The Sega-Sony Hardware System
(Wooh, finally got this ready enough to post! Sorry it took so long. This is my timeline about "WI Sega & Sony partnered up", based on what we know about their chance to partner with Sony. Me and Nivek have been working on this for a time behind the scenes, and we estimated the POD but of course there is no official confirmation on it yet afaik.)
Spring, 1993
Spring, 1993
San Fransisco, California, Spring of 1993. It was the headquarters of Sega of America, North American branch of the gaming corporation known as Sega, when a partnership that would go down in gaming history was made. It is difficult to remember what weather it was on that fateful day, but what is easy to remember was when Tom Kalinske, the man heading Sega's American branch as well as the man responsible for getting the Genesis - Mega Drive outside of North America - was informed that a small group of important people had arrived to visit him. As he soon found out, these were not just any people from the Japanese company known as Sony, but these men entering his office were Michael "Mickey" Schulhof and Olaf Olafsson - President of Sony America & the President of Sony Electronic Publishing respectively. Kalinske, the man who had definitely put Sega's name on the map and rose to the challenge of dethroning Nintendo, perhaps would have only foreseen this chance meeting later on in hindsight, as they said to him that day:
"Tom, we really don't like Nintendo. You don't like Nintendo. We have this little studio down in Santa Monica working on video games, we don't know what to do with it, we'd like Sega's help in training our guys. And we think the optical disc will be the best format."
That's when the reason for this meeting became clear, and the memories of the June 1991 Consumer Electronics Show (CES) came coming back to Kalinske.
Indeed, it did all start with Nintendo. Sony was very eager that fateful day to announce it's partnership with Nintendo had given birth to the 'PlayStation', a SNES-Compatible CD-rom & cartridge console, the long awaited 'SNES-CD' add-on. Kalinske would have been concerned about things, had the very next day not involved Nintendo announcing it's partnership with Philips to produce games for the CD-I instead. It didn't take a genius to understand that while attempts had been made to heal the rift between Nintendo and Sony, in the end all of it proved to be for nought, and by the time these two men of Sony arrived in Kalinske's office any semblance of Nintendo and Sony working together had long since passed.
Now, here it was. Sega's chance to deliver a harsh dose of 'karma' to Nintendo in the form of partnering with their own would-have-been ally, arriving right to Kalinske's doorstep. It was the perfect opportunity.
"I agree" Kalinske spoke with a nod, "In fact, now that you mention, there's this studio called Digital Pictures, I definitely think our partnership could help them out with financing."
From the start the two companies were in fact agreed on one thing - whatever the next platform was, it had to use optical discs. Luckily, Sega already had a CD-ROM attachment for the Genesis, the Sega CD (or Mega CD). Kalinske knew by 1993 - it was released in '91 - that it wasn't quite adequate, but it at least taught them how to make games for the format.
With both sides in agreement, it didnt' take very long for some of Sony's workers alongside Sega of America's engineers to work with specs for what their future optical-based hardware system would be. With these specs completed, the next step for Olafsson, Schulhof and Kalinske was to head off to Japan and meet with Sony's Ken Kutaragi. His exact words can't precisely be known, but they are known to have gone something such as this:
"I believe this a great idea! Of course though, we all lose money on hardware. However, if we make and market a single system, the Sega-Sony hardware system if you will, whatever loss we make, we split that loss!"
Kalinske couldn't agree more with the idea of this partnership, in some ways it seemed almost too good to be true. He wasted very little time in setting a meeting up with his superior Hayao Nakayama and the board of Sega Japan with the full hope that he would see things his way and agree to the partnership with Sony.
