SegaBase Volume 3 - Mega Drive / Genesis

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Other SegaBase articles: Older Systems | Master System and Game Gear | Mega Drive/Genesis | Mega CD/Sega CD | 32X | Saturn | Dreamcast

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Table of contents of this page

• SegaBase Volume 3 - Mega Drive / Genesis
  • Page 1
• Genesis: A New Beginning
  • The 16-bit revolution
  • Sega MK-1601 (aka "Sega Genesis" or "Sega Mega Drive")
  • The initial campaign
  • Hyakumandai!

go to: Page 1 | Page 2 | Page 3

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Genesis: A New Beginning

The 16-bit revolution

The year 1987 found Sega in a most curious position. On the one hand, it had utterly failed to shake Nintendo's grip on the videogame industry with its 8-bit Sega Master System (SMS). On the other hand, that same industry's base technology was fast becoming obsolete. New and more powerful personal computer systems, predominantly of the 16-bit variety, had made and were continuing to make significant inroads into the market. New and revolutionary systems such as the Commodore Amiga andAtari ST were causing home consumers to re-evaluate how videogames should look and play. This new generation of personal computers were finally powerful enough to deliver a videogame experience every bit as good as that found in the arcades of the day. Why not the same for home videogame consoles?

The answer was simple. The home console market was still trapped inside its 8-bit prison, with a certain Italian plumber of Japanese extraction as its erstwhile jailer. Nintendo had a virtual iron grip on the industry and was not about to let go for any reason. It held a 95% share of the Japanese market and a 92% share of the U.S. market, and those two illegal monopolies gave Nintendo all the profits it could ever want and more. Other vendors in the field didn't stand a chance on the fertile ground that Nintendo had exploited for years. Even Sega, which arguably had the superior 8-bit console with the SMS, fared no better against Nintendo's venerable NES than had its predecessors. Sega was not going to get anywhere playing by Nintendo's rules on Nintendo's turf. The answer was to join the fight on a new battlefield, with new rules and standards of play, in a venue over which Nintendo had no control. That venue was the nextgen wave of its day - the arrival of the 16-bit generation of home consoles.

By this time Sega had already enjoyed considerable success in the arcades with 16-bit hardware. Sega games such as Afterburner 2, OutRun?, Shinobi, Space Harrier, and Super HangOn had become extremely popular with gamers. Sega had a reputation for producing arcade games like nobody else on the scene, due largely to its use of the high-end 16-bit Motorola MC68000 central processing unit (CPU) - or in some cases twin Motorola CPUs - in conjuction with the best 16-bit video display processors (VDPs) and sound systems that the company could devise. The major iteration of this design scheme at the time was called System 16, and many a Sega game based directly on or derived from it could be found with a crowd of eager gamers clustered around in most arcades. The considerable success of System 16 in the arcades coupled with its console woes on the home market caused Sega CEO Hayao Nakayama to start thinking. The time seemed ripe, he reasoned, to literally "bring the arcades home." If Sega could come up with an all-new console, one that was radically different from Nintendo's, one that would appeal to an all-new user base, then Sega might find the niche market upon which it could build. Producing a 16-bit videogame console, as opposed to yet another system based on tried-and-true 8-bit technology, would put Sega on a technological cutting edge that no competitor could match for some time. This would be the new system's main selling point. By the time the competition - meaning Nintendo, of course - did catch up, Sega's box would already be the established leader with a healthy software base and the tables would be turned. For once, the plumber would be the one trying to catch up. Furthermore, the time was now to bring this new system to market. The new customer base was already there, and Sega did not want Nintendo to snag them first.

