Titans Collide: A Nintendo x Sega TL

Prologue
  • Welcome to Titans Collide, the story of how two bitter rivals came together to change the video game industry. This timeline is based on the erroneous New York Times article published on December 27th, 2000 that stated Nintendo was in talks to buy Sega. In Titans Collide we explore the effects this has on not only the video game industry, but the rest of pop culture as well.


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    The year is 2000, and the video game industry is at a massive crossroads. The two titans of the industry throughout the late 80s and early 90s, Nintendo and Sega, were always looked upon as bitter rivals. Whether through advertisement campaigns, game releases, press conferences, or game shows, the two companies were always looking to one up each other in any way they could. That all changed when Sony attacked.

    The massively popular Sony PlayStation hit the market late in 1994 in Japan, and the rest of the world in late 1995. The age of 3D graphics had evolved the industry a lot, and Sony threatened the market shares of both Nintendo, and Sega. Ironically enough, both companies are owed to Sony's success.

    Sony's desire to enter the video game industry was fueled from spite after Nintendo backed out of a business deal for Sony to manufacture a Compact Disc (CD) based add-on for Nintendo's popular Super Nintendo Entertainment System. When Nintendo backed out on the project to accept a more lucrative offer from Phillips, Sony vowed to have their revenge.

    Meanwhile, as the development of the PlayStation was taking place, Sony was unsure if the system should focus on the safe bet, 2D graphics, or the risky and unproven 3D polygon-based graphics. Only after witnessing the popularity of Sega's 3D graphical game series, Virtua Fighter, in Japanese arcades, did Sony choose 3D graphics. The past five years of 3D graphics have proven their popularity, and it seems if the PlayStation had been a 2D system, it may have been forgotten.

    The last generation of consoles saw Nintendo and Sega both take massive plunges in market share. The Nintendo 64, while wildly successful in America, couldn't catch on at home in Japan. The Sega Saturn, with a weak line up and a confusing and expensive hardware, found little success both inside and outside of Japan. Sony's PlayStation outsold both systems combined in all three major markets, Europe, Japan, and North America.

    Last year, in an attempt to rectify their losses, Sega released the Dreamcast, which has featured a solid line up, and has had decent sales, but the company is still taking losses, and the release of the Sony PlayStation 2 has seemed to quash any momentum the less powerful Dreamcast has had. With Nintendo's unseen, yet recently announced 'GameCube' and Microsoft's upcoming 'DirectX Box' as future competitors, Sega has all but given up on selling the Dreamcast.

    The future ahead for Sega seems weary, though a recent New York Times article claims Sega is in talks with their larger, more lucrative rival Nintendo. What will the future hold for these titans of the video game industry as they deal with the massively successful PlayStation brand, as well as the newcomer to the ring, Microsoft? Find out in the next chapter!
     
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    Chapter One - Titans Collide
  • I know it's a week early, but I wanted to get a jump start!
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    The Deal
    It was a monstrous deal. On December 31, 2000 would be the day that changed gaming forever. That morning, Nintendo acquired Sega for $2 billion, in a move that shocked analysts around the globe. Sega's situation had been so desperate, they had sold themselves to their biggest rival, Nintendo. The deal came after failed talks with Microsoft, who had an amicable relationship up until that point. Sega's former chairman, Isao Okawa, had bolstered Sega with a loan nearing $500 million, though in his poor health now has forgiven Nintendo of the debts, based on various tenants of the sale. Nintendo has agreed to give Sega a prominent role in hardware development, and keep the Sega name for game development. Last year Sega had a net operating loss nearing $400 million, and it's unclear how Nintendo will utilize Sega for their current business.

    One part of the deal specifies Nintendo's treatment towards the Sega Dreamcast, which it pledges to support until May of 2001. Though Sega will no longer produce titles for the Dreamcast, third parties will continue supporting the platform until the release of Nintendo's upcoming console, now called 'GameCube'. Nintendo will cease production of the Dreamcast next week, and will ship the remaining units until the end of May, at a discounted price of $79.99. The future of the SegaNet service is in the air, but the sale specifies that Sega will continue to provide SegaNet on future Nintendo consoles. The deal also specifies that the Sega teams be given priority in developing Sega properties, though Nintendo will contain creative and quality control for those products.

    Nintendo is expected to reorganize their assets in the coming year, restructuring and incorporating Sega into their company, with a target date of February 1, 2001. Sega board members will not be retained but will be given vested stock options in Nintendo, or financial compensation as a part of the buyout. Sega of America will continue to operate seperate of Nintendo through the current fiscal year, ending in March, and potentially beyond that. The last game Sega will release for the Dreamcast will be Phantasy Star online, slated for release in late January 2001.

    The Sega arcade division would be closed in February 2001, in order to focus on home platform development. A skeletal crew would be in charge of technical support until early 2002.

    Restructuring Nintendo
    As a result of the merger, Nintendo was going to consolidate and restructure all of their subsidiaries and development teams. As a result of the merge, Retro Studios was merged with Sonic Team USA to form Sega America, and WOW Entertainment was dissolved. All Nintendo software development was merged into Nintendo Software (console games), and Nintendo Handheld (handheld games). Sega AM2 and Sega Rosso were merged to form Sega Software. All Nintendo hardware development was merged to form Nintendo Hardware.

