Pack-in title: Necessary or not?

[Gryson]

The conventional wisdom is that the Genesis greatly benefited from having Sonic as a pack-in title:

There was a combined U.S./Japanese team working frantically on what became Sonic The Hedgehog, which wasn’t called that at the time. I said that we have to put that in with the hardware, and that really pissed them off, because they said I was nuts to want to put our best software title in with the hardware. They felt we already stood to make no money on selling the hardware, particularly if we followed my advice and lowered the price. If we then have no margin on the hardware and we put in the best software title, which should have a 65-70% gross margin, then we were giving up all that profit as well.*

The idea that a pack-in title was required to sell a console in North America (in contrast to Japan) was very strong in the 8-bit and 16-bit generations.

The Sony PlayStation was the first majorly successful console to drop the idea of a pack-in. Ken Kutaragi personally fought with U.S. managers and retailers over this:

"Success overseas became possible only because these changes [(cleaning out U.S. management and implementing Sony Japan conventions)] were made," declares Kutaragi. The key factor was establishing a better approach to the software business. The first thing Kutaragi did was to discontinue preferential treatment of resellers that gave away software free of charge to customers who purchased the hardware. "This is something that must not be done in the software business. I vigorously persuaded the U.S. staff that software is not an accessory to the hardware."**

This strategy worked well for Sony, to say the least.

Factoring in the context of the times, do you think the Genesis could have survived / thrived by not offering its strongest title as pack-in, and instead lowering the console price by another $20 (a rough estimate of the cost of manufacturing a game)?


*http://www.sega-16.com/2006/07/interview-tom-kalinske/
**'Revolutionaries at Sony' by Reiji Asakura

[Sik]

Honestly I doubt it. People would have needed to purchase something anyway because the console would be unusable otherwise, especially true considering the ones deciding what to purchase were usually the parents and not the actual players (and so may have needed some guidance, a pack-in is a good way to nudge them).

That said, nowadays in general the situation is different since consoles have some use even without being bundled with a game as long as you connect them to internet (especially if there are already important games for download as opposed to just physical), and also since a lot of purchasers now are the players themselves, they may want a different game than the big one of turn. Bundles and pack-ins may still keep happening to help push the system through some big game, mind you (e.g. stores made their own bundles for Switch on launch even though Nintendo didn't make any game officially a pack-in), just that they probably aren't as critical.

[Tripredacus]

The Playstation and the PS2 (and the PS3) I would consider separate in this, because they were not totally useless without owning a game.

[Zygrunt]

Yeah, I think pack-in titles were a must back then and the choice of including Sonic shows how much of a gigantic task it was to try and challenge Nintendo. I think the reaction from Sega of Japan to that idea and the Ken Kutaragi comment about Sony show how much it makes sense financially not including a game (especially your best game) with the system but ultimately Sega needed to give that much away so the console had a real chance of showing what it could do otherwise it could end up repeating its Japanese performance.

[Vorenge]

These days, definite no. Especially because most pack-ins for me now add no value and are often shovelware. Back on the Genesis though, it was one of the best decisions Sega ever made, namely when they included Sonic...sorry Altered Beast. I agree with the idea that back then, the system did nothing without a game, and modern systems can do all sorts of various things almost out of the box with downloads of free content, play music, videos, and so on. As much as I loved my PS1, that Ken K just rubs me the wrong way. Maybe I got that feeling when he had thay snarky look holding the PlayStation up high like it was a blessed coveted item bestowed upon him from the gods to share with all the lowly street rats racing through the south towns.

[Black_Tiger]

Pack-ins weren't essential but a killer app early on was.

[Ecco]

Yeah I think it was needed back then, because that's what everyone was familiar with. NES was bought with the main idea of having SMB and Duck Hunt.

So yeah, Genesis needed something else like that, and Sonic worked well. SNES continued the trend with SMW packed-in.

Times are different now, but back then, people really did focus on the one big pack-in game, more than anything else, I think. So it was a choice of buying a console for SMB & Duck Hunt, or buying a console for Sonic (and then, buying SNES for SMW).

Later everything changed though. I bought my PS2 to play DVD's for example...

[Zygrunt]

My first video game was the Atari 2600 and it came with Enduro packed in. If it didn't and my father was required to pick a game by himself I would probably not be in a forum like this one nowadays lol

[cleeg]

I think it boiled down to things being, essentially, the same in technical terms until the PlayStation era. That console was a radically different prospect in terms of graphical and aural presentation. That was the USP / gimmick / hook that differentiated it, whereas the prior generation relied on the pack in to reel in the punters.

[Black_Tiger]

Yeah I think it was needed back then, because that's what everyone was familiar with. NES was bought with the main idea of having SMB and Duck Hunt.

So yeah, Genesis needed something else like that, and Sonic worked well. SNES continued the trend with SMW packed-in.