Hayao Nakayama had been the head of Sega since roughly 1984, far back in the SG-1000 II era, a time long gone by. The attitude within the boardroom of Sega's Japanese branch had been defined by an increasing desire to dominate more in the home country, since ever since the earliest days of Sega's time in the home console market their American and European branches had always out performed the Japanese branch, save for perhaps Arcades. Perhaps this desire had, or was beginning to, form into a bit of arrogance or envy towards their regional divisions, and of course Hayao Nakayama was always under pressure from the other members of the boards, some of which were largely against Sega of America's ideas. However, that did not by any means guarantee what the answer was going to be when Kalinske got his proposal through to Nakayama and the board. Speaking of which, when it was proposed to the board, many of them were more than eager to dismiss it as incompetent if not also outright ridiculous and pressured Nakayama to make the same call. However, what he ultimately said to Kalinske ultimately proved to be quite different from what would have likely been expected:
"I'm going to first say" he said, "That I personally am highly doubtful of Sony's hardware making abilities, let alone whatever software abilities they have. However, in light of the success that your branch of Sega has generated and your previous history, I am willing to give Sony a chance to perhaps prove us wrong about them."
His response was not quite what Kalinske had hoped for, but was still enough to make him metaphorically wipe sweat off from his brow with a sigh of relief, for a moment there it seemed like everything he worked for was about to go down the drain. Nakayama's decision did not sit well with members of the board however, and indeed some of them actually resigned from their positions because of it.
While at the time it was too early to tell, but little did they know the course of gaming history had been changed forever even with that half-hearted yes.
The next step however, was now on Nakayama's part. He knew that he was going to have to negotiate some sort of deal with Norio Ohga, the infamous head of Sony, if he was going to actually follow through on having any sort of yes. Perhaps, in fact, his urge to reject his answer and listen to what the Japanese board was telling him was from remembering the root cause of what made Nintendo fall out with Sony - liscencing disagreements. He had absolutely no intention of giving Sony anything less than equal in any agreement. Once he was in his office and out of the boardroom, he didn't hesitate at all to pick up his phone and place a call of the upmost importance:
"Hello" he said with as much a casual tone of voice he could muster as he phoned Sony's offices, still highly skeptical of doing this, "This is Hayao Nakayama, President of Sega, I'd like to schedule a meeting with Ogha-san."
Mr. Ohga, the head of the Sony corporation as a whole and one of Japan's finest, couldn't help but be surprised to hear that Hayao Nakayama of all people wanted to schedule a meeting with him. He had an idea of what it was about, in fact he was already aware of the ongoing scheme by the time Nakayama had called.
"Ah, yes" Ohga responded once he was on the phone with his potential future business partner, the two of them setting up the date of this meeting, "That would be a perfect date for this meeeting, I look forward to discussing this further with you in person, Nakayama-san."
As Norio put down his phone and resumed his usual work, he had the future in mind. Gaming was never something that he, as head of Sony, thought highly of. In fact, Sony practically looked down upon it as nothing more than a fad. However, the incident with Nintendo just two years prior had forced his hand, he had thought of trying reconcile with Yamauchi, but now he was more than decided that Nintendo's fate as his rival head been more than sealed by this point. Besides, the prototypes of the PlayStation had already been made. It was either partnering with Sega or going it alone. Ohga didn't take the other hardware producers seriously enough to even consider them as a partnership option, some moreso than others. For now, all he had to do was place a note on his calender for the meeting next week, and wait for the day to come.
This meeting, taking place the next Wednesday, would prove to be the moment of truth for all that Kalinske, Olaffson, Kutaragi and Schulof had worked on together thus far. Everything hinged on whatever Nakayama and Ohga could manage to agree to. The two of them went over the Sega-Sony Hardware system proposal and discussed the entire idea for what felt like hours at Sony's corporate offices in Tokyo. However, the true topic the two desired to discuss was the inevitable issue of how the licensing of this deal would be handled, and how deep that software development would go between the two corporations as well. The two executives both got a bit tense once this topic was finally reached, Nakayama preparing for an outrageous demand, while Ohga remembering the stress that dealing with Yamauchi had caused him. Luckily for the two of them, however, the lessons learned from Sony's fall out with Nintendo helped to perfect the agreement between the companies. The agreement that Nakayama and Ohga had negotiated on, which took the majority of the meeting for them to actually agree on, was crafted with the idea of giving both companies a fair amount of control over the software than was absolutely fair and necessary. Ohga agreed that Sony would share strictly equal control with Sega on the subject of the software licensing, though Sega would retain full control over first party & second party software including it's franchises, with the hardware agreements being made based on what the American teams & Kutaragi had agreed upon and set up for them. Finishing their long talk, they shook hands and gave each other the traditional bow of respect before taking their leaves, business had been concluding and the fate of the industry, had been decided.
