History of Video Games - Part 14
Dreaming Big
Catch Up on the Series
1 - Pressing Start / 2 - The New Industry / 3 - Have You Played Atari Today?
4 - The Great Video Game Crash of 1983 / 5 - Leave Luck to Heaven
6 - Now You’re Playing With Power / 7 - 8-Bit Magic
8 - Let’s Make Lots of Money / 9 - War Drums / 10 - Nintendo vs. Sega
11 - The Revolution Will Be Televised / 12 - The Dawn of a New Era
Sega’s Problems
In 1994, Sega launched the Sega Saturn to solid sales in Japan, only to execute the worst console launch in video game history. The blue brand ruined its momentum by doing a surprise launch and pricing its console at $399 (estimated at a whopping $799 in today’s dollars!). PlayStation took off and took the more “cool” mantle from them, turning the console wars into a Nintendo 64 vs. PlayStation battle. Sega of America hired former PlayStation executive Bernie Stolar to lead the way. Controversially, Stolar basically waved the white flag and said, “Saturn is not our future.” This statement killed any chance for Saturn to mount a comeback, even after it received substantial price cuts. Behind the scenes, Sega had begun work on the next console, which they hoped would launch a new generation. Sega of America and Sega of Japan were creating systems. Still, Japan would be the winner this time as Sega liked Saturn's success in their home country over the American stumble.
Sega went big for their new console, codenamed Project Katana. The system would focus on the growing online multiplayer movement and push graphics with a 128-bit processor, with more realistic graphics than the competition. To prevent pirating, Sega created a proprietary GD-ROM to hold the games. At the end of 1998, they launched the Sega Dreamcast in Japan, with Sonic Adventure - Sonic’s first proper foray into 3D gaming. After a successful launch, however, the system faced delays as developers didn’t seem ready to support a new generation when the current one was in its peak period. This even led to returns of the console as the hype for the PlayStation’s successor began to pick up. Sega would put all its eggs in one basket, focusing on success in the important North American market.
9.9.1999
The Sega of America team came up with what I would argue is the greatest marketing campaign for a new video game system ever. The company chose the date of September 9, 1999, to launch the system with the focus on the number nine (9.9.99). Sega would partner with MTV, an important cultural network for the teenage generation, to market and hype up the Dreamcast. I vividly remember one of my older childhood friends being excited for the console and following all the news he could on the system. The commercials, the magazine ads, and the MTV partnership were a perfect storm for one of the most highly anticipated console launches in history. The Dreamcast launched and temporarily took over the gaming world.
Sony’s Power Move
Unfortunately for Sega, Sony was already knee-deep in developing their next hardware, which would keep the naming simple and be called the PlayStation 2. They built their CPU and a new graphics chip called the Emotion Engine, which was more powerful and capable than Sega’s latest console. Eleven days after Sega launched the Dreamcast, Sony revealed the new system at the 1999 Tokyo Games Show - popping the party balloons of Sega’s party. The PS2 quickly became the must-have anticipated console, cutting off the momentum for Sega and the Dreamcast. It didn’t help that Sony announced the PS2 would have the ability to play DVDs at a time when the world began to embrace the new home media standard.
In March 2000, Sony released the PlayStation 2 in Japan. It was a massive success for the PlayStation brand and Sony as a whole. In less than a month, it sold over a million units, and it was hard to find one. Titles like Ridge Racer V, Tekken Tag Tournament, and Dead or Alive 2 led the way in their home region. Now, Sony had the rest of the world in their sights. In North America, Sony continued their target age around 17-19, keeping the brand as the “cool” or “it” brand in gaming. Despite the Dreamcast delivering solid games, Sega struggled as the PS2 hype was too much to silence. In October 2000, North America got the new console, and the rest, as they say, was history. Even with the hype and launch of the PS2, Sega had other problems beyond Sony, as their old rival and a new one weren’t going to be kept out of the conversation.
Dolphin
The competition wouldn’t outdo Nintendo as the hardware race pushed on. The company announced a partnership with IBM for its processor. ArtX was initially brought in to do the graphics chip, but that changed after ATI acquired the company, giving ATI the contract. Announced 1999 under the codename Dolphin, Nintendo looked to right the wrongs from some of the Nintendo 64’s failings. They aimed for a disc-based technology to ship their games on and wanted to tackle the Western market trends better. Tech demos and concepts would be shown for the system, promising powerful graphics for the time that made Dreamcast look old already. In August 2000, Nintendo finally gave the system an official name, the GameCube.
At E3 2001, Nintendo blew away the gaming press with GameCube’s software. Titles like Luigi’s Mansion, Super Smash Bros. Melee, Pikmin, and Metroid Prime showed what the console planned to bring to the table. Despite teasing using DVDs, Nintendo ultimately made a proprietary small disc for their games due to the company’s worry over piracy. Despite showing an array of colors early on, Nintendo released the system in black and purple, with the purple variant being the main image. This would prove to be one of a couple of mistakes the company made, marketing-wise, later down the road. Either way, the hype around the GameCube was real, and on a personal note, it was the first launch of a console I tracked all the way through and was legitimately hyped for up to the day I got it on Christmas 2001.
