“I think that the entertainment industry itself has a history of chasing success. Any time a hit product comes out, all other companies start chasing after that success and trying to recreate it by putting out similar products.”- Shigeru Miyamoto (E3 2007, Interview w/ Chris Kohler, Wired) This quote is reminiscent of the console wars that occurred during the 1990s, between Sega and Nintendo, both companies were trying to top one another shortly after the gaming market had crashed. Before this in the early 1980s, a massive dilemma arouse with the Atari Video Computer System involving an over saturation of lackluster video games (such as E.T.).
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Atari had previously tried to limit third-party developers for their devices but failed in their lawsuit against a group of former employees that became Activision, by losing this case the concept of third-party development had risen to lead to the Atari Shock, gaming market crash in 1982, in North America.
Nintendo stepped up from the market crash, releasing the Nintendo Entertainment System (NES) in 1985, which is the American counterpart of the Nintendo Family Computer System (Famicom) which released in Japan in 1983. In order to prevent the market from being swamped with low-quality games again, Nintendo implemented their seal of quality which they labeled as “Official Nintendo Seal,” which promised well-developed games from third-party developers. In order for third-party developers to publish games on the NES, licensees were agreed upon which with the strict non-non-compete clause ensured that those specific games remained exclusive to the Nintendo system for two years. By doing this, Nintendo can is accredited with saving the gaming market and bringing about a resurgence in the video gaming industry. Shortly afterward, a company named Sega, which had a rivalry with Nintendo, that stemmed from the 1980s and later continued on into the early 2000s, entered the fray which would lead to the first legitimate console war.
Sega released the Sega Mega Drive in 1989 for Japan, but later rebranded the console as the Sega Genesis as the United States version which its primary purpose was to compete with the Nintendo NES, in order to accomplish this Sega used aggressive marketing campaigns by releasing advertisements such as “Genesis Does What Nintendon’t.” Sega Genesis boasted 16-bits of power compared to Nintendo’s 8-bit NES and had a more extensive library of games available for the console by not limiting third-party developers. To counter the rise of the Sega Genesis, Nintendo released their 16-bit console called the Super Nintendo Entertainment System (SNES) in 1991, which is the successor to the original Nintendo Entertainment System (NES). However, on release, the SNES cost much more, about $199, than the Sega Genesis, which had lowered its price from $189 to about $144 to accommodate against the SNES, and had fewer games compared to Sega. From here onwards, Sega started to lose their advantage over Nintendo, which consisted of their control over more than half of the American video game market.
While Nintendo and Sega continued to butt heads, Sony started to develop their console behind the backs of both gaming companies. Meanwhile, to advance their hardware in 1992 and 1994, Sega came out with the Sega CD and 32x add-ons to compete with Nintendo. The introduction of the 32x add-on supposedly gave the Genesis 32-bit capabilities, but only shortly increased the lifespan of the console. In 1994, the 32-bit war started with the Japanese introduction of the Sony PlayStation, later introduced to America in 1995. Sega combated this with the release of the Sega Saturn for Japan in 1994; however, they released the Sega Saturn in early May 1995 for America giving them a head start over Sony. Later on, Nintendo released their newer console the Nintendo 64, which bypassed the 32-bit and went straight to the 64-bit upgrade. Nintendo and Sega were backed into a corner, after being blindsided by the success of the Sony PlayStation which had adopted the CD method, compared to Nintendo which made the unfortunate decision to stick to cartridge media. By doing so, this hindered Nintendo’s ability to have massive games like Final Fantasy 7 due to space limitations. The architecture of the Sega Saturn, made it difficult for third-party developers to release games for their platform, driving third parties to the Playstation instead. The final nail on the coffin for Sega was the release of their console the Dreamcast.
In 1998, Sega released the Dreamcast in Japan, and the following year in America, game systems were no longer going by bits, as they transition into the 2000s. Dreamcast was both financially and critically acclaimed, however, Sega’s time as a hardware developer came to an end in 2000, when the Sony PlayStation 2 and the Nintendo Gamecube were announced. By this time, Microsoft appeared as a foe once they unveiled their console the Xbox. Sega’s and Nintendo’s long battle had finally come to an end. Nintendo came out victorious only to compete with their new rivals Sony and Microsoft. At the end of the Dreamcast, Sega became a third-party developer to its former adversaries. Sega remains today as one of the most prolific third-party developers in the industry.
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