It was a good thing for Sega that they chose to act when they did. Nintendo already its own 16-bit console in the design pipeline. This was the system that would later become known as the Super Famicom in Japan and the Super NES (SNES) in the rest of the world. Nintendo CEO Hiroshi Yamauchi had warned his company that they needed to be poised to seize the 16-bit console market by 1990; however, his statement did not have the binding edge of command that his pronouncements usually carried. Nintendo was still reaping huge profits from the NES, so there was no hurry to come up with a successor system. There was also another reason for the delay - Nintendo was having development problems with this newest box. It was little more than a design concept and a few barely working prototypes at this point, but already certain issues had surfaced that demanded attention. The system as originally designed was way too expensive to be produced in a version affordable for the average consumer, let alone cost-effective for Nintendo. On top of that, project leader Masayuki Uemura was unable to meet Yamauchi's demand that the new box be back-compatible with the NES. The back-compatability feature was eventually abandoned; however, that only saved about US$75 on the anticipated end-user price tag. The chief culprit of the cost was, of course, the all-new graphics and sound processing suite upon which Yamauchi insisted. Designed in anticipation of the coming multimedia boom, it drove up the cost of the system so much that Nintendo was again forced to cut costs elsewhere or scrap it and risk being left behind. The problem was eventually solved by installing a slower CPU - a Motorola-based WDC65816 CPU - instead of the faster 10 Mhz MC68000 that Uemura originally intended. This meant that the new box would not be that much faster than the NES itself, so a math coprocessor (as cheap as Nintendo could cobble together) was thrown in to ease the processing strain a bit.

Meanwhile, over in Sega R&D, a team of engineers under the direction of Hideki Sato proceeded at a rapid pace on development of Sega's new 16-bitter. This new system was little more than a redesigned System 16 arcade board that had been scaled down and shoehorned inside a sleek-looking black case. An RF adapter and SMS-style audiovisual port replaced the custom monitor connections for an arcade cabinet, and a cartridge slot for interchangeable games replaced the on-board EPROMs. In fact, the resulting design worked so well that Sega would turn right around and use it as the basis for three more arcade boards (MegaTech, MegaPlay, and System C). The similarity between existing arcade hardware and Sega's new 16-bit home console meant that it would not be terribly difficult to convert existing System 16 games for the new console. The resultant ports would be almost letter-perfect versions of the arcade originals, allowing Sega to build up a large library of games fairly quickly until its console programmers had found time to develop all-new titles specifically for the new system. Of course, all of those games - both old and new - would be running on 16-bit hardware as opposed to 8-bit, so gamers would be able to tell the difference between Sega's and Nintendo's consoles right away. There was also another advantage to Sega's new system that was exploited right away. Sega typically built its arcade games using a layered approach - adding a layer or two of new technology to older designs for the interim until the new stuff proved itself, then designing a successor system using the new technology throughout. This was the case with System 16, as it still retained vestiges of its 8-bit ancestor boards. The components in question were practically identical to those found the existing 8-bit SMS console save in layout and the absence of the SMS boot ROM. In finalizing the design for its new 16-bit console, Sega R&D made sure that the system had a mode that would make it back-compatible with existing 8-bit SMS games. The only thing lacking would be the SMS boot ROM and the appropriate adapter for the cartridge port, so an external accessory was designed just for this purpose. This automatically added the entire 8-bit SMS library to that of the new console, comprising some 80 games or so as far as the U.S. was concerned and a somewhat greater number of releases in Japan and Europe. The back-compatibility feature made another good selling point - Sega gamers could play their old 8-bit favorites on the new system while saving up money to buy new and better 16-bit games. As with Sega's earlier home consoles, a number of peripherals were planned for use with the new system. The half-moon shaped controllers that are taken for granted nowadays were the first to be done. Next came the SMS cartridge adapter, which by now had gained the unwieldy but workable title of Power Base Converter. Third was the Mega Modem (aka Telegames Modem), designed expressly for a series of modem-playable games that Sega planned to market in Japan in cooperation with Sunsoft. Three other accessories were also planned at this point - a keyboard, disc drive, and SG-1000 style drawing tablet . Their eventual market materialization depended largely on how well the Mega Modem sold. If it failed, then there was no point in wasting money on the additional peripherals. Besides, Nintendo was already experimenting with modem-based technology for the NES, so it seemed a logical choice.

