been '85 at least, if not for the mess with Warner, maybe '84 if Warner had actually handled liquidation in an organized manner)

Atari Games was basically the arcade division kept mostly intact from Atari Inc and retained by Warner from 1984 to '85 when Namco acquired them, then they became independent in 1986 until Time Warner bought them in the early 90s. (this was the late 80s arcade Atari, and the Tengen one)

[kool kitty89]

OMG its so annoying with this talk about Sony like it was some big monster, responsible for killing poor Sega.

You'll have to forgive Sony for actually knowing what the hell they were doing in their approach to the gaming market, unlike Sega. They studied the market, presented themselves well to developers, did things smart, made GOOD, affordable hardware that wasn't a bitch to program for, etc.

Except that Sony pretty much copied Sega's business model from the early/mid 90s. A large portion of what made the Playstation successful in the US was very similar to what made the Genesis popular (European management wasn't that far off either).

That's also a big part of what made the Dreamcast as successful as it was when on the market.

Kind of ironic talking about low cost and ease of development and then looking at the PS2 compared to the Dreamcast in terms of streamlined hardware design and very well built "out of the box" libraries and tools. (also kind of funny thinking about PS1 games being emulated by the DC thanks to the programming libraries used -talking about Bleem . . . and actually allowed more enhancement than the PS2's PS1 compatibility modes, like PC Bleem did too)

[bultje112]

OMG its so annoying with this talk about Sony like it was some big monster, responsible for killing poor Sega.

You'll have to forgive Sony for actually knowing what the hell they were doing in their approach to the gaming market, unlike Sega. They studied the market, presented themselves well to developers, did things smart, made GOOD, affordable hardware that wasn't a bitch to program for, etc.

Whilst Sega had been blundering, making idiotic decisions like the 32X, and hemorrhaging money for years due to their substandard business practices and foolishness. If "Evil" Sony didn't beat them someone else would have. Either that or Sega would have finally made a stupid decision sooooo big that they couldn't recover financially. AKA: Releasing the 64x for the Dreamcast.

sega did all of that with dreamcast and sony didn't with ps2 and guess which system died and which system became the most succesful in the history of mankind...

[KnightWarrior]

I still don't know why Nintendo didn't try to buy Sega...

Sonic and other Games looks better on a Nintendo System

[Saturn Fan]

sega did all of that with dreamcast and sony didn't with ps2 and guess which system died and which system became the most succesful in the history of mankind...

That was after Sega was done fumbling about a billion dollars previously, and couldn't even afford to make the Dreamcast all that it could be with a DVD drive.

Not to mention only 1 analog stick on the DC pad? WTF?

And the PS2 was a great system. While not as easy to program for as the PSX, they still continued to do everything else right that Sega hadn't like DVD and dual analog, and had long since EARNED the trust of gamers and developers alike. So when it was announced it got the attention it Deserved.

I still don't know why Nintendo didn't try to buy Sega...

Sonic and other Games looks better on a Nintendo System

Excuse me?

[kool kitty89]

sega did all of that with dreamcast and sony didn't with ps2 and guess which system died and which system became the most succesful in the history of mankind...

The difference was that Sony was coming off from massive success in every major market with the PS1 and Sega was working its way back up from a huge dive between Genesis/MD and Dreamcast. It's like Nintendo coming off the NES, except with good (and relatively open) relations with 3rd party publishers and even more money than Nintendo had. (even relatively, for the market at the times of the SNES's launch vs PS2 . . . )

Hell, both the SNES and PS2 had hardware that wasn't the easiest to program for or the most cost effective either. The DC, like the MD, was cheaper and had a head start on the market along with expert marketing in the US, but unlike the MD, it was coming back from a situation relatively weaker than what had been the Master System (and especially the Arcade sales of that period), but also had problems in regions outside the US. (even in Japan, where the Saturn had fared very well, the Dreamcast didn't hold up as well as the MD had -which wasn't that good to begin with)

That was after Sega was done fumbling about a billion dollars previously, and couldn't even afford to make the Dreamcast all that it could be with a DVD drive.

Not to mention only 1 analog stick on the DC pad? WTF?

