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Why Did Sega Consoles Fail?

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Sega Games is a Japanese game developer. Sega was among the popular gaming brands in the 1980s. Sega started functioning by developing its first coin game in the late 1960s. After that in the 1980s, Sega developed video gaming consoles. Sega’s success with gaming consoles was not meant to last long and soon left the console market completely. Sega then put its efforts towards software development.

So why did Sega consoles fail?

There are many reasons as to why Sega consoles failed. A few of the reasons seem to be inefficient marketing, poorly developed games, and they seemed to prefer quantity over quality. 

If you would like to know more about why Sega consoles failed, you will want to keep reading this article. You can also watch this video to learn all about what ruined Sega. 

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Nintendo and Sega

In the 1980s, Nintendo was the king of the gaming sector. Nintendo had the monopoly on gaming systems and competitors could not match with them. That is when Sega entered into the fray. Sega introduced its Sega Genesis console in the year 1989. The 16-bit console had impressive graphics. Sega launched campaigns to kick off the console war. In direct competition with Nintendo, Sega introduced its character and mascot, Sonic the Hedgehog. 

The market was changing fast and Nintendo’s monopoly seemed to end with the dramatic entry of Sega. Nintendo was not the king anymore, but there was still a lot of competition from Nintendo Entertainment.

Sega’s success was not meant to last long and they soon left the console market completely. Sega put its efforts towards software development. But what led to the failure of the Sega consoles?

Inefficient Marketing

Sega was weaker in the marketing part of the consoles. It launched many of its consoles to compete with the competition and gain the focus of the consumers, but failed to interpret its product properly. It was the wrong marketing strategy. Once Sega called Nintendo’s games suitable only for kids. Sega said that their consoles are for real gamers and not for kids which disheartened the younger gamers.

After the failure of its previous consoles the Sega-CD and 32X, Sega launched its Sega Saturn. The competition from Nintendo and PlayStation surrounded it. Under the pressure of competition and continuous failure, President Tom Kalinske of Sega announced the premature launch of Sega Saturn, which was scheduled to be launched after 4 months. This shocked the retailers as there was no stock to sell due to the unexpected premature launch of Sega Saturn. This led to the creation of a poor image of Sega on its fans and in the market.

Poor Add-Ons

It became difficult for Sega to maintain its lead in the market since they were only developing systems and games to be in competition instead of developing for their target market. With this strategy, Sega unveiled several unsuccessful add-ons. One of them is Sega-CD, which was a disc-based add-on. There were a few games released on it. Because there were only a few games, it became a valid reason for consumers not to buy it.

There was huge pressure on Sega to keep up with its competitors. During the launch of Sony’s PlayStation, Sega was also close to the release of its new console. So because of this, consumers were expecting a new console, but Sega released a new add-on 32X for Sega Genesis instead on the same day of the launch of Sony’s PlayStation. After some time, they launched their next console, Sega Saturn. Because of this launch, consumers were in a dilemma to buy the new add-on 32X or buy the new console Sega Saturn.

Sega created the competition within itself with the release of a new add-on right before they released a new console.

Difficult for Developers

In 1994, Sega launched Sega Saturn and Sony launched its PlayStation. Sony was a fast mover in the market at this point. The graphics of PlayStation were much better than the graphics of Saturn.

It was difficult for developers to focus on Sega’s consoles as Sega had launched a new add-on before a new console. Also, Saturn had more complex hardware than PlayStation. The support provided by Sega to developers was extremely poor. This decreased the interest of developers in Sega and they turned towards PlayStation instead, which was more familiar than Sega anyway. PlayStation also released tools for third-party developers. This led to a strong support system for Sony.

Denying Microsoft

Microsoft was a popular international brand of computer software at this time. During the time of cut-throat competition between Nintendo and Sega, it was observing them and decided they wanted to enter the video gaming market as well. Microsoft asked to buy both Nintendo and Sega, but both of them refused.

After that, Sega had a poor sale of Sega Saturn and the stock of the new console was lying in the trash. Sega overlooked this stock and developed a new console as soon as possible to hit the market. During this time, Microsoft again approached Sega to develop DreamCast and to help them financially. But Sega rejected all of the offers and eventually Microsoft gave up and launched its own console, the Xbox, which turned out to be a strong competition to all gaming consoles in the market.

Quantity Over Quality

Sega was more focused on its competitors rather than its products. Sega Genesis and Nintendo’s console competed for a long time. Sega wanted to control the market, and it needed to keep impressing gamers. For this purpose, Sega launched its new add-ons Sega-CD and 32X. The developers worked quickly  to create games for these new add-ons. After the release of the add ons, within a year, Sega launched its new console Sega Saturn. Neither gamers nor developers were happy with this decision. Developers had to create new systems once again for the new console which was complex. Gamers also had to pay more for the new console because of the recent release of new add-ons.

In this rat race, Sega focused on quantity. It kept introducing new consoles with add-ons rather than improving its previous products and creating a supportive environment for both gamers and developers.

Slow Mover

Sega introduced the Dreamcast in 1998. It was the most powerful console that Sega had made. It was ahead of its time. Sega tried to improve its condition in the market with the launch of the Dreamcast, but it was too late. Sega has already lost its reputation and trust in the market. The Dreamcast was creative and had many innovative games, but it died too soon. Eventually, PlayStation 2 and GameCube came out in the market and it washed Sega out.


With continuous failure in its consoles, Sega was losing more money than they were making. Sega at this point couldn’t manufacture any more consoles. That left them with no choice but to leave the market to save itself from financial breakdown. So Sega left the market and focused on software development and publishing instead. 

Even though Sega is no longer making gaming consoles, some of the consoles that they did make were far ahead of their time, and were extremely loved by every gamer who played them. Sega didn’t do anything halfway, and even though they are not making consoles today, the Sega brand is still a highly sought after gaming console.