"Tom, we really don't like Nintendo. You don't like Nintendo. We have this little studio down in Santa Monica working on video games, we don't know what to do with it, we'd like Sega's help in training our guys. And we think the optical disc will be the best format."
That's when the reason for this meeting became clear, and the memories of the June 1991 Consumer Electronics Show (CES) came coming back to Kalinske.
Indeed, it did all start with Nintendo. Sony was very eager that fateful day to announce it's partnership with Nintendo had given birth to the 'PlayStation', a SNES-Compatible CD-rom & cartridge console, the long awaited 'SNES-CD' add-on. Kalinske would have been concerned about things, had the very next day not involved Nintendo announcing it's partnership with Philips to produce games for the CD-I instead. It didn't take a genius to understand that while attempts had been made to heal the rift between Nintendo and Sony, in the end all of it proved to be for nought, and by the time these two men of Sony arrived in Kalinske's office any semblance of Nintendo and Sony working together had long since passed.
Now, here it was. Sega's chance to deliver a harsh dose of 'karma' to Nintendo in the form of partnering with their own would-have-been ally, arriving right to Kalinske's doorstep. It was the perfect opportunity.
"I agree" Kalinske spoke with a nod, "In fact, now that you mention, there's this studio called Digital Pictures, I definitely think our partnership could help them out with financing."
From the start the two companies were in fact agreed on one thing - whatever the next platform was, it had to use optical discs. Luckily, Sega already had a CD-ROM attachment for the Genesis, the Sega CD (or Mega CD). Kalinske knew by 1993 - it was released in '91 - that it wasn't quite adequate, but it at least taught them how to make games for the format.
With both sides in agreement, it didnt' take very long for some of Sony's workers alongside Sega of America's engineers to work with specs for what their future optical-based hardware system would be. With these specs completed, the next step for Olafsson, Schulhof and Kalinske was to head off to Japan and meet with Sony's Ken Kutaragi. His exact words can't precisely be known, but they are known to have gone something such as this:
"I believe this a great idea! Of course though, we all lose money on hardware. However, if we make and market a single system, the Sega-Sony hardware system if you will, whatever loss we make, we split that loss!"
Kalinske couldn't agree more with the idea of this partnership, in some ways it seemed almost too good to be true. He wasted very little time in setting a meeting up with his superior Hayao Nakayama and the board of Sega Japan with the full hope that he would see things his way and agree to the partnership with Sony.
Hayao Nakayama had been the head of Sega since roughly 1984, far back in the SG-1000 II era, a time long gone by. The attitude within the boardroom of Sega's Japanese branch had been defined by an increasing desire to dominate more in the home country, since ever since the earliest days of Sega's time in the home console market their American and European branches had always out performed the Japanese branch, save for perhaps Arcades. Perhaps this desire had, or was beginning to, form into a bit of arrogance or envy towards their regional divisions, and of course Hayao Nakayama was always under pressure from the other members of the boards, some of which were largely against Sega of America's ideas. However, that did not by any means guarantee what the answer was going to be when Kalinske got his proposal through to Nakayama and the board. Speaking of which, when it was proposed to the board, many of them were more than eager to dismiss it as incompetent if not also outright ridiculous and pressured Nakayama to make the same call. However, what he ultimately said to Kalinske ultimately proved to be quite different from what would have likely been expected:
"I'm going to first say" he said, "That I personally am highly doubtful of Sony's hardware making abilities, let alone whatever software abilities they have. However, in light of the success that your branch of Sega has generated and your previous history, I am willing to give Sony a chance to perhaps prove us wrong about them."