And the PS2 was a great system. While not as easy to program for as the PSX, they still continued to do everything else right that Sega hadn't like DVD and dual analog, and had long since EARNED the trust of gamers and developers alike. So when it was announced it got the attention it Deserved.

DVD would have killed the Dreamcast, and GD-ROM was an exceptionally innovative alternative. Sony owned many of the patents for the DVD-ROM format (as well as DVD video), so it was hugely expensive (console price wise) for 3rd parties to use at that point, while Sony had an in-house advantage. (even with Nintendo and MS using DVD technology, they at least dropped the DVD video support, or passed on the license overhead to a more limited add-on -in the case of the XBox)

Dual analog wasn't a huge deal breaker either IMO . . . and Sega didn't even get a chance to address that once it had become really important. (mainly with FPS games, which hadn't even standardized on that yet)

The bigger complaint for me would be the step backwards the DC controller was from the Saturn 3D pad, which was better in pretty much every way. (ergonomics, build quality, features -face buttons, etc) The 3D pad had actual advantages over 6th gen console controllers with those face buttons and excellent D-pad (ie definitive out of the box fighting controller, had it been used on the DC). Adding a 2nd analog stick/pad/nub or even a digital "hat" (like the Gravis Xterminator) for use with the right thumb would have been nice though. (as it was, the added buttons partially mitigated the need for a second stick the same way the N64 pad did)


The failure of the Dreamcast had everything to do with Sega's market position at the time (especially what had happened the previous generation) and their available funding. Things like DVD and controller design were nowhere close to being deciding factors.
Making that claim is even worse than blaming the Saturn's hardware design as the main reason for Sega's problems the previous generation. (it didn't help some things, but it's way down on the list of reasons for their problems being as bad as they were)

[bultje112]

That was after Sega was done fumbling about a billion dollars previously, and couldn't even afford to make the Dreamcast all that it could be with a DVD drive.

Not to mention only 1 analog stick on the DC pad? WTF?

And the PS2 was a great system. While not as easy to program for as the PSX, they still continued to do everything else right that Sega hadn't like DVD and dual analog, and had long since EARNED the trust of gamers and developers alike. So when it was announced it got the attention it Deserved.





Excuse me?

yeah that really was the final nail in the coffin

point is that after ps1, sony fucked everything up with ps2, but with tons of money and hype they made it the biggest succes in videogame history. while after the very succesful genesis/megadrive the saturn could do nothing right, appearantly

[Armoured Priest]

Atari hadn't been "Bushnell's Atari" since he left in 1979, and Atari Inc had already been moving away from Nolan's "management" a good bit prior to that. From all I know about him, Bushnell really was not good for managing that company . . . way too self invested and not a good businessman. (a good motivator and good for bouncing ideas around though . . . he made a good "think tank" manager/leader if nothing else -same kind of thing with Pizzatime Theater, interesting idea, but one that nearly fell apart under his leadership only to become massively successful when taken over by someone more competent)

Warner Atari Inc (1976-1984) was responsible for Atari's greatest successes in the US game market as well as their greatest failures. The funding combined with better business management did wonders for the company, but lack of management that fully understood the nature of the game/entertainment market (let alone electronics) combined with a poorly managed distribution infrastructure (main cause for the inflated market that led to the crash) messed all that up. Ray Kassar was not the man for the job, he wasn't experienced in consumer entertainment or electronics (his history had been in the textile industry), though he was at least a capable business man. (too bad they hadn't brought in James Morgan back in '82 when the problems first emerged . . . starting what he did a year earlier would have done wonders compared to what happened in '83; '81 would have been even better, but Warner didn't have pressure to really make that change yet -things seemed "OK" . . . aside from division infighting, conflicting interests, and bureaucratic issues)
Kassar as president and Warner constantly double-managing things rather than letting Atari be (mostly) autonomous made a mess. Morgan was working hard to address all of that (including cutting out Warner's meddling), but it came too late . . . at least too late for Warner's taste (hence the liquidation in July 1984).


