Irimajiri Speaks Out About the Saturn, the 32X, and SOA’s Financial Troubles

Irimajiri's lecture very much echoes what we've also heard from Nakamura and Sato in recent years, with extra detail on the masses of stock that had to be written off and the slight bombshell revelation that Kalinske was effectively fired and didn't exactly leave of his own accord.

And now that all of these old and new translated accounts are lining up and painting a very interesting picture, we are definitely approaching a more accurate view of what really went down in the mid 1990s. With the big names that have came out of the shadows, I do wonder who will be next to talk about this side...

(on that topic - has anyone on here got Okunari's new Sega Hard Senki book yet as well? I don't know the extent to which it has any fresh insight, at least to us, but I have been seeing a fair bit of praise in posts from people who've read it through)

 

When adding bits from this, coupled with some other sources that talk about the mess going on the software side of things. It certainly gives an overall picture that Sega of America (between 1991 and 1996) was very very poorly managed in virtually all aspects.

It makes me wonder, how much of this (if any) applied to Sega of Europe.

 

Due to the console market there being less well-developed at that point in time, the overall economic downturn, and fewer Japanese sources talking about them, I think it's harder to tell - but one does get the distinct impression that though the worst of Europe's losses weren't as big as America's, they were certainly there and even known about at the time.

Them falling into the red before America aside due to the currency exchange instability aside, stuff like this does make me think about how Europe supported the Master System for a lot longer (lest we forget new games were being released as late as 1995), and how that may well have not helped coming on top of the MD/MCD/32X situation. And they too massively overspent on marketing of course, the £1 million budgeted television advertisements and all.

 

Imagine if all of this unsold stock from the 90s was still in a warehouse somewhere today, given the current retro gaming market $_$

It's interesting to contrast this problem with retailers in the US against the problems Sega Ozisoft had with the Dreamcast. From what I heard, one of the biggest botch ups with the Dreamcast in Australia (apart from the delays and zero marketing) was that Ozisoft forced a RRP price reduction on the Dreamcast hardware very soon after launch to a value below the initial wholesale cost, so retailers with unsold stock were forced to sell them at a loss, presumably with no option to return unsold stock or any kind of compensation. Needless to say, it was very hard to get your hands on the second wave of software beyond the initial launch titles, with most retailers essentially boycotting the Dreamcast after that.

 

I don't think SEGA Europe were much better, but I doubt they have the overheads or influence that SOA had, but SOE mismanaged their new Studio Gunnerbury Avenue set-up at great expense and we meant to have millions of unsold Mega Drive carts costing them millions. Like SEGA America, still believed the 16-bit market was there...
I've said it till I'm BLUE in the face. SEGA should have dropped the Mega Drive in 1994 and moved all focus and production for its console sector to Saturn.

I do wish SEGA had gone with the original plan for Jupiter along with Saturn for a lower entry point until Saturn's costs came down for the mainstream. I would have bought both systems and would have loved to have Die Hard Arcade with no loading screens and I would have got the Saturn version too.

What could have been...

 

I won't say 32X was an outright mistake, seems to me it just came too late in the game.
Sony & Nintendo were already moving on, and Sega wanted to do so too, but SOA got too stuck on their glory at the time.
I saw an episode of "What Happened? (by Matt McMuscles)" about the Saturn, and it confirms.
SOA failed to have proper insight back then and it bit HARD on all sides of Sega.
They should've moved on, all of them, on the same direction.
The Saturn might've still panned somehow, leading up to the Dreamcast's birth, but it might've panned way less than it did.

 

The 32X was a mistake , it split SEGA resources and even SEGA fans

All that said, I'm not a fan of Irimajiri-san either. SEGA Japan was a mess under his watch, the launch of the DC in Japan was even worse than that of the Saturn in the USA. Its launch should have been delayed for more units and when more key software was ready IMO. SEGA Rally 2 needed to be a showcase for the DC and its Internet functions and it was neither, SEGA GT should have been the game to get SEGA driving crown back, but it was a letdown and why the hell was it handed out to AM#1 and not AM#2 and Yu Suzuki, SEGA Japan looked to listen to much to silly focus groups on Arcade games were no more and the Saturn pad had too many buttons Ect.

And worse still Irimajiri-san looked to close Team Andromeda and merge them with the PC Division, which never made any sense to me. Ok I bias in that TA are my fav programming team in video game history, but still the group was making classic games and to close them after the epic Saga made no sense; so many Saturn games at that stage weren't selling

 

Nakayama -san was SEGA - Irimajiri-san killed the CSK SEGA I loved

 

It's very easy to conflate "Sega Europe" with "Europe, the continent". Strictly speaking, the business called Sega Europe only dealt with the UK market at first, before it was elevated above regional offices and became whatever it is today.

So "always losing money" could mean anything - I find it difficult to believe Sega weren't profitable in the UK between 1990 and 1994, but the same might not be said of Germany, for example.


