SEGA

Sega’s performance has been so catastrophic for so many years now that barely anyone even raises an eyebrow any more when the company posts losses in the hundreds of millions of dollars. The firm’s most recent set of accounts, which saw it turn a projected small profit into another huge deficit, piled yet more loss on top of the $1 billion or so that has poured down the drain since 1996, costing many thousands of jobs. More worrying, though, is the company’s apparent unwillingness or inability to learn from any of its long, long catalogue of mistakes, and it’s that more than anything else which makes the future look so bleak. If you’ll bear with me for a moment, we’ll take a look back before we look forward, because before you can analyse the situation fully you really have to be aware of the size of the problem.

The Dreamcast happened at exactly the right time, and was willed to succeed by pretty much the entire industry, which was prepared, perhaps surprisingly, to forgive the firm’s utterly inept handling of the Saturn and throw its weight behind the new console at a time when the games business as a whole badly needed the sort of boost that’s usually provided by a new generation of console hardware. And briefly, it looked to many (who didn’t look too closely) that the DC might just provide that boost – it was a highly capable machine, technically impressive, attractively designed, relatively easy to program, boldly priced at just £199, coming with the biggest list of launch games of any console ever, and boasting the first-ever out-of-the-box internet access from a games console.

Indeed, so important did Sega apparently consider this online ability that they delayed the machine’s launch for three weeks while they ironed out a few blips in the system. Not only that, but they rushed the first-ever online-playable game for the system out a mere, er, nine months later. When the DC reached its first European birthday this October, that list of online Dreamcast games had swelled to an impressive total of, um, one. By the first quarter of 2001, online DC owners could have a dizzying choice of as many as four fully online-playable titles. Now that’s what I call focussing on an online future.

It almost beggars belief that, given Sega’s oft-stated directional shift towards a focus on online gaming, and the amount of cash pumped into the Chu Chu Rocket giveaway, that the online-gaming situation is so dismal this far into the machine’s life. What’s more, there seems little reason for it – Japanese DC owners have a wide selection of online-playable games, including many of the same titles that have been released over here inexplicably shorn of their online functions (Sega Rally 2, for example).

All of these failings, though, have paled beside the real dog’s egg in Sega’s Dreamcast omelette – the console’s marketing. Frankly a shambles, Sega’s marketing put paid to the DC’s chances of ever making the impact it needed to if its one-year head start over the PS2 was ever going to give it a chance of competing over the next few years. First came the decision to throw practically the entire launch budget at sponsoring a bunch of second-rate football teams, at a point in the season where none of them would even play until a couple of weeks before the machine hit the streets.

Next up, the company managed to get its entire cornerstone advertising campaign ("Up to six billion players") banned by the ASA for being misleading. Hard on the heels of that blow came the near-total absence of any advertising at all during the crucial Christmas 1999 season - the only one the DC would have to itself against the wilting PS and N64 - despite the presence of an absolutely stunning-looking triple-A killer app in the shape of Soul Calibur. (This non-campaign, in particular, strikes your correspondent as perhaps the most inexplicable decision ever made by humans since Hitler and his chums decided they’d like to take a winter ski-ing holiday in Stalingrad in 1941.)

Later in the year, the company went on to get much of their second major ad-campaign banned as well for irresponsible xenophobia (always likely to be asking for trouble when England’s drunken slobbering thugs were loose at Euro 2000), and then finally gave away their only major game of the summer for free at significant cost and delay their other potential summer hit, a terrific tennis game, until the point in the year when absolutely no-one in the known world was interested in tennis any more.

The really sad thing, of course, is that the Dreamcast now has some splendid software out there, and looks like having by far the most exciting games line-up of Christmas and 2001. It’s going out at a phenomenally competitive price (barely a quarter of the price of PS2 in real terms), with the cheeky DVD-player bundle perhaps Sega’s first marketing coup. But however hard you try – and I actually hope I’m proved wrong about this - it’s almost impossible to see how the format is going to survive beyond next year (something even Sega seem confused about, judging by recent muddled pronouncements). Third-party support for the DC has never been tremendous – whatever anyone says, if you don’t have EA on your side you’re always going to be in for a very rough ride - and it’s already waning as publishers compete to be the fastest to dump DC projects and gear up for what they hope and pray will be either the second coming of the Sony Messiah or the spectacular debut of the new Microsoft kid in town.

Despite success in the US, the DC just hasn’t built up the sort of userbase in its first year that will make it worthwhile for companies to try to carve out a niche away from the frenzied competition that’s on the way. Remember, by the end of 2001 the DC will be the oldest and creakiest of four consoles competing for the attention of the punters and the resources of the publishers, and the one with by far the least financial muscle behind it. (The proliferation of platforms that’s about to land on us is another worrying issue in itself, but we’ll get to that another day.) To stand a chance, the DC needed to have sold twice as many machines as it actually has by now, and that was never going to happen with Sega misguidedly trying to sell it on its skeletal online capabilities - the mainstream market, for a variety of reasons, just isn’t ready to embrace online gaming yet.

