Why Did The Neo Geo Fail?

When you plugged a Neo Geo into your TV and saw that “Max 330 Mega Pro-Gear Spec” text on the screen, you knew you were in for something special. This was the early 1990s, and Neo Geo’s closest rivals couldn’t match it in terms of visual detail or audio quality. Plus, it had the most well-made controller of any console, ever.

Despite all this, why did the Neo Geo Fail? For starters, the Neo Geo AES “Gold System” launched at an astronomical price of $649.99 which put it well beyond the budget of most home console gamers. And, it had a rather limited game library with most games being SNK first-party releases that belonged to the fighting or hack ‘n slash genre.

It also didn’t help that SNK didn’t pour much money into aggressive marketing campaigns like Sega or Nintendo. They didn’t even ship more than a few thousand copies of each game to the US, anticipating low sales figures. However, calling the entire Neo Geo project a failure would be disingenuous since the arcade system (MVS) performed very well.

Why Did The Neo Geo Fail?

Let’s get one thing out of the way- the Neo Geo AES (home console) was a commercial failure. However, the hardware it was based on came from the Neo Geo MVS arcade system released in 1990. Which was a massive success, thanks to its forward-looking design choices and processing power that could deliver next-generation graphics.

In fact, the hardware on the Neo Geo was good enough for SNK to keep releasing new games on it until 2004. It was outdated long before that time. But the specific market segment that SNK catered to was more than happy to play 2D fighting games on 14-year-old hardware.

So before calling the Neo Geo a failure, it’s important to understand which system we’re talking about (arcade vs home console). And the type of gamer that SNK wanted to have as a customer. SNK knew they couldn’t compete with Sega or Nintendo in terms of sales volume or game library size.

That’s because Nintendo controlled the vast majority of the home console market in both America and Japan. They established a foothold by releasing the 8-bit NES in 1983. Sega also got into the home console market pretty early with their SG-1000, and later with the much more popular Genesis.

 This meant that SNK was late to the party, which had already transformed into a two-horse race. The market was filled with games from all possible genres, released by both Nintendo and Sega. SNK couldn’t possibly get enough third-party developers within a reasonable amount of time to challenge Sega or Nintendo (looking at a launch window of early 1991).

Plus, a lot of third-party developers wouldn’t be too enthusiastic about making games for a direct rival in the arcades. So, SNK focused on making the kinds of games that their existing fans would love. But with far better graphics and gameplay than the competition, all supported with hardware that handily beat anything else in the home console market.

Why Was The Neo Geo So Expensive?

The Neo Geo AES was literally an arcade motherboard housed inside a sleek home console shell. Plus, it came with arcade-tier controllers. These were big, heavy controllers that you didn’t hold in your hand.

Instead, you placed them down on the floor while gaming and used them like you’d use an arcade controller. They had this amazing joystick that felt similar to a quality flight simulator stick. Plus, each individual button was clicky and responsive with a fast rebound and just enough travel for you to enthusiastically mash it while playing fighting games.

Anti-skid pads, thick cable- the controller alone was worth nearly as much as an entire last-gen console from Nintendo. Then, you had the hardware in the console. Neo Geo was powered by a Motorola 68000 16-bit main processor, with a Zilog Z80 coprocessor to handle audio.

However, this was a chip used by other consoles of the time. For instance, the Sega Genesis was already using a Motorola 68000. And a Zilog Z80 coprocessor.

But the M68000 in the Genesis was clocked at 7.6MHz, or 63% of the 12MHz version in the AES. Plus, it had access to less memory. And graphics on the SNK Neo Geo were handled by three separate chips, compared to the Genesis which had a much simpler GPU.

Because of its impressive hardware, the Neo Geo could handle 380 sprites simultaneously. With a maximum size of 16 x 512 pixels per sprite. And it could display 4096 colors on the screen, from a total palette of over 65000.

Neo Geo cartridges could store up to 330 megabits of data. Combine that with the fast hardware, and you get an idea of why Neo Geo games looked and played so much better. The console was even marketed as the first “24-bit game system”.

Sure, the CPU is 16-bit but the GPU used a 24-bit bus for massive bandwidth gains. Because of the increased VRAM size and data bus width, the Neo Geo doesn’t need to use scrolling tilemap backgrounds. Instead, it creates backgrounds simply by stitching new sprites together onto a fixed layer.

How Much Were Neo Geo Cartridges?

If you thought asking $650 for a game console in the early 1990s was madness, wait till you hear about game prices. You could expect to pay over $200 for a single Neo Geo game. That’s right- over 200 dollars.

In comparison, even the most expensive SNES and Genesis games rarely crossed $100. This was the era of game cartridges, folks. It’s a good thing we moved on to far cheaper CDs.

Game cartridges included ROM chips, along with custom processors for special effects. They also had CMOS batteries to power the volatile memory needed for game saves. Talking of which, the Neo Geo was the first home console to use memory cards for game saves.

You could even remove these memory cards and take them to the arcade, to continue from where you left off at home. Plus, Neo Geo AES controllers could be plugged into Neo Geo MVS arcade cabinets. It was a great little console, and SNK charged a lot for that premium experience.

How Many Neo Geos Were Made?

It’s hard to get a total figure for the entire lifespan (1990 to 2004) of the Neo Geo. But SNK stopped manufacturing the AES console by 1997. According to data from March 1997, the Neo Geo and its CD version had sold 980,000 units combined, around the world.

In comparison, the arcade version (MVS) is reported to have sold 1.18 million units worldwide. This is very impressive for an arcade board, which is limited to a few commercial operators. In comparison, a home console can be bought by any individual household and is far cheaper.

Plus, the Neo Geo MVS arcade game cartridges cost more than their home console counterparts despite using the same board and game code. SNK even used a different pinout on the MVS cartridges to prevent arcade operators from using the cheaper AES cartridges in their machines.

The Neo Geo Pocket

This is a console that is even more obscure than the Neo Geo AES. Very few people bought it, and even fewer remember it today. It is buried under the shadow of its far more critically acclaimed big brother.

However, the Neo Geo Pocket is still a neat little machine. Granted, it only got 10 games before SNK discontinued it and released the Neo Geo Pocket Color. But it had an excellent control layout for playing fighting games, and the Color version had a high-quality (albeit still tiny) library of games.

What Can We Learn From The Neo Geo?

Right from the outset, SNK constrained itself with its performance goals and the market they were targeting. Things got worse when they couldn’t manage to get many third-party developers on board, even five to six years after the release of their console. Nobody wanted to dedicate resources towards the development of high-quality, labor-intensive games for a niche market segment.

SNK tried to rectify the pricing issue midway, by releasing the Neo Geo CD in 1994. The console was cheaper, launching at $399. Its games were also cheaper, thanks to the use of CDs instead of cartridges.

But by then, it was too late. The average gamer knew that they could get a more diverse and larger library of games if they went with a SNES or Genesis. And those were cheaper than even the Neo Geo CD.


The Neo Geo is a tale of mismanaged expectations and failure to predict what direction the gaming market would take. SNK banked on gamers going for a premium experience. And they made a console that brought a true arcade gaming experience to your home.

But that isn’t where gaming was headed. Sure, technological advancements in the interest of better graphics and sound are great. But it is even better when these advancements are available to the general public at a cheap price- just look at the PS1.


As long as I can remember myself I always enjoyed video games. I had amazing moments playing them and that's why I became a game developer, to create amazing experiences for the players. Read More About Me

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