The last issue to solve was giving the new system a name. The official in-house designation of MK-1601 was not about to sell anything. After a great deal of debate, Sega's Japanese executives finally settled on MegaDrive. It would be one that their small but loyal customer base would understand. Most Japanese have a basic training in the English language, and English loanwords are quite common and frequently used in the various multimedia industries for the purpose of emphasis. The English loanword mega was already in use as part of Sega's SMS advertising campaign to promote games that were supposed to be more powerful than their ancestors. Tack on another English loanward, drive, and the resultant name conjured up a mental image of some massively powerful engine churning away. Unfortunately, Sega of America would not be permitted to use the name in its respective market. Another American firm had already registered the term megadrive as a trademark, so Sega's new console was to be renamed Genesis for its U.S. launch. It was a fortuitous choice in retrospect. The name's Biblical connotations would not be lost on conservative-minded American parents, many of whose kids would want to buy the new system. There was also a hidden meaning within the console's new name. Genesis in Hebrew means "in the beginning," and that is exactly what Sega was doing - beginning the nextgen wave of consoles with a Sega system. Up to this point Sega had been playing catch-up to Nintendo. Now it would be leading the way. Here are the final specifications for Sega's new 16-bit home console as they stood prior to the official system launch. It is not surprising that they are almost identical to a stock Sega System 16 arcade board save for the obvious cabinet issues.

Sega MK-1601 (aka "Sega Genesis" or "Sega Mega Drive")

Component	Description
Processors	* Motorola MC68000 CPU running at 7.61 MHz (main system functions) (1) * Zilog Z80 CPU running at 3.51 MHz (sound suite control)
Graphics	* 16-bit VDP for playfield and sprite control * 3 graphics planes, 1 sprite plane, and 2 scrolling playfields. * 64K VRAM- 64x9kbit CRAM (dedicated color RAM) * 64 simultaneous colors on-screen from a 512-color palette * 320x224 native graphics display mode * 40x28 text display mode
Sound	* 8 KB sound RAM * Texas Instruments TI-76489 PSG (programmable sound generator) * Yamaha YM-2612 FM synthesizer (2) * 14db signal-to-noise ratio
Memory	* 1 MB system ROM * 64 K system RAM
Connection	* 1 sidecar expansion slot * 1 cartridge port * 2 joystick ports * Commodore-style A/V port * internal RF adapter
Storage	* videogame cartridges (3)
Other	* back-compatible with all Sega Master System (SMS) games through use of the Power Base Converter accessory

In short, Sega planned to deliver nothing less than a full-fledged arcade-quality gaming console to the homes of average consumers. It was a bold move for a bold company and would cost a lot of money up front, but Hayao Nakayama was confident that the new system would succeed in creating its own market. After all, given Nintendo's continuing dominance of the old market, Sega had nothing to lose.

The only real wild card in the deck at this point was NEC. The Japanese computer giant, sensing potential profits in a new field, had decided to join the resurgent videogame market. Not only did this prospect disturb Sega, but it also worried Nintendo as well. NEC had everything going for it - plants, resources, personnel, and a hefty bank account that dwarfed anything that even mighty Nintendo could muster. Nintendo's total net profits were roughly about the same as what NEC budgeted its R&D division ... all by itself. They had the best hardware they could make or money could buy, they could afford the best developers in the business, and work was already underway on a home console that they called the PC Engine (PCE). Not a lot was known about NEC's new box, but one thing was certain - it would be one of the best-designed consoles to ever hit the market. As long as it had the games to match, it might prove a worthy competitor to Nintendo and derail Sega's carefully laid plans. The threat of the PC Engine was an ever-present shadow over Sega as they labored long hours across many nights in order to bring their newest home console to market. It is now the third quarter of 1988 - that part of the year in which new products are generally released to the public. The first of the great console wars is about to commence.

The initial campaign

There are those who would say that the first of the console wars took place from 1982 to 1983 among Atari, Mattel, and Coleco. Be that as it may, any real battle among them was prematurely terminated when the bottom fell out of the U.S. videogame market at the end of 1983. What most videogame historians define as the first of the great console wars did not come about until almost a decade later, by which time the playing field had been cleared of its American pioneers and a new breed of Japanese contenders had entered the fray. Say what you will about the early days of console videogames, but it was not until Sega decided to challenge Nintendo's illegal videogame market monopoly with the Genesis that the real fighting began. There had never been a battle for dominance like this in the entire history of the videogame industry up to this time, and the titanic struggle between Nintendo and Sega for control of the U.S. market would set the stage for all others that followed. The Japanese and European markets were mere side players in the ensuing fracas. They simply could not generate the large revenues that could be reaped from millions of cash-toting, materialistic American buyers. The videogame industry's lesser two main markets will receive mention from time to time, but it was in the U.S. starting in 1989 where the first great console war began to unfold before everybody's eyes.

