Sega Thought They Were Killing Sony and a Lot More As per Leaked Document

Sega of America has just suffered a leak, one that reveals a lot of what was going on at the company during the console war with Sony in the late 90s. It was a time when Sega was still in the console manufacturing business before turning into the third-party game developer and publisher we all know today. The leaked 272-page document reveals that Sega of Japan was optimistic about Saturn’s performance in Japan and believed that the US market would also make similar returns for Sega in the coming months. In fact, Sega CEO Tom Kalinske was confident enough to claim at that time that they were ‘killing’ Sony in the market.

Sega thought they were winning the console war against Sony

What actually happened was something that Sega did not see coming. Not only did Sega fail tremendously in the US market, but Sony also caught up with them in the Japanese market. The leaked email (spotted by Exputer) dated March 28, 1996, was hopeful at best. It mentions how Saturn was outselling the PlayStation in 10 retail stores the CEO visited. He even wrote in the email that he wishes the entire staff of Sega could come and witness the performance of Saturn against Sony’s PlayStation. Kalinske also wrote that the Sega staff would understand why the company will win in the US eventually.

Sony PlayStation blew Sega off the console market with its performance. Sega’s Saturn sold 9.26 million units in its lifetime. Sony PlayStation had sold 102.49 million units in its lifespan. There was no comparison required.

Document reveals another reason why Sega Saturn failed

However, the document also revealed some interesting insight into why Saturn failed to win over the gamers market against PlayStation. The document mentions how the retail margin was only 6%. The retailers were earning just $15 profit per Saturn sold. While Sega CEO’s optimism was misguided, Sega of America admits in the document that “Sony product (software) looks better than ours.”

Sega CEO quit the company four months later. Sega’s huge loss in the console war did not knock them out of the console market just yet. They released the Dreamcast in 1999, only to see it defeated by Sony PlayStation 2 which still holds the record of best-selling console of all time with around 155 million units sold.