“Sega Genesis does what Nintendon’t.” With that line, in 1989 and 1990, a company with a small share of the American games market picked a fight with the company that owned most of it. For the next five years Sega and Nintendo attacked each other in television adverts, cut prices, fought over games, and argued in public about whose sales figures were true. Sega of America’s president, Tom Kalinske, said later: “I generally had this hatred for Nintendo, so everything they did, I started to figure out how to hurt it.” The fight made Sega, for a few years, Nintendo’s equal in America, and it taught a third company, Sony, how the game was played.
Nintendo’s market
When the Genesis arrived, Nintendo had almost the whole American market. How much depends on who is counting. David Sheff, whose history of Nintendo was published in 1993, wrote that it controlled “90 or so percent” of the American video game industry. Kalinske remembered it in 2013 as “94 per cent of the videogame industry, or maybe 98%”. Nintendo’s own figures, as Sheff reported them, put its share at “at least 85 percent” in 1990. Nintendo’s lawyer Howard Lincoln later looked back on the days “when we had 90% market share”, when Nintendo could refuse games it did not want because “we could dictate that”. Sega’s earlier console, the Master System, had never taken more than 5 percent, in Sheff’s account.
The tools of that control are described in the Nintendo Seal of Quality entry: a lockout chip, a strict licence for outside publishers and Nintendo’s hold over the shops.
The Genesis attacks
Sega’s 16-bit Mega Drive went on sale in Japan in 1988 and reached America as the Genesis in 1989. Sheff records that Sega spent $10 million advertising it and “attacked Nintendo head-on”. In the autumn of 1990 Sega’s own magazine, Sega Visions, announced a “national advertising blitz” under the “Genesis Does What Nintendon’t” line.
The first year was hard. Michael Katz, who ran Sega of America then, told Retro Gamer that Sega Japan wanted a million machines sold in America in the first year and had its American staff chant the Japanese word for a million. They sold about half that: “about 500K units — which I considered damn good — because Genesis was new, didn’t have a large software library initially, and the Nintendo franchise was hard to crack.”
Games came from an unexpected direction. Electronic Arts reverse-engineered the Genesis so that it did not need Sega’s permission to publish for it, then agreed a licence on far easier terms than Nintendo’s; the Electronic Arts entry has the details. Katz recalled that when Sega’s own Joe Montana Football ran late, he asked EA’s Trip Hawkins for a back-up Madden game, so that the first Montana game was, in his words, a “‘Madden back up’ from EA”. Sheff notes that four of EA’s nine Genesis games in 1991 reached the top ten best-sellers.
Kalinske, Sonic and the price cut
Tom Kalinske, a former chief executive of Mattel, was recruited by Sega’s president Hayao Nakayama in 1990 and replaced Katz. He told Retro Gamer what he did first: “I basically reduced the price from $200 to $149, I took [out] the bundled game Altered Beast [which, to middle America] sounded like devil worship … I insisted on putting Sonic The Hedgehog in with the hardware.” Sega’s managers in Japan thought he was “crazy to put our best title in the hardware”. He also pushed for games built on American sports, basketball, baseball and American football. Sheff’s account agrees: the Genesis came down to $149, packaged with Sonic the Hedgehog, and Sega boasted that in a market-research test “seven out of ten kids preferred ‘Sonic’ to ‘Super Mario World.’”
Nintendo launched the Super NES in America in 1991, two years behind the Genesis, with $25 million of television advertising, according to Sheff. The two sides immediately disputed the result. Nintendo said it would sell all 2.2 million machines it shipped in the first four months, and by the end of 1991 claimed to have sold more in four months than Sega had in two years; Sega’s marketing chief, Al Nilsen, answered that Nintendo had sold through only a million, “1.2 million at the most”, while Sega had sold 1.4 million Genesis consoles in the same period. “This is war,” Nilsen said.
Marketing war
Sega’s advertising made fun of Nintendo by name. Kalinske recalled a commercial with “a smoky old rundown truck with a Super Nintendo on the back”: “we basically equated it to a slow old truck. We were the sleek Ferrari.” The adverts ended with the Sega logo and the line “Welcome to the next level”, and, as Andy Eddy wrote in the 1999 edition of Sheff’s book, with the “Sega Scream”, a shout of “SE-GA!” that children took into the playground. The message, in the words of Nintendo’s sales chief Peter Main, was “We’re for older people, and they’re for children”. “In 1992, 1993 and on into 1994, we had it taken to us,” Main admitted.