The staging area for the first great console war (and subsequent ones) was the island nation of Japan. It was home to all three of the major players in the fight - Nintendo, the veritable 900-pound gorilla of the industry and longtime dominator; Sega, the presumptive rival with a reputation for talent (and a hidden ace up its sleeve); and newcomer NEC, the resource-rich dark horse who was fully capable of outspending both. In the words of a common American cliché, it promised to be "a real knock-down, drag-out fight."

NEC got the jump on everybody by releasing the PC Engine on 30 October 1987, approximately one full year before the Sega MegaDrive? would enter the fray. It was an impressive bit of hardware - for an 8-bit system, that is. In truth, the PC Engine was actually driven by an 8-bit CPU, same as the NES, but NEC had used its technical prowess to develop a console with enough graphical processing oomph that it could make a justifiable claim to belong in the 16-bit generation. The resultant games looked and sounded better than anything Nintendo had done or was going to do for the NES ... and therein lay the problem. They didn't play any better than NES games; in fact, many of the early PCE games played decidedly worse. There were two reasons for NEC's tragic blunder in this regard. First, Nintendo had the best among the third-party software community in Japan eating out of the palm of its hand with its restrictive yet lucrative development contracts. Second, NEC's own stable of programmers were not yet up to speed on the full capabilities of their own system. It was an awesome box for its day and many great games would eventually be written for it a few years later, yet by that time NEC would no longer be a contender. However, we digress. We are getting a bit ahead of ourselves. First-year PC Engine sales were decent, but did not so much as put a dent in Nintendo's market share. What would prove to be the true contender in the first great console war joined the fight on 29 October 1988. On that day, Sega launched its 16-bit MegaDrive? home videogame console in Japan. The initial asking price was ¥21000, and the first two games available for the system were Space Harrier 2 and Super Thunder Blade. Both were ports of the Sega arcade games of the same name. The new console was respectfully acknowledged, and then everybody went right back to buying and playing Nintendo's products. Nevertheless, Sega went ahead with its schedule of planned direct arcade ports and detailed some of its in-house programming teams to develop new games for its system. It was early, and Japan would the hardest market in which the new box would seek a foothold. It was going to take time.

Sega got its first big break the following year when Namco, the number one third-party developer in Japan and creator of the classic arcade game Pac-Man, abruptly joined the MegaDrive? fold. Up to that time, Namco was one of the few companies to enjoy a sweetheart deal with Nintendo, made during the early days of the Famicom (NES) when Nintendo was trying to sign anybody and everybody they could to code for the new system. Namco's lucrative contract ended in 1989, at which time Nintendo's Yamauchi bluntly informed Namco representatives that they would have to sign the same standard development contract as everybody else. This would cut Namco's profit margins and severely restrict the number of Famicom titles it could develop, as well as making said titles exclusive to the Famicom. In other words, no more side benefits. Namco CEO Masaya Nakamura is said to have exploded into a fit of rage when given the bad news, and he promptly decided to do what no other Nintendo licensee in Japan had yet dared. In a carefully worded interview with Japan's top-selling newspaper, the Nihon Keizai Shinbun, Nakamura accused Nintendo of holding an illegal monopoly on the Japanese videogame market, quick to silence any company that dared question its judgement. To question Nintendo would be the same as committing virtual suicide, claimed Nakamura - and some in the industry wondered if Namco was about to do just that. The resulting war of words was quite predictable. Yamauchi promptly gave his own interview, in which he publically chided Namco for not being gracious about the profits it had earned as the Famicom's very first licensee. As a result, Namco's "privileges" would be withheld in any future contract. Namco quickly responded that they would support the console market's newcomer, the Sega MegaDrive?, instead of Nintendo's aging warhorse. Nintendo said that Namco's threat was hollow and again accused it of welshing on its exclusive privileges. Namco then responded with a federal lawsuit filed with the Kyoto District Judiciary, charging Nintendo with anti-competitive behavior and monopolistic practices. Yamauchi laughed it off. "Frankly, Namco is envious of us," he said in a published interview with Zakai magazine. "If they are not satisfied with Nintendo and the way we do business, they should create their own market. That is the advantage of the free market." The comment was not entirely truthful - the market was not free no matter what Yamauchi claimed - and Namco was force to face that sad reality soon enough.