Then there's Atari Corp and Atari Games, formed in July 1984 with the liquidation of Atari Inc. Atari Corp being the renamed Trammel Technologies Inc which took on the consumer division properties of Atari (software IPs/licenses, patents, general infrustructure, etc -just not staff, since Warner had laid off all employees during liquidation, so it was up to Atari Corp to muddle through and find who they actually wanted/needed to bring onboard -it was a huge mess . . . then there's the whole mess of the 7800 not being included in the Atari Consumer purchase either, since that had been a separate deal with GCC and Warner specifically). Atari Corp is the Atari to bring out the ST and continue 8-bit computer and 2600 sales and support (and liquidation of the 5200), and release the 7800 in 1986. (probably could have been '85 at least, if not for the mess with Warner, maybe '84 if Warner had actually handled liquidation in an organized manner)

Atari Games was basically the arcade division kept mostly intact from Atari Inc and retained by Warner from 1984 to '85 when Namco acquired them, then they became independent in 1986 until Time Warner bought them in the early 90s. (this was the late 80s arcade Atari, and the Tengen one)

Sorry. I should have probably been more specific when I made my statement (snark fail on my part ).



My comment was more a comment on perception. Many people see "Atari" and immediately think "oh hey...they're still around." when in fact the modern Atari is several steps removed from the original company. When I say "Bushnell's Atari" even with him leaving early on (You're very right, he's an idea guy, but not a good buisness manager), Warner's operation of Atari was a logical direct extension of what he started (for good, or bad). Warner had a fairly major share in the operation until Hasbro interactive aquired the Atari home assets in 98. Then, in 2001, Infogrames aquired the Atari license from Hasbro and rebranded their NA and Europe operations under the Atari name, in part due to name recognition.

My basic point was that Atari was, at least partially, the same incorporation until being aquired by Hasbro, and then aquired by Infograms.

[kool kitty89]

yeah that really was the final nail in the coffin

point is that after ps1, sony fucked everything up with ps2, but with tons of money and hype they made it the biggest succes in videogame history. while after the very succesful genesis/megadrive the saturn could do nothing right, appearantly

"Everything" is a big exaggeration . . . the screwed up specific areas of the programming/development environment and at a time when the market was moving on to libraries/APIs exclusively (opposite mistake of the 3DO ).
Reliability issues weren't really worse than the PS1 either.

They did so many other things right though, and again it's not really unlike what Nintendo did with the SNES except the SNES had one definitive competitor outside Japan while the PS2 had a group of others dividing the market and none being as definitively successful as Sega had with the MD. (and one dropping out before the 6th gen even went full mainstream)

Sorry. I should have probably been more specific when I made my statement (snark fail on my part ).



My comment was more a comment on perception. Many people see "Atari" and immediately think "oh hey...they're still around." when in fact the modern Atari is several steps removed from the original company. When I say "Bushnell's Atari" even with him leaving early on (You're very right, he's an idea guy, but not a good buisness manager), Warner's operation of Atari was a logical direct extension of what he started (for good, or bad). Warner had a fairly major share in the operation until Hasbro interactive aquired the Atari home assets in 98. Then, in 2001, Infogrames aquired the Atari license from Hasbro and rebranded their NA and Europe operations under the Atari name, in part due to name recognition.

My basic point was that Atari was, at least partially, the same incorporation until being aquired by Hasbro, and then aquired by Infograms.

Yeah, and my point was to detail things on Atari in general and to segue into the fact that Atari being "still around" but really a different company entirely has happened many times before. (I actually left out some of the things from the mid 90s onward -like where Atari Games and Atari Corp properties ended up after that)

[tz101]

I still don't know why Nintendo didn't try to buy Sega...

Sonic and other Games looks better on a Nintendo System

In the business world, its called a market analysis. Most likely, Nintendo conducted an analysis of the overall video game market and came to the conclusion that their financial resources were better spent elsewhere. With MS and Sony being such strong competitors, to acquire a company on the ropes like Sega was at the time was a risk they didn't want to take no matter how well Sonic looks on their hardware. Being prudent with investment strategy is what keeps companies like Nintendo in business for the long haul. After all, though it is looked upon unfavorably by many, one must admit Nintendo was very business savvy with their non-compete agreements for devs in the 1980's and 1990's. Had they not taken this monopolistic stance, Master System and 7800 may have actually done better in the 80's console wars.