    Nintendo Internal Research & Development (Nintendo)

    Nintendo Hardware
    Nintendo Software
    Nintendo Handheld
    Sega Software
    Sega America

    Nintendo Subsidiary Development (Owned by Nintendo)
    Amusement Vision
    Creatures, Inc.
    Hitmaker
    Nd Cube
    Overworks
    Smilebit
    Sonic Team
    NinSys
    United Game Artists
    Visual Concepts

    Nintendo Satellite Development (Partially owned by Nintendo)
    Ambrella
    Camelot Software Planning
    Game Freak
    HAL Labratory
    Intelligent Systems
    Noise
    Rare
    Skip Ltd.

    Gameboy Delayed?
    When Sega engineers first got to Nintendo Hardware, they brought with them new ideas about connectivity and internet. They also brought some design principles that would be used for the new 'GameCube'. Nintendo decided to postpone the March and June launches of the Gameboy Advance until Fall 2001, in order to implement some new ideas presented by the Sega engineers. The goal was to produce a cohesive landscape for Nintendo, with connectivity between both the Gameboy Advance and the 'GameCube'. These changes will be explored in the next chapter.
     
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    Chapter Two - Space World (1 of 4)
  • Our latest update in this saga skips forwards a few months to one of the most memorable moments in gaming history, Nintendo Space World 2001. The public had been eager for updates on Nintendo’s situation since the January acquisition of Sega, which led to a delay in the release of the promising GameBoy Advance. Meanwhile, as the PlayStation 2 continued its widespread success, rumors swirled that Nintendo and Rare may be parting ways. Nintendo had spent a lot of money in the past year, and owed answers to its shareholders.

    Therefore, Nintendo felt transparency might be the best path forward for this year. Shigeru Miyamoto pitch Hiroshi Yamauchi an expanded Space World. He envisioned a massive conference in America where Nintendo would show off the projects currently in development, announce the changes to the GameBoy, unveil the GameCube, and show off third party software. What Yamauchi liked the most, however, was the idea for a Q&A with important figures in the company. He figured this was the chance to regain shareholder and consumer confidence, and so plans began.

    In mid-March, Nintendo announced they would not attend May’s E3 Conference, but instead would be hosting Nintendo Space World 2001 just two weeks after the conference, on May 26th and 27th. The first day would be open only to gaming press, and the second day open to the public. Hosted at Bayside Convention Center in Boston, Massachusetts, this conference signaled Nintendo’s shift towards the American market, which had solely held up the Nintendo 64 in its later years.

    Conference Itinerary
    May 26th
    Welcoming Remarks (8a-9a)
    Connectivity: The Future of Nintendo (9a-10a)
    Nintendo Squared (10a-12p)
    GameBoy Advance (1p-2p)
    Nintendo Software, Nintendo Handheld Spotlight (2p-3p)
    Sega Software, Sega America (3p-4p)
    Press Q&A (4p-5p)
    Pokemon Spotlight (5p-6p)
    Rare: Into the Future (6p-7p)
    Future of the Arcade (7p-8p)


    May 27th
    Public Walkthrough (8a-11a)
    Public Q&A (11a-12p)
    Sonic Team & Subsidiaries (1p-3p)
    HAL Laboratory & Partners (3p-5p)
    Key Third Party titles (5p-7p)



    In our next update, we will take a trip into the conference center and watch Space World unfold.
     
    Chapter Three - Space World (2 of 4)
  • Welcoming Remarks
    As the press trickled into the Bayside Convention Center in Dorchester, Massachusetts they were greeted by a stage seating a few Nintendo icons, and some newer faces at Nintendo, who were increasingly learning the ropes. The stage sat Nintendo president Hiroshi Yamauchi, legendary game designers Shigeru Miyamoto, Takashi Iizuka and Satoru Iwata, Nintendo of America president, Minoru Arakawa, and Nintendo treehouse translator Bill Trinen.

    After the crowd had trickled in and settled down, Hiroshi Yamauchi (translated by Bill Trinen) opened, “Thank you for being here, last year was a crucial year in our company’s fruitful history. I cannot say in good faith that the Nintendo 64 was the success we hoped it to be, though ahead of its time in many ways. I will say, however, that our depth of exclusive, in house, and contracted games sets us apart from the competition in many ways. Developers like Rareware are the keystones of our business. In fact, while I have you all here, let me say this with one hundred percent certainty, Rare is not going anywhere. In fact, we are going forth with a full acquisition, and a deal with the Stampers is already in place.”

    Hiroshi Yamauchi’s change of heart as of late was evident, and brought on by the failure of SEGA, and his company’s absorption of their rival. He did not want to go the way of SEGA, in fact, he’d rather die than let Nintendo fall in the hands of a rival. And so, he began one of the most memorable parts of the speech.