It did not take long for Namco to go crawling back to Nintendo. They had a half-dozen or so arcade ports already under development for the MegaDrive? (Phelios, Klax, Burning Force, Megapanel, and Dangerous Seed), but none of them would be ready for market until the middle of 1990. In the meantime, Namco's bottom line took a royal pounding from the loss of its Nintendo license. Several months after the fireworks had first commenced, Namco quietly withdrew its lawsuit against Nintendo. Masaya Nakamura sullenly instructed his staff to make arrangements to secure a standard Nintendo development contract. There would be no argument - he had Namco's latest financial returns before him in all their dismal splendor. Namco's new contract would include Nintendo's standard restriction clauses, severely limiting Namco's ability to develop for the Sega MegaDrive? and other competing platforms. The behemoth of the industry had flexed its muscles. Even so venerated an outfit as Namco, one of the founders of the arcade videogame industry, had been forced to toe the Nintendo company line. Nakamura would never forgive his humiliation at the hands of Yamauchi, nor did the latter particularly care how Namco perceived his company's behavior. The affair would come back to haunt Nintendo in later years, however. As soon as it was able, Namco dropped out of the Nintendo fold and openly developed software for the systems of its competitors. It is a grudge that has separated the two companies to this day, and it is a rare and notable event whenever a Namco title makes an appearance on a Nintendo console. Over at Sega, Hayao Nakayama got the message loud and clear. Despite fielding a superior console for the second time in a row, Nintendo was not about to let Sega make any serious inroads into its home turf. Sega would have to take its new console abroad if it had any chance of surviving and growing. That is exactly what Sega did.

Hyakumandai!

Once again, NEC tried to get the jump on Sega. Having met with unimpressive results in Japan, NEC executives felt that the system might stand a better chance in North America. Rechristened the Turbo GraphX 16 (TG16), NEC's powerful 8-bitter hit U.S. store shelves approximately six months prior to the scheduled launch date of the Genesis. Unfortunately for NEC, its initial U.S. lineup was even less impressive than it had been for the system back in Japan. The best title it could field for the TG16 launch was the rather bland side-scroller Keith Courage in Alpha Zones. Being a neophyte on the console market, NEC had yet to grasp a lesson that Nintendo had learned early - good software drives console sales. Nintendo is reported to have been delighted with the subsequently poor market performance of the TG16 during its early troubled years. It really didn't have to do anything about combating the NEC threat - the befuddled computer giant was doing their job for them. In time, the TG16/PCE would see some excellent titles that truly showcased the system's power, but by then it was too late - it had been effectively eliminated from the console wars. It would survive as the most notable of the lesser niche systems, acquiring a small yet doggedly loyal following in all markets, and over the years would gradually gain the reputation of being the system that should have won the first great console war. It did not, because thanks to NEC's initial fumbling of its software library, it never had the chance. In the meantime, Sega of America remained unruffled by NEC's early launch of the TG16. Their response was to issue an official press release describing the impending arrival of the 16-bit Genesis to North America. Here is how that document opened:

The rest of the press release went on to describe the features of the new system, stressed Sega's experience in creating top-notch arcade games and how that resulted in the Genesis, gave an initial release date (09/01/1989), and some initial pricing information ("under $200" for a complete system). Other idata was made available in subsequent announcements. There were about a dozen titles scheduled for release at launchtime, most of them being ports of popular Sega arcade games that were already on the MegaDrive? market in Japan. Sega's own Altered Beast, the third game released for the system, was to be a pack-in title with every console sold. Michael Katz, the man hired by none other than company founder David Rosen as the new president of Sega of America, was taking no chances on the system launch and was putting all of his ducks in a row. He was still betting that the Genesis and not the TG16 would be the only worthy competitor that could take on mighty Nintendo.