For context, setting up a business called "Sega Europe" but only catering for the UK was almost fair game back in the day. I suspect a lot of UK companies saw themselves as "European" between the country joining the common market in 1973 and the signing of the Maastricht Treaty in 1993 - you're pitching yourself as a "gateway into Europe" for English-language world, or in some cases "UK = Europe, because we're the biggest market for this particular product or service, and it sounds like you're reaching more customers when you're not".

I'd say Maastricht was the cut-off point because it helped incite fears of a European super state, and politics. See also: the 20 years before Brexit.

 

I don't usually spend much time thinking about it, but it is very strange that the Dreamcast was basically out a year early in Japan, when out of all the markets in 1998 it was the one that was least suited to having a new Sega console out, given the decent status the Saturn was in there

 

SEGA Europe was the one market SEGA was able to beat Nintendo twice, really. From what I remember back in the day it was only really France where SEGA Europe didn't do that well
I will say mind SEGA Europe were nothing short of pathetic in the DC era, making so many bad calls it was untrue

It was because for all the talk, key software was being delayed and the DC launch in Japan was a disaster; The launch software lineup wasn't that great (it never was in Japan to be fair) and SEGA went from over 400,000 pre-orders to 250,000 to then barely being able to meet 100,000 pre-orders. So SEGA Japan upset over 400,000 fans who did, what most went on to do... and just wait for the PS2 instead.

When it was clear early in that NEC was having issues, SEGA Japan should have delayed the system launch and looked to have gone in March 1999 when software like HOTD2, Blue Stinger were ready to go and SEGA issues over hardware were cleared and it would have given key software like Rally 2, Sonic Adv more development time too.

In contrast, SEGA America was doing wonders with the DC, with great PR, a nice lineup of games, pushing the Internet and even getting small details like getting games case right, even down to using Japanese artwork (sometimes the USA version had more artwork that the Japanse version like for D2). SEGA America was badly let down by SEGA Japan and the muppets at SEGA Europe and think it was terrible and a bad move on Irimajiri-san to make Moore announce SEGA was pulling out of the console hardware business, that really was an announcement SOJ and Irimajiri-san needed to make

It was almost like SOJ were hiding behind SOA and blaming them, it was utterly pathetic. I never was a big fan of Irimajiri-san myself and also never liked the way Irimajiri-san and SOJ treated the likes of WARP after D2 or how they turned their backs on Camelot after SF III

I always thought too, that Moore was the best boss SEGA America ever had as well, but that's just me

 

Sega Europe was profitable up until FY93, they had a heavy loss of £100m in FY94 due mainly to a sudden strengthening of the Yen, a slowing down in the market (roughly flat in 93 after several years of exponential growth), and a price war with Nintendo who themselves had a mass of unsold stock from 1992 they had to slash prices on in 1993. Up until that point Sega Europe distributed nearly all third party games, and took on all the financial risk for manufacturing etc. So not only were they on the hook for overstocks of first party games, but also third party games. They ended this arrangement with third parties in early 1994. There was also the issue with lead times. Hardware numbers had to be ordered twice a year, with a six month lead time, so hardware for holidays was ordered in March for delivery in September (and vice versa). If the market changes in that time then you either pull forward some orders by airfreighting (cutting into margins), or have overstocks you have to discount to shift. It was a similar issue with software, where if you had an unexpected hit you could be waiting for months for more to get manufactured and shipped. The latter was solved in 1993 with Sega Europe manufacturing cartridges in Wales.

In 1994 all the top talent left Sega Europe for Sky, and Japan installed Malcolm Miller in charge with a massively decreased budget and the task of returning to profitibility. He went about this by drastically reducing headcount, and getting rid of any of the remaining "expensive" talent from their successful years. SoJ just weren't interested in financially trying to compete with Playstation in Europe, Saturn never had a chance.

 

Thanks for the heads up - I wasn't expecting much business detail (especially not of the type in the leaked SOA documents), but was hoping there'd be some more on the R&D side of things e.g. the debate to make Saturn 2D or 3D-focused. Okunari is supposed to know where every other old developer is these days to the point of being nicknamed something like "policeman of Sega", after all...

 

Found the interview that mentions some of this, I think there's another one with someone else which mentions SoJ making them increase their FY94 business plan, but I can't find it right now.

 

The likes of Simon Morris were a huge loss to SEGA Europe he was a PR king , I think he left to join SONY.
My Auntie worked for AB Electronic when they were making the likes of Aladdin carts for SEGA

 

Oh cool, I need to make a wiki page for them at some point.

Simon Morris went to Sky initially, then some obscure "net" company after. Here's Nick Alexander from around the same time (Pearson was a Sky company too);



And Simon Morris;

 

I always thought Simon went to SONY 1st, thanks for the info. He was a massive loss to SEGA Europe and its always been a bugbear of mine that people look to credit SEGA America and SONY for cool advertising and SONY with trying to appeal to a more mature audience

SEGA Europe was doing that years before both and people like Simon were pushing the Sega Mega Drive to a more grown-up audience. Not just with sports sponsorship, the Cyber Razor cut and Private TV ads, but also have SEGA pods at Cathy Dennis gigs and Simon himself appearing on the James Whale Radio Show at 1AM on a Saturday morning to push the Mega Drive just after its UK launch.