    “The minds of SEGA have provided us with so much insight to developing both machines and games, and we’ve noticed some common critiques. ‘Nintendo doesn’t care about graphics’ they say. Ahh, but you’ll forget that the Nintendo 64 brought better graphics than both competitors, and that we pioneered graphical fidelity with great games like Donkey Kong Country. ‘Nintendo is a kid’s toy, not a mans machine’ they say, but they forget Goldeneye, Super Metroid, even Zelda, as well as the brand-new Conker. ‘Nintendo doesn’t have as many games’ they say. While there is some truth to this, we’ve consistently delivered some of the greatest games the industry has seen, year on year.

    One studio that consistently has crossed our mind in these regards is Rareware, a company so ingrained in our culture, they ought to be a part of us. And so they will be! Obviously, we’ve also brought in the talented minds from SEGA who will help us produce a dearth of new releases for our next console. What did you think, Nintendo would have our own conference and not mention our new console? *chuckles* Of course, in just a little bit you are going to see more of both our brand-new console and our refined GameBoy. You’ll also see more of some games previously shown, and a whole bunch of new titles too. We also have some surprises in store for you. I’d like to let some of our most important people offer you some welcomes as well, now.”

    Yamauchi handed the microphone to Miyamoto, “Welcome everybody! I’m excited to show you our newest games we have prepared for you.”

    Next, Iizuka, “Hello, welcome to you all, I’m very excited to bring to you our games to our new home at Nintendo, thank you!”

    Next, Iwata, “Hello, and welcome. We are very excited to show you the future.”
    Lastly, Arakawa. “Welcome everybody! I’m so excited to show you everything we’ve been working on.”

    The conference opened without a hitch, and everyone was antsy for the next part.

    Connectivity: The Future of Nintendo

    The next conference, Connectivity: The Future of Nintendo, was given by Nintendo of America president, Minoru Arakawa. Minoru opened up with a presentation on internet services offered in the past by both Nintendo and Sega. Next, the iconic Starman flashed on screen, and faded into text: StarNet coming soon.

    “StarNet is our next adventure into internet connectivity. Launching with our next console later this year, it will cost $49.99 a year, or $4.99 a month if you prefer monthly. This service will allow you to have online connectivity with your friends, connect to your GameBoy Advance, and even download certain titles. In fact, we’ve decided our next console will come with a 56k modem built-in for online fun, but you’ll hear more about that later.”

    More details were unveiled about StarNet: A new wireless technology would allow owners of their new console to connect to the GameBoy, a 20gb hard drive would be available for separate purchase allowing new updates to titles, as well as downloads of their favorite past games.

    Owners of the Sega Dreamcast would receive a free year of StarNet, and buying Nintendo’s new console would also give adopters a free six month trial. Arakawa went on to explain internet gameplay, and interactions between the Gameboy and Nintendo’s new console.

    The conference went well, with reactions all positive for the new StarNet.

    Nintendo Squared

    Hiroshi Yamauchi took the stage, on the screen behind him flashed images of past consoles, before the GameCube prototype, unveiled at Space World last August, popped onto the screen. It morphed from purple to silver, then faded out. Mario and Link flashed around the screen, and then it faded to black. A dolphin appeared on screen, swimming in an ocean before jumping in between what appeared to be an N and a 2, the dolphin formed the shape of a caret.

    “This, is the Nintendo Squared (stylized N^2).” The crowd looked shocked at the elevation the design had taken since last year’s “purple lunchbox”. This machine looked like the future, with a sleek silver shell, blue LED lights, and what appeared to be a DVD player. The audience roared with applause. It looked like a whole new machine. *

    “Last August, we previewed to you the Nintendo GameCube. Well, in the past few months, we’ve worked, with Sega engineers, to refine this next generation gaming experience. We present you the Nintendo Squared, the ultimate next generation machine. From cutting edge technology, to multimedia and internet support, we’ve given you the very best with this console.”

    Press flyers were distributed with the details of the new Nintendo Squared:
    • 737 MHz PowerPC “Gekko FX”**
    • 243 MHz ATI “Flipper”***
    • 32MB Main 1T-SRAM, 24MB Main DRAM, 4MB embedded video 1T-SRAM, 2MB Sound RAM
    • 56k Modem, Broadband Ethernet port as well
    • Wi-fi technology for connecting the GameBoy Advance
    • Accepts DVD-ROM and CD-ROM
    • WaveBird wireless controllers (up to 4)****


    Yamauchi went on to explain, “While these changes are very nice, they unfortunately have increased our expected launch price. We will be launching the GameCube at ¥34,999; $299.99; £299.99, in line with competitors. We’ve decided to launch worldwide in November of this year. November 18 in Japan and North America, and November 23 in other regions.”

    “We hope you enjoy this new console we’ve created for you. We’ll be showcasing some of its software later in the event.”

    *The Nintendo Squared looks a lot like the Panasonic Q without the arches on top
    **A custom version of the Gekko coming from the 750FX rather than the 750CXe
    ***Flipper with 50% higher clocks, much like the ATI Hollywood chip
    ****Nintendo decided to have one pack in WaveBird as the default controller.

    See more of Space World come part three, as we dive into the refined GameBoy Advance, Nintendo’s software line up, and third party offerings, thanks!
     
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