The Sega Genesis saw its official U.S. launch on 14 August 1989 in two cities, Los Angeles and New York. The rest of the country got the system on 15 September 1989, along with a launch lineup of six games. The15 September 1989 date is generally regarded as the official launch date of the Genesis due to the limited nature of the earlier event. The original retail price for a complete system was US$190, some US$10 less than had been originally planned. Altered Beast was the system pack-in game, as promised, but new Genesis gamers could also purchase Last Battle, Space Harrier 2, Super Thunder Blade, Thunder Force, and Tommy Lasorda Baseball. The advertising tag line for the new system was coined by Sega of America CEO Michael Katz: "Sega Genesis does what Nintendon't." Right away, U.S. gamers could tell that the Genesis was quite a different animal than the aging NES. It was blazingly fast. It had eye-popping graphics. It had stereo sound. It had accurate ports of some of the best-known arcade games of its day. There were other, less obvious features that they noticed as well. It was black, and black was cool. It had a straightforward top-down cartridge port design - no damn door and spring-mounted loading bay like a certain other console. This meant that the Genesis Game Genie, once it arrived (and everybody knew it was coming) would not be the convoluted affair that Nintendo had forced for its NES after much legal wrangling. Intial launch sales of the Genesis were respectable enough, although they were not about to break Nintendo's 92% market share, but more importantly a lot of gamers and game magazines began talking about Sega's newcomer. To them, the Genesis was a speedy black Porsche in comparison to Nintendo's lumbering two-tone Volkswagen. Now, if it could only get some really great games to go with it - can you imagine that?! Europe would not get Sega's 16-bitter until November of 1990. The island nation of Great Britian, Sega's predominant European stronghold ever since the early days of the SMS, was the first to receive its MegaDrives?. Originally retailing for £190 per system, the initial shipment of some 30,000 consoles first went on sale in such major British department stores as Dixon's and Rumbelow's. Its arrival in the Old World was welcome news to gamers across the continent, who had long enjoyed the fruit from the Sega vine. It was not good news for Nintendo, whose still-struggling European division was then in the process of opening a major distribution center in Grossheim, Germany. Nintendo may have dominated the Japanese and U.S. videogame markets, but it was Sega who ruled the roost in Europe. Nintendo's measly 10% market market share stood in stark contrast to its utter dominance outside of Europe, and that inescapable fact pretty much dictated its European strategy. They let Sega of Europe's new MegaDrive? go largely unchallenged while they worked on increasing their market share to a modest 25% and concentrated on more profitable products, such as their GameBoy handheld system. Thus it was that the Sega MegaDrive? took Europe by storm and would remain the dominant home videogame console until the mid-1990s. In fact, it would outsell all other Sega systems, even the 32-bit Saturn, until it was officialy discontinued by Sega of Europe in 1998. Nintendo of Europe had no choice but to let it happen. It simply did not have the resources and market share to compete.

Let us take a moment to focus on a common observation made by most gamers about the Genesis in those early days. The biggest complaint by far was about the games. It wasn't that they lacked in ear and eye candy - that much was obvious. What they lacked was good gameplay. Sega knew full well that good games would push system sales, so they had made sure that top-notch ports of many of their hit arcade titles were available as soon as the system was launched. Unfortunately for Sega, what worked well as an arcade game did not necessarily work well as a home console game. Players did not have to worry anymore about having a pocketful of quarters to learn how to beat the bad guys and move on to the next level. They could take as much time as they wanted, and many of them did. Soon, complaints such as "short," "shallow," and "repetitive" became all too common on the Genesis scene. The expected success of Sega's near-perfect arcade ports never materialized. For example, the pack-in arcade conversion of Altered Beast was soundly criticized by all hands as being far too short for a home console game. Michael Jackson's Moonwalker, a game upon which Sega had reportedly spent millions in securing the rights, was derided for endlessly repetitive gameplay. A common theme was beginning to emerge regarding Sega's first-generation Genesis games - great-looking but no gameplay. Even Sega's early dedicated Genesis efforts suffered from this affliction. Castle of Illusion and Fantasia, both Mickey Mouse games produced under license from Disney, set new standards for sprite animation in a videogame yet played little better than their ported arcade predecessors. Sega's games may have looked better than Nintendo's, but they didn't seem to play any better. It was evident that better-playing games would have to be produced before the Genesis suffered the same fate as NEC's new system. Genesis as yet had no "killer app" to push console sales, becasue Sega did have its own Shigeru Miyamoto (Super Mario Brothers) or Alexey Pajitnov (Tetris) as did Nintendo. Actually it did, as we shall soon see, but it had yet to appreciate this fact.