Some of Sega’s claims were thin. The most famous, “Blast Processing”, named no feature in Sega’s developer documentation, as the Mega Drive entry explains, and even Nintendo Power joined in, reporting in 1993 that Sega’s own press people could not say what it was.
For Sonic the Hedgehog 2 in 1992, Kalinske told Retro Gamer, Sega announced “Sonic Tuesday” and shipped copies to every store in America to go on sale on the same day; he recalled selling “like 400,000 in two days” and more than a million in all.
Mortal Kombat
In September 1993 the two versions of Mortal Kombat showed how differently the companies saw their customers. Nintendo’s Super NES version replaced the blood with grey “sweat”; Sega’s Mega Drive version hid the blood and the original finishing moves behind a code. Sheff reported that the Sega version outsold Nintendo’s two to one. At the Senate hearings on violent video games that December, Lincoln and Sega’s Bill White attacked each other’s companies in public (see the 1993 hearings). Lincoln later admitted that Nintendo had used “the ‘Mortal Kombat’ experience as a learning experience”, and when Mortal Kombat II came out in 1994 Nintendo allowed the blood.
Who won the 16-bit war?
Both sides later agreed that the fight ended roughly level in America, though they did not agree on the details. Kalinske said in 2013 that “by 1993 we actually were equal to Nintendo and by 1994 we passed them in the share of market in the United States”. GamePro, reporting his departure in 1996, said he had “guided Sega to a 50 percent market share”. Nintendo’s Peter Main put it as “two strong guys splitting the market 55/45 or something like that” by the time the dust had settled, and said Nintendo had met its objectives. Retro Gamer wrote in 2006 and again in 2013 that Sega had 55 per cent of the market by 1992, but Nintendo’s own projection for 1992, as Sheff reported it, gave Nintendo 65 percent of the 16-bit market, so that figure is disputed.
Worldwide the picture was different. In Japan Nintendo still had 75 per cent of the market in 1994, by the Nikkei newspaper’s estimate, and Nintendo counts 49.10 million Super Famicom and SNES consoles sold in all. Retro Gamer put the Mega Drive’s worldwide sales at 30 to 35 million, only about a tenth of them in Japan; in Britain, Edge counted more than a million sold by the end of 1992.
Sony changes the fight
Nintendo had planned a CD-ROM drive for the Super NES with Sony, then announced a deal with Philips at the 1991 Consumer Electronics Show, the day after Sony had announced its “Play Station”. Sheff tells the story in detail, and the Sony entry follows what came next. Sony’s PlayStation went on sale in Japan in December 1994.
In America the next round began at the Electronic Entertainment Expo in May 1995. Kalinske announced that the Sega Saturn, due in September, was already in 1,800 shops at $399; Sony then announced the PlayStation at $299. “It must have been a blow,” Retro Gamer suggested to Kalinske in 2013, and he agreed that Sony had come in at a “far lower price”.
The sales figures were fought over again. Edge reported in May 1996 that Sony claimed 800,000 PlayStations sold in America by the end of 1995, and that the market researcher TNPD gave PlayStation 62 per cent and the Saturn 27 per cent of the year’s 32-bit hardware sales there. Nintendo’s Lincoln, whom Edge called “an admittedly biased source”, estimated only 150,000 to 200,000 Saturns sold. Edge pointed out that the companies published “sell-in” figures, the number of consoles sent to shops, not the number bought, and explained why: “videogame hardware battles are often won or lost on the basis of perceived momentum.” In Japan the Saturn did better; the Nikkei estimated that Sega’s share of the market rose from 12 per cent in 1994 to 32 per cent in 1995, while Nintendo’s fell from 75 per cent to 33.
The PlayStation won. Sony counts more than 102.4 million sold, against Nintendo’s figure of 32.93 million for the Nintendo 64. Kalinske left Sega of America in 1996. Sega’s last console, the Dreamcast, followed in 1998, and in January 2001 Sega announced that it would stop making it and publish games for other companies’ machines, including Nintendo’s.