His response was not quite what Kalinske had hoped for, but was still enough to make him metaphorically wipe sweat off from his brow with a sigh of relief, for a moment there it seemed like everything he worked for was about to go down the drain. Nakayama's decision did not sit well with members of the board however, and indeed some of them actually resigned from their positions because of it.
While at the time it was too early to tell, but little did they know the course of gaming history had been changed forever even with that half-hearted yes.
The next step however, was now on Nakayama's part. He knew that he was going to have to negotiate some sort of deal with Norio Ohga, the infamous head of Sony, if he was going to actually follow through on having any sort of yes. Perhaps, in fact, his urge to reject his answer and listen to what the Japanese board was telling him was from remembering the root cause of what made Nintendo fall out with Sony - liscencing disagreements. He had absolutely no intention of giving Sony anything less than equal in any agreement. Once he was in his office and out of the boardroom, he didn't hesitate at all to pick up his phone and place a call of the upmost importance:
"Hello" he said with as much a casual tone of voice he could muster as he phoned Sony's offices, still highly skeptical of doing this, "This is Hayao Nakayama, President of Sega, I'd like to schedule a meeting with Ogha-san."
Mr. Ohga, the head of the Sony corporation as a whole and one of Japan's finest, couldn't help but be surprised to hear that Hayao Nakayama of all people wanted to schedule a meeting with him. He had an idea of what it was about, in fact he was already aware of the ongoing scheme by the time Nakayama had called.
"Ah, yes" Ohga responded once he was on the phone with his potential future business partner, the two of them setting up the date of this meeting, "That would be a perfect date for this meeeting, I look forward to discussing this further with you in person, Nakayama-san."
As Norio put down his phone and resumed his usual work, he had the future in mind. Gaming was never something that he, as head of Sony, thought highly of. In fact, Sony practically looked down upon it as nothing more than a fad. However, the incident with Nintendo just two years prior had forced his hand, he had thought of trying reconcile with Yamauchi, but now he was more than decided that Nintendo's fate as his rival head been more than sealed by this point. Besides, the prototypes of the PlayStation had already been made. It was either partnering with Sega or going it alone. Ohga didn't take the other hardware producers seriously enough to even consider them as a partnership option, some moreso than others. For now, all he had to do was place a note on his calender for the meeting next week, and wait for the day to come.
This meeting, taking place the next Wednesday, would prove to be the moment of truth for all that Kalinske, Olaffson, Kutaragi and Schulof had worked on together thus far. Everything hinged on whatever Nakayama and Ohga could manage to agree to. The two of them went over the Sega-Sony Hardware system proposal and discussed the entire idea for what felt like hours at Sony's corporate offices in Tokyo. However, the true topic the two desired to discuss was the inevitable issue of how the licensing of this deal would be handled, and how deep that software development would go between the two corporations as well. The two executives both got a bit tense once this topic was finally reached, Nakayama preparing for an outrageous demand, while Ohga remembering the stress that dealing with Yamauchi had caused him. Luckily for the two of them, however, the lessons learned from Sony's fall out with Nintendo helped to perfect the agreement between the companies. The agreement that Nakayama and Ohga had negotiated on, which took the majority of the meeting for them to actually agree on, was crafted with the idea of giving both companies a fair amount of control over the software than was absolutely fair and necessary. Ohga agreed that Sony would share strictly equal control with Sega on the subject of the software licensing, though Sega would retain full control over first party & second party software including it's franchises, with the hardware agreements being made based on what the American teams & Kutaragi had agreed upon and set up for them. Finishing their long talk, they shook hands and gave each other the traditional bow of respect before taking their leaves, business had been concluding and the fate of the industry, had been decided.
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The Saturn in this timeline has virtually no real competition in Japan at all.