In the meantime, an American cavalry rode to Sega's rescue in the form of noted software powerhouse Electronic Arts (EA) The company was already a legend in its own time: it was well known in the personal computer industry for such groundbreaking fare as M.U.L.E. and Seven Cities of Gold, and now it wanted a share of the highly profitable console market. EA had originally passed on an NES license during that system's early days in 1984, when it could have gotten one on favorable terms, and was a mistake that the company had rued ever since. Now, EA president Trip Hawkins was eyeing the emergence of the 16-bit consoles and came to the conclusion that the Sega Genesis would be the next big system. His R&D teams had already examined the hardware and come up with good proposals for porting and developing EA games on Sega's new system. In early 1990, Hawkins directed his staff to enter into formal negotiations for a licensing deal with Sega on terms favorable to EA. The gist of it was that EA would get to make as many games as it wanted - something Nintendo had not offered them - and a reduction in licensing fees. Sega said no. It planned to impose a restrictive contract on EA just as it had done its other licensees, one that echoed similar Nintendo arrangements. Hawkins had anticipated this, however, and pulled a one-two sucker punch on Sega. Acting on his direction, EA's negotiators brusquely informed Sega of America that it didn't have that kind of clout to throw around; furthermore, EA had already reverse engineered the console and knew how to manufacture its own unlicensed Sega cartridges. It was at this point that Sega caved - after all, EA was right about Sega's market presence and both wanted to advance Genesis sales. The two eventually settled on a licensing agreement that, while it was not everything Hawkins has originally wanted, came close enough for his purposes. In exchange, Sega got one of the best third-party software houses in America on its side and their best programming teams to boot. EA games began to appear for the Genesis as fast as the company could churn them out, and this sudden influx of new and more sophisticated titles helped push console sales. Three of these early hits were Will Harvey's The Immortal (an isometric-view RPG), Budokan: The Martial Spirit(a fighting game), and the first installment in the now-legendary John Madden Football (aka Madden NFL) franchise. Madden competed directly with Sega's own Joe Montana Football, and a friendly rivalry grew between the two company's sports game divisions that would eventually result in some of the best 16-bit sports videogames ever created.

By now, it had become evident who was going to make up the nextgen console market - the niche in which Sega was struggling to establish its beachhead. These were the older kids, mostly teenage boys, that had comprised the original Nintendo masses of the mid-1980s. In the case of certain sages among them, they were the the forgotten gamers of the Atari generation almost a decade before. You must remember that this generation had grown up on a steady diet of computers and videogame systems, and was the first such one in America to do so. Their tastes in videogames had grown more sophistcated as they aged, and they had for the most part moved beyond the simple and safe family-oriented fare that Nintendo was still force-feeding upon them. They envisioned themselves as anti-establishment, living on the edge (as a popular Aerosmith music video put it), and desirous of the most that they could get out of whatever experience they had. They were already attracted to the looks and power of the Genesis, and the arrival of EA on the console along with its reputation for excellence impressed them. In their minds, if you wanted to play baby games, you played Nintendo. If you wanted a real game, especially a real sports game, you played Sega. Their respect for Sega's new system got a big boost with the arrival of Capcom's Strider later that year. A perfect port of an arcade game that had largely been ignored when it first arrived in the U.S., it was the title that finally offered these gamers something of the mind-torturing, thumb-callusing, hell-on-wheels lengthy quality gameplay that they so desired from the new box. Strider would win Capcom the prestigous Console Game of the Year Award for 1990, but more importantly, it helped build Sega's reputation with its growing fans. It also marked the beginning of a long-standing relationship between Capcom and Sega that has continued over the years to the present day. Genesis was beginning to become the embodiment of all that was cool in a videogame console. The only thing still lacking was a killer app to put the final seal on that oft-whispered opinion.

