SEGA’s Hideki Sato is a big figure in SEGA history, he was the mastermind behind all of SEGA’s major console hardware including the SG-1000, SEGA Master System, SEGA Mega Drive/Genesis, SEGA Saturn and SEGA Dreamcast.He later served as SEGA President from 2001-2003. Earlier this month he was part of an ‘oral history research project’ that is documenting the game industry in Japan. The transcript is over 150 pages long and all in Japanese. I can’t read Japanese, can you?
Well it seems that Gryson on the SEGA-16 boards knows some Japanese and he translated some of his favorite tid-bits, I’ll include the one about how he changed the SEGA Saturn to respond to PlayStation and of course the story about how PlayStation CEO
Hideki Sato on changing the SEGA Saturn design to respond to PlayStation:
The Saturn actually had just one CPU at the beginning. Then Sony appeared with its polygon-based PlayStation. When I was first designing the Saturn architecture, I was focused on sprite graphics, which had been the primary graphics up to that point.
So I decided to go with polygons (due to the PlayStation). However, there weren’t any people at Sega who knew how to develop such software. Of course, we had Yu Suzuki in the arcade department, but I couldn’t just drag him off to the console department. He was developing titles like Virtua Fighter and Virtua Racing. The expertise of all of the developers we had was in sprite graphics, so there seemed no choice but to go with sprites. Nevertheless, I knew we needed polygons. Using various tricks, adding a geometry engine and so on, I changed everything. In the end, just like the PlayStation, we had pseudo-polygons built on a sprite base. I felt no choice but to design a sprite-based architecture. Having said that, after some significant progress, pseudo-polygons did represent a “jump” in graphics in a certain way. There was a distinction of sorts. The processor was very powerful and could support 4,000, even 5,000 sprites, and I thought we could make the graphics work using a sprite engine after adding the Yamaha and such.
It seemed like we were finally nearing completion. Then, the final PlayStation was revealed. It supported 300,000 polygons. Well, that was ultimately a bunch of lies, but… When you compared the Saturn with the PlayStation, we were completely missing something. The response that I chose was to add another SH processor, so we ended up with two SH-2s. By chance, the SH supported two-way cascaded data transfer. You could add a second processor and connect them in a cascade and get multi-CPU performance. When you get to about the PlayStation 3, multi-processors had become common, but the Saturn was the first home console to use multi-processors. So I added a second SH-2, but I felt that the ‘impact’ was still weak. Well, the SH-2 is a 32-bit processor, and we had two of them, so we could call the Saturn a 64-bit machine. It’s a dirty way of getting to 64-bits. But we revealed the CD-ROM-based Saturn using 64-bits as our sales point.
Sony CEO Ken Kutaragi inviting SEGA to become 3rd party after Saturn bombs:
“To launch a new console, you really need 50-60 billion yen at the least. You have to sell those first million units. If your costs are 30,000 yen per unit, then that comes to 30 billion yen for 1 million units. And you have to design the hardware and create the electronics, make the molds and do the tooling, and this will soon use about 10 billion yen. And then you have to create the games and do advertising. You need about 500-600 people. Without all this, you can’t launch a home console. You can’t do it little by little. You really have to go all in.
Sony had annual sales of 3 trillion yen. They made their own CD-ROM drives. They had their own semiconductor factories. Once when I was talking with Ken Kutaragi [the creator of the PlayStation], he said “Hideki-chan”—he refers to me using the “chan” diminutive—“Hideki-chan, there’s no way you can beat me. Where are you buying your processors? From Hitachi. From Yamaha. What about your CD-ROM drives? You’re buying everything. By buying from Hitachi, Hitachi is profiting. You can’t make anything yourselves. We can make everything ourselves, including custom parts. We have our own factories.” Near Nakashinden, they had a huge factory where they made audio equipment that they were using for the PlayStation. Their cost structure was completely different.
“That’s the way it is, Hideki-chan,” Kutaragi told me. “So quit the hardware business. Why not just do software? We’ll give you favorable treatment.” He wanted us to go third party. We had been going for so long in the hardware business, for better or worse, and to go third party now? We had been half-heartedly successful in America once, and this made it impossible to quit the hardware business. Maybe if the Mega Drive, the Genesis, had been a failure, things would have been different. But we had a strange taste of success.
At that time, Sega’s brand image was incredible. When you powered on a Sega console, ‘SEGA’ would always appear first. Even if it was a third party game from Namco (or anybody else), Sega’s name always appeared first, followed by Namco’s. So anybody that had a Sega console, it didn’t matter what game they played, they would see Sega’s name. This helped plant the Sega brand in peoples’ minds. This was incredibly effective. To go from that to a Sony third party… Well, we had already started so it was too late.
I would have a polite dinner with Kutaragi about once every three months. He’d tell me that because we released a console last time, they would be the ones to do so this time. We are the same age, although he’s two or three months older. I would call him the polite “Kutaragi-san,” although sometimes I’d call him “Ken-chan.” Because I was two or three months younger, he’d say “Hideki-chan, please give up!”
So we released the Saturn, and in the end, it came down to software. It’s obvious, but what do consumers look forward to? They want fun games. And that’s where we failed.”