[kool kitty89]

In the business world, its called a market analysis. Most likely, Nintendo conducted an analysis of the overall video game market and came to the conclusion that their financial resources were better spent elsewhere. With MS and Sony being such strong competitors, to acquire a company on the ropes like Sega was at the time was a risk they didn't want to take no matter how well Sonic looks on their hardware. Being prudent with investment strategy is what keeps companies like Nintendo in business for the long haul. After all, though it is looked upon unfavorably by many, one must admit Nintendo was very business savvy with their non-compete agreements for devs in the 1980's and 1990's. Had they not taken this monopolistic stance, Master System and 7800 may have actually done better in the 80's console wars.

Nintendo was never in a position to buy out Sega at that time . . . Sega was far too large, powerful, and successful in and of itself. There'd have been no interest in Sega merging with Nintendo at that point.

Also, even without Nintendo's monopoly, they had a big lead in market interest in Japan on the hardware/software front (SG-1000 being weak, Famicom being awesome, and SMS coming late). Compelling marketing was a huge issue for all regions, and it's a big part of why the NES was so successful in North America as well as why the SMS did particularly well in parts of Europe (esp the UK). It was really down to marketing investments and skill.

There's a reason the 7800 vastly outsold the Master System in the US in spite of much inferior software and hardware capabilities, and that's down to market position and marketing. (brand name, distribution channels, pricing, etc)
The 7800 would have benefitted far more from Nintendo not locking in developers than Sega would have: limited funding (for marketing and R&D -including in-house software) combined with lock-out of a huge number of popular developers/publishers severely limited the game library on the 7800.

It may have been weaker, and late to market (compared to the intended 1984), but it made a very good lower-budget niche platform with a strong brand name and reasonably competent management. (grater success facilitated by that also could have spurred better in-house funding for marketing and software development -and possibly more aggressive hardware design for a next-gen system . . . not to mention cross-benefits for the Atari computer end of things)

Not pushing into Europe sooner (either releasing the 7800 or looking towards licensing European computer games) was a rather odd problem with the 7800 too. Launching in '89 was a big miss in that market, as was missing out on the wealth of compelling computer games from Euro developers. (quite possibly the best games in quantity not locked by Nintendo at the time)

[Knuckle Duster]

They were toxic. They had a powerful brand (nowhere near Atari or Nintendo for mainstream recognition), and a lot of IP. They also had poorly managed and dragged that brand through the mud for a generation while acquiring enough debt to kill their business and seriously drag down it's worth. If they weren't bailed out by Okawa & allowed to fall into bankruptcy, I'm sure everybody would have bid on a piece of Sega, if not the entire thing.


A lot of you guys are over-valuing what Sega was beyond 1996. It wasn't huge and successful. It was a huge, absolutely toxic company, propped up and bailed out for half a decade. Not worth buying.

You think boomers in North America knew the words Sega or Playstation as easily as the words Atari or Nintendo? Not a chance.
It was huge and when you say Sega it conjures up Genesis brand only, but even so it didn't become a media sensation like the 2600 or NES. Anybody jumping into the business, like Microsoft, would have known better. It would have been a head start for them, if it didn't cost more than it was worth to buy them out.

[Team Andromeda]

Nintendo was never in a position to buy out Sega at that time

Nintendo had like $3 billion more in the bank than SEGA - They could have bought CSK share in SEGA, if they really wanted too at any time. In the end I think the MS deal feel threw because it would have been seen has an Western corp talking full control of a Japanese corp (which never goes down well) and MS would have no real interest in SEGA AM divisions or its 500 odd Arcades in Asia (at the time)

[Da_Shocker]

Nintendo had like $3 billion more in the bank than SEGA - They could have bought CSK share in SEGA, if they really wanted too at any time. In the end I think the MS deal feel threw because it would have been seen has an Western corp talking full control of a Japanese corp (which never goes down well) and MS would have no real interest in SEGA AM divisions or its 500 odd Arcades in Asia (at the time)

Not sure I don't think Sega has ever been that revered in Japan though. Now MS trying to gobble up Square would've been extremely interesting to say the least.

[Moirai]

So do yall think that if MS had bought Sega the Dreamcast wouldn't have died? with Microsoft's immense amount of money they had/have available, they could have just started a huge marketing campaign for Dreamcast and the money would have just rolled right in.