By the summer of 1990, sales of the Sega Genesis had surpassed the 1 million mark in the North American marketplace. This figure had been Nakayama's original first-year sales target for the console, and he had even gone so far as to have Sega employees chant "Hyakumandai!" (Japanese for one million) at the end of each day's morning briefing sessions. By the end of the year, Sega's new console had raked in over US$100 million in sales. It was a modest profit, to be sure, but it was a definite profit. It was not enough to satisfy Nakayama, however, who was still irked by the fact that Nintendo had stubbornly clung to its 92% market share despite Sega's best efforts. He therefore sacked Katz in January of 1991 and replaced him with longtime friend Tom Kalinske. Despite this, latter-day videogame historians credit Katz with the successful launch of the Genesis in the U.S. market. It was upon the solid foundation that Katz built during his turn at the helm from which all else sprang forth. 1 million Genesis consoles sounds like an impressive number today, until you do a little digging and discover that Nintendo had an installed user base of 31.7 million NES consoles. Thirty-to-one against - those were odds that no Las Vegas bookie in his right mind would take. It was a good thing that this was not Vegas, because Hayao Nakayama probably would not have listened anyway. He was used to getting his way, and he wasn't going to let a trivial thing like long odds stop him. Besides, he had more immediate concerns. Nintendo was beginning to stir.

The sleeping giant had at last awakened to the fact that its next intended market was being stolen right out from under its very nose by an upstart - one that it thought it had buried back in Japan years before. With this shocking realization in mind, Nintendo promptly swung into action. Work on the company's nextgen console was wrapped up and the system was hurriedly rushed to market. Shigeru Miyamoto and his team of developers hurredly put together a new Mariogame for it. Nintendo of Japan officially announced the Super Famicom in October of 1990; by early November pre-orders had reached 1.5 million units and the company was forced to stop taking them. All night long on 20 November 1990, a large assortment of panel trucks drove up to the main Nintendo warehouse in Kyoto, were quickly filled with cases of boxed consoles and cartridges, then departed to select retail locations all across Japan in an event known as "Operation Midnight Shipping." It was a mess - there were simply not enough consoles to meet customer demand despite Nintendo's best production efforts. Over 300,000 Super Famicoms were sold the next day, along with copies of the system's two launch titles (Super Mario World and F-Zero), but Nintendo could have sold considerably more had it not been caught napping. Things had settled out by year's end, though. By the first quarter of 1991, Nintendo had sold some 2 million Super Famicoms in Japan, and knew beyond a shadow of a doubt that the system would be as big a success as had been the NES.

With the Japanese launch of the Super Famicom now under its belt, Nintendo made ready to launch the SNES (the export version of the Super Famicom, remember) in the U.S. market on 9 September 1991. The company had every reason to believe that the U.S. launch would be even more successful than the Japanese launch. Besides, its American division would have a full year to iron out the kinks and ramp up the system with the usual full-court press advertising campaign. It even had a tag line for the new system, throwing Sega's own right back into its face - "Nintendo is what Genesis isn't." Nintendo was now poised to do something that no other player in the videogame industry had yet pulled off - dominate the market two generations in a row with two successive systems. It was guaranteed to succeed, because Nintendo still owned the U.S. market lock, stock, and barrel. Nothing would stand in its way. Nothing could go wrong. Nakayama was not about to let Sega get caught again under Nintendo's thumb. He planned to unravel his rival's stranglehold on the U.S. videogame market long before the SNES arrived. When that time finally came, Sega would break Nintendo's monopoly with a market-shattering sonic boom that would be heard around the world and still echoes to this very day.

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