Yankees
The video game market had been dominated by Japan ever since the Atari crash. Ironically, the North American market went from crashing in 1983 to entering the new millennium as the most important region for the industry. Thanks to the PC gaming scene, Western games would break through, but the console market was mostly focused on Eastern games and genres. That would change thanks to four engineers at the world’s biggest software company—Microsoft.
Microsoft’s DirectX team members started to dream up a concept of a console that would utilize PC hardware and make it easier for PC developers to make games for the consoles. The modern consoles ran on proprietary customized chips, and making games for them could sometimes be a nightmare. Western developers preferred the more straightforward method of creating computer games, but lacked the same market penetration as home consoles. Seamus Blackley, Kevin Bachus, Ted Hase, and DirectX team leader Otto Berkes would get together and create this concept, eventually making its way to Bill Gates. At the time, Microsoft was going through a rough image as the Clinton administration had sued the company over monopolistic practices, and Gates was seen as a money-hungry billionaire.
Ironically, Xbox fans have Apple to thank for getting Microsoft into gaming. Apple’s Steve Jobs was brought back as the company was on the verge of bankruptcy. Gates, looking to prevent a monopoly to stop the federal government from messing with Microsoft, actually invested in Apple and began to bury the hatchet with Jobs over the debate around Windows being a stolen idea from Apple. At the Apple event where Gates announced his investment, he was booed loudly by the Apple faithful. It’s been reported that this made Gates question his image and would be the catalyst for the Gates Foundation and his work on bringing health and sanitation to poor countries. It also made Gates want Microsoft to be more than just a boring business company. So when Gates got hold of the four engineers’ dream of a console, he began to take notice.
“You’re Going to Make Us Lose A lot of Money!”
The four engineers have talked about a meeting on Valentine’s Day 2000, just before they were ready to start developing and revealing the new home console that would either greenlight the project or cancel it. Bill Gates and his eventual successor, Steve Ballmer, walked into the room and proceeded to grill them for hours as they sat and had to answer complex questions, while also being worried about being late for their Valentine’s dinner plans. At one point, Ballmer freaked out over the razor blade model consoles tended to do and yelled, “You’re going to make us lose a lot of money!” Eventually, cooler heads would prevail, and Gates decided to take a chance and greenlit Xbox. During the following year, there were still tense moments, such as Gates almost cancelling the project when he realized Seamus had lied to him that they planned to put Windows in every Xbox. Still, by mid-2001, it was a go.
Microsoft created a system in record time, essentially creating a custom gaming PC for the home. The system came with a semi-custom Intel Pentium 3 processor and an Nvidia graphics chip. This included a focus on online multiplayer gaming and a hard drive that would come with every system. They also got lucky and acquired a stake in Bungie, which was making a little, unknown game about a space marine fighting aliens. The Xbox team worked hard to get as much third-party support as possible, but publishers like Bethesda would help shape the brand’s identity.
Microsoft launched a massive and expensive marketing campaign. When the system was revealed at CES 2001, they got help from wrestling mega star The Rock. They had campaigns aimed at High School teenagers and young adult men. The Xbox would be the guy of the 2000s’ console. The system was set for launch, but then the tragic events of September 11 happened. At first, delaying the console to 2002 was considered, but ultimately it was only delayed by about a week. When the console launched, Microsoft took over Times Square, and it was the first major public launch in New York City after the attacks, a testament to the power of video games and Microsoft’s entry into the market.
The New Millennium
The new millennium had arrived, proving to be a consequential decade for the industry. Online gaming was about to take off and become an essential part of the market. The Pokémon craze would hit a low point but come back strong. Nintendo would keep releasing iconic classics, but struggle to sell hardware before a new President spearheaded a phenomenon. Sega would exit the hardware market and put Sonic on the Nintendo system. Sony’s second console would make history and destroy the competition, only to prove that hubris does come before the fall. New characters and franchises would come in as the industry would make another significant shift, going from 3D to HD. The new millennium had arrived, and gaming would never be the same again.
SOURCES
Wikipedia (Xbox / Microsoft / GameCube / PS2 / Sega / Dreamcast)
Icons: Xbox - G4TV Episode
Be Nice to All
Very interesting and insiteful post on this dramatic era in video game history. I fondly remember my time with the sega dreamcast and how ahead of it ls time it was.
I also still remember unboxing the OG Xbox and thinking 'what an indestructible beast!!' Fun times - thank you for the reminder!!
This era was so much fun. Each console still had their own unique identity. The games were great. The prices for consoles and games were still (relatively) affordable. And we were all much, much younger, with more energy and more free time on our hands.
Thanks for the post!