Times are different now, but back then, people really did focus on the one big pack-in game, more than anything else, I think. So it was a choice of buying a console for SMB & Duck Hunt, or buying a console for Sonic (and then, buying SNES for SMW).

Later everything changed though. I bought my PS2 to play DVD's for example...

The Base Set was pretty popular where I lived. Most people I talked to in the region had their NES set determined by whichever happened to be available where they or their patents went to buy one.

I think it boiled down to things being, essentially, the same in technical terms until the PlayStation era. That console was a radically different prospect in terms of graphical and aural presentation. That was the USP / gimmick / hook that differentiated it, whereas the prior generation relied on the pack in to reel in the punters.

The jump from pre-8-bit gen to 8-bit was more of a radical leap forward. 16-bit felt like enchanced 8-bit and late 16-bit blended into the 32-bit generation both with similar kinds of software and all of the pre-Playstation 32-bit consoles (32X, Jaguar, 3DO, etc).

[Daria]

Keep in mind also, while PlayStation may not have had a pack-in title it did have pack-in demos. Which gave new consumers at least something to play until they decided on what they liked. Also demos were huge with the PlayStation era in a way you didn't see with cartridges (because CDs were cheap and cartridges weren't). Magazines gave them away. Even if you didn't buy much software you could still have a stack of software to experiment with with.

[axel]

I don't like pack-ins. Let the consumer decide what they want.

But in the '80s and early '90s a pack-in game was standard practice, how well is your system going to sell when it comes with no software and consumers have no idea what the games are like beyond a couple of pictures on the box and a few seconds of footage in a commercial? Remember there was no YouTube to check things out beforehand, you really needed to include something that showed off what your console could do.

[Flygon]

Pack-ins make buying a console less scary. The bundled game is almost invariably good.

[Gryson]

Great comments here.

Some thoughts:

1) I doubt the PS1's demo disc really made much of a difference. It's hard to imagine anybody bought a PS1 with the expectation of spending significant time on the demo disc.

2) There are (at least) three advantages to NOT having a pack-in:
-Lower hardware sale price
-More consumer choice
-Driving profit to the killer software (Kutaragi's main point)

Some basic math: Assuming a low estimate of 15 million consoles sold in NA, which means 15 million pack-ins of first-party high-profit-margin games:

A profit of $35 (70% of $50) per game would equal $525 million. In comparison, Sega's net income for 1993, its best year ever, was $212 million.

So we're talking a significant chunk of change being lost here. Of course, removing the pack-in won't necessarily result in an additional game sale per console, but it's still going to be significant.

Granted, if the console won't sell because people expect a pack-in, then yeah, you have to have a pack-in.

However, the PlayStation was in a worse position entering the market than its competitors, since Sony was a newcomer. The Saturn pack-in obviously didn't make a difference.

A pack-in might have made more sense for Nintendo, since they had other killer first-party titles that sold millions. But many of the Genesis's top-selling titles were 3rd-party (EA, Acclaim), and the profit there was significantly less.

We always assume that Sega was making the right decision in giving away its hot first-party titles, but I think it's worth a second thought.

[axel]

Great comments here.

Some thoughts:

1) I doubt the PS1's demo disc really made much of a difference. It's hard to imagine anybody bought a PS1 with the expectation of spending significant time on the demo disc.

2) There are (at least) three advantages to NOT having a pack-in:
-Lower hardware sale price
-More consumer choice
-Driving profit to the killer software (Kutaragi's main point)

Some basic math: Assuming a low estimate of 15 million consoles sold in NA, which means 15 million pack-ins of first-party high-profit-margin games:

A profit of $35 (70% of $50) per game would equal $525 million. In comparison, Sega's net income for 1993, its best year ever, was $212 million.

So we're talking a significant chunk of change being lost here. Of course, removing the pack-in won't necessarily result in an additional game sale per console, but it's still going to be significant.

Granted, if the console won't sell because people expect a pack-in, then yeah, you have to have a pack-in.

However, the PlayStation was in a worse position entering the market than its competitors, since Sony was a newcomer. The Saturn pack-in obviously didn't make a difference.

A pack-in might have made more sense for Nintendo, since they had other killer first-party titles that sold millions. But many of the Genesis's top-selling titles were 3rd-party (EA, Acclaim), and the profit there was significantly less.

We always assume that Sega was making the right decision in giving away its hot first-party titles, but I think it's worth a second thought.

I didn't know that about the PSX. Sony might have been a newcomer to consoles but so far as brand recognition they were one of the biggest names in electronics in the '90s, they had a reputation for putting out high quality products. Even before I ever saw a PSX game I figured it would be a big deal because Sony was behind it. (Of course, this was before I learned that Sony is actually several companies and quality control has been inconsistent on some of their product lines, in addition to some questionable decisions on how they interact with their customers).