Sega’s (only) unique selling point in the eyes of the public is its unrivalled range of well-known and popular arcade properties, and the DC, with its Naomi-family hardware, was perfectly placed to take advantage of that. Any firm with an ounce of common sense would have marketed it as the Sega Super Home Arcade 57, pointed to a stupendous range of up-to-the-minute, relatively cheap to develop, arcade-perfect conversions (Sega seem, in the wake of Crazy Taxi, to have belatedly realised the potential goldmine they’re sitting on, with a whole bunch of big coin-ops scheduled to arrive over the next 12 months, but it’ll be too late by then) and the fact that this really was £100,000 worth of top-of-the-range arcade right there in your living-room for 200 quid, and waited for the punters to roll in, bringing the publishers and all the other games with them. Instead, they put their faith in BT and a bunch of cartoon mice in rockets, and no responsible person should now be feigning surprise at the result.

NINTENDO

You have to wonder when Nintendo are going to do the decent thing and simply change their name to Pokemon Inc. Had it not been for the colossal amounts of torture inflicted on innocent, enslaved and abused little woodland creatures by vicious and sadistic children the world over, the Big N would undoubtedly have been gazing into an abyss almost as deep and black as the one haunting Sega. Perhaps oddly, the lesson the firm has chosen to learn from the situation isn’t that games, not hardware, are where the money is, but instead the lesson that... um... well, I give up.

That said, the N64, which looked utterly dead last Christmas, has actually mounted a heart-warming last hurrah with a clutch of terrific and successful games like Perfect Dark, Zelda: Majora’s Mask and (of course) Pokemon Stadium, but a last hurrah is undoubtedly what it is. Third party support is all but non-existent, and the extent to which the machine relies on Nintendo itself to produce the big games can be all too easily seen by the fact that Super Mario 64, one of the console’s launch titles, is still occupying a position in the Top 10 that it hasn’t given up for almost 200 weeks. And with that support about to disappear as the company concentrates on the GameCube and Game Boy Advance, it’s probably the world’s safest bet to say that the N64 is, this time, about to get its last visit from Santa.

What you wouldn’t want to put a lot of money on, though, is the GameCube’s chance of mainstream success. Despite some tantalising previous hints from Hiroshi Yamauchi (who’s now delayed his retirement yet again until at least late 2001), Nintendo are still committed to being a hardware firm. Not being privy to the company’s internal accounts it’s impossible to say for sure whether it was actually economically viable for Nintendo to develop the N64 purely as a vehicle for a dozen or so of their own colossal franchises, but it certainly seems at least possible that it was. It could well be, then, that Nintendo are perfectly happy to knowingly produce the GameCube purely as a vehicle on which to sell the next heftily-priced instalments of Mario, Zelda, Donkey Kong and Pokemon, surrendering the mainstream ground once again to Sony and perhaps even Microsoft. For their sake let’s hope so, because the eccentric Japanese outfit has shown no signs of having either the nous or the inclination to compete with the big boys for the modern casual-gamer market, and as far as third parties go, most would rather staple themselves to the top of Mount Fuji by the nuts than jump into bed with the Big N after the N64 fiasco.

The GB Advance, though, is another kettle of fish entirely. After SNK’s short-lived and rather half-hearted attempt ended in inglorious failure, it’s hard to see anyone else challenging Nintendo’s stranglehold on the handheld market. Something else that’s hard to do is find any gamesplayer either in the industry or the general public who isn’t excited about the prospect of the Advance, with its massive graphical leap forward and backwards compatibility offering to trump even the startled surprise with which Nintendo received the success of the GB Color. Unless the company does something quite fantastically stupid, like pitch GBA games at £35 or something, that is. Did anyone else have a cold shiver just then, or was it only me?

"You can't fault ambition, but this type of goal takes an extraordinary amount of time to achieve. And what Sega does in the interim will have crucial bearing on the long term. By all means shoot for AOL territory - which is what Sega seem to be actually trying for, though they seem woefully under-resourced to compete with a company AOL’s size - but in the meantime you absolutely must not neglect why people bought into your brand in the first place. If you look at the Dreamcast owner demographic to date, it's clear that the online component is being massively overlooked by the machine’s buyers, so failing to service traditional consumers would be a fatal mistake."

"Lots of publishers are already canning their Dreamcast games, and I think most of the others will follow suit. It’s just not sustainable with the sales. Everyone in Japan was calling the DC ‘the six-month machine’ when it was launched, and its six months is up." – Garry Williams, Sold Out

"The Game Boy Advance is our lead punch in all this... again, our players, more discriminating than ever and looking for that quality piece of work, are willing to pay our kind of price point and stepping up to it in a big way."