After Sega
The rivalry did not end with Sega. Sony’s PlayStation 2 went on sale in 2000, and Sony counts more than 160 million sold. Microsoft entered with the Xbox in 2001, which public sources put at about 24 million sold, most of them in North America. The contest between Sony, Microsoft and Nintendo continued through the Xbox 360, PlayStation 3 and later machines; one flashpoint, Microsoft’s retreat in June 2013 from the online checks it had planned for the Xbox One, is described in the Microsoft entry.
The book and the name
The best-known account of the Sega and Nintendo years is Blake J. Harris’s Console Wars: Sega, Nintendo, and the Battle that Defined a Generation (HarperCollins, 2014), built on hundreds of interviews and centred on Kalinske’s time at Sega of America. It reads like a novel, and it should be read as one. In his author’s note, as quoted in reviews, Harris wrote that he “re-created the scenes in this book using the information uncovered from my interviews, facts gathered from supporting documents, and my best judgment”, and that “in certain situations, details of settings and description have been altered, reconstructed, or imagined”. Chris Suellentrop, reviewing it for The New York Times, found that “the reconstructed dialogue can be stilted and phony”. A documentary of the same name, directed by Harris and Jonah Tulis, followed in 2020.
Sources
- David Sheff, Game Over (1993; GamePress edition with new chapters by Andy Eddy, 1999): chapter 15, “Sonic Boom” (the Master System’s 5 percent; the Genesis launch, its $10 million of advertising and “does what Nintendon’t”; EA’s reverse engineering and licence; the $149 Genesis with Sonic; the disputed sales figures of 1991 and Al Nilsen’s “This is war”; the Super NES launch advertising); chapter 16, “Borders” (Nintendo’s share of “at least 85 percent” in 1990 and its 1992 figures); the preface to the 1999 edition (“90 or so percent”); Andy Eddy’s new chapters for the 1999 edition (Peter Main on “55/45” and “we had it taken to us”; the “Sega Scream”; Howard Lincoln on “90% market share”); the Sony and Philips story; the afterword, pp. 429–30 (Mortal Kombat outselling two to one).
- Retro Gamer issue 27, 2006, pp. 46–47: Mega Drive feature, with Michael Katz’s recollections (the first year, the million-unit chant, EA and Madden), Kalinske on Altered Beast and the $149 price, the Mega Drive’s estimated 30 to 35 million worldwide sales, and “By 1992 Sega had 55% control of the market”.
- David Crookes, “In the chair with… Tom Kalinske”, Retro Gamer issue 117, August 2013, pp. 90–95: Nintendo’s “94 per cent”; joining Sega in 1990; the price cut and Sonic pack-in; the truck commercial and “Welcome to the Next Level”; Sonic Tuesday; “by 1993 we actually were equal”; his “hatred” of Nintendo; the Saturn and the PlayStation’s price. A sidebar gives Sega “55 per cent of the American market” by 1992.
- Sega Visions vol. 1 no. 2, October 1990: the “Genesis Does What Nintendon’t” campaign, as cited in the Sega Mega Drive entry, which also cites Nintendo Power issue 49, June 1993, on Blast Processing.
- GamePro issue 97, October 1996: Kalinske’s resignation, “a 50 percent market share”.
- Edge issue 32, May 1996, pp. 6–8: Sony’s 800,000 PlayStations; TNPD’s 62 and 27 per cent; Lincoln’s Saturn estimate; “So why lie?” on sell-in figures and “perceived momentum”; the Nikkei’s Japanese market shares.
- Edge issue 23, August 1995: Kalinske’s E3 announcement of the Saturn, as cited in the Sega Saturn entry.
- The Mortal Kombat, Super Nintendo, Nintendo, Sony, Sega, Nintendo 64, PlayStation 2 and Xbox entries and their sources: the 1993 hearings and Lincoln’s admission; the Super NES’s American launch; Nintendo’s and Sony’s published sales figures; Sega’s 2001 announcement; the Xbox total.
- Nicholas Quah, “‘Console Wars’ Is a Deeply Flawed Telling of a Great Story about Videogames”, PopMatters, 18 August 2014 (web, secondary): Harris’s author’s note and “hundreds of interviews”. https://www.popmatters.com/console-wars-blake-j-harris
- Chris Suellentrop, review of Console Wars, The New York Times, 18 May 2014, as quoted in Wikipedia, “Console Wars (book)” (web, secondary), which also gives the publisher and the 2020 documentary. https://en.wikipedia.org/wiki/Console_Wars_(book)