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SEGA –A Lesson In Marketing From A Position Of Weakness

April 14, 2022

Last time we were here, we talked about Nintendo and their smart tactics they used to corner the U.S. video game market in the mid 1980’s following the video game crash of 1983. Through their use of rebranding, limiting who could make games for their system, hardware innovation, giving game designers more creative control, limiting the number of games made, and creating a culture of gaming, Nintendo rebuilt the video game console market in the U.S.

By 1989 Nintendo had about 80% of the world video game market and over 3 billion worth of the market share in the U.S.

But Nintendo was not alone. Another company, SEGA, was also making games. The problem was, how could they get into the video game market when Nintendo not only built up the market, but owned 80% of it? SEGA also made a console in the 1980’s, the SEGA Master System, but it didn’t sell well. Honestly, as I’m writing this, I didn’t know a single person that owned one of these.

The SEGA Master System console

Credit: SEGA

What must have been infuriating to SEGA is that their machine is objectively more powerful than the NES. Looking at the specifications, aside from the audio, the SEGA Master System is better. Jeez, even Atari is better, and they were basically unheard of in the 80’s. It was how Nintendo operated as a company and made a culture around games that made them such a success and allowed them to corner the market.

A chart comparing the Nintendo, Atari, and SEGA consoles of the time

SEGA needed to change up their game plan if they wanted to thrive as a company and couldn’t rely on just technology to sell their product. They needed to do what Nintendo wasn’t doing. In 1989 SEGA made the Sega Genesis, a 16-bit console, releasing a massive marketing campaign. SEGA did something weird; they did not bother explaining how their new 16-bit game system was better as they learned that nobody understands technical details, so they used a new tactic.

The Sega Genesis was 16 bits, and Nintendo (NES) was only 8. That’s twice the bits! What is a bit? Nobody really knew, but “bits” are basically how much programming space and how fast the game can play. More bits can prevent choppiness in game play and game slowdown (if too many objects are on the screen, the game will slow down) or how much memory a game has for something like an RPG. Mostly bits impact graphics, and with more graphics and colors, you can have more detailed or complex games.

The SEGA Genesis console

If we’re talking about numbers of colors on screen, one color gets you nothing, it’s a polar bear in a snowstorm. Two colors you have something like checkers or tic tac toe, three colors you can see characters, etc.

An original advertisement for SEGA

Credit: SEGA

Step 1: Market your games AGAINST your competition. Nintendo has 80% of the market, target them in your marketing and you’ll target gamers. “Genesis does what Ninten-don’t” became SEGA’s marketing push, and it was true, with 16 bit games, the games were literally better. The hardware on the NES was not nearly as strong as the Genesis, so Genesis pushed that angle, hard. SEGA stopped trusting the customer to look at technical specifications and just showed what you could not do on Nintendo but what you could do on Genesis.

The cover for John Madden Football

Credit: EA Games

Step 2: Look at what games your rival does not sell, and then sell those games. Nintendo, for whatever reason, did not make very many sports games. When making official sports games, Nintendo had to use fake names for the teams, like the New York Zombies football team or the Chicago Blue Socks baseball team. SEGA went directly to places like the NFL, NBA, MLB and others to allow deals with teams, managers, and sports organizations to sell games with real players and real teams. You could play as your favorite team on a Genesis and you couldn’t on Nintendo. SEGA made all of the home console sports games, something that is still really popular for companies to do today, like Madden football.

The cover for the game Eternal Champions

Step 3: If your rival has a good idea, just copy it. Looking at this game box, what on here looks like SEGA copied it from Nintendo? (Seal of Quality) Sega took those business concepts from Nintendo and copied them because they were good ideas and helped Nintendo sell games to 80% of players.

The opening screen of Sonic The Hedgehog

Credit: SEGA

Step 4: Mascots are important. Mario is the mascot of Nintendo, so SEGA invented a mascot for SEGA, Sonic the Hedgehog. He was blue, he had an attitude, and he ran really fast. The fast running was a big aspect too, because on Genesis, Sonic COULD run really fast, and running fast is fun, and literally Nintendo does not have the hardware to have Mario move that fast. Not only does it show off the game play, but it also shows off the comparison between the Genesis and the NES and that one is faster than the other. Don’t tell me something is cool, show me that it is cool.

the words Blast Processing in the SEGA font

Step 5: Make up terms that sound like they mean something. SEGA learned that people don’t really know anything about technology, so they would use the term “Blast Processing'' in their marketing. The SEGA Genesis is fast because it has Blast Processing and the NES doesn’t. Even when Nintendo made a 16 bit console of their own, and one that was better than the Genesis in terms of power and speed, SEGA still said “Yeah, but Genesis has Blast Processing so it’s better” even though Blast Processing isn’t real. It’s like saying this zoom call has “Mind Rays'' that help you learn better.

A screenshot from Streets Of Rage

Credit: SEGA

Step 6: Nintendo is for little kids, SEGA is cooler and for adults. This was a big push in Sega’s marketing, that Mario was just saving a princess from a dragon and that’s boring fairy tale stuff. Blah blah blah. But, we have Streets of Rage with violence, and you can hit a guy with a lead pipe! Yeah! Nintendo won’t let you do that because it’s for kindergarteners.
While Nintendo did have strict standards about blood, gore, and violence, it still had these exact games. So while SEGA wasn’t totally correct about Nintendo and censorship, SEGA just needed the customers to believe it was true and show off their more mature “cooler” gameplay.

These tactics worked, for a while. Eventually Nintendo released the Super Nintendo in 1991 that was also 16 bits and had better hardware than the Genesis. SEGA leaned into its marketing and kept talking about Blast Processing and how Nintendo was for little kids. Also, look at how many games there are, there is a whole stack of games to choose from! Right, but if those games are garbage, why would I want them… we just did a whole quality vs quantity in 1982 and it crashed the entire industry!

This didn’t really work. Nintendo had changed the culture, and even though SEGA also made a Sonic cartoon show, by then it was too late. The Super Nintendo rapidly outsold the Genesis by making quality products in a tightly controlled way.

Next time we’ll talk about the “Bit Wars” and how that flooded the market with terrible products again.

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