Sega went out of the console-making business over 2 decades ago, yet so many of their products are remembered fondly by gamers to this day. For a good reason, because Sega was the perfect alternative to a family-friendly Nintendo. It was edgy and cool, hence the slogan “you can’t do this on Nintendo”.
Why doesn’t Sega make consoles anymore? The company suffered from a massive financial crisis during the mid-1990s, caused by poorly planned console releases and dwindling customer interest. It had to underprice cutting-edge products like Dreamcast to stay competitive, which hurt finances even further.
Gamers realized that Sega had lost its focus, releasing one shiny thing after another with zero focus and accountability to their fans. Third-party developers were fed up with jumping between platforms and refused to make games for new Sega consoles (EA is a good example). On top of all this, Sega’s worsening financial condition prevented it from competing with Nintendo’s massive advertising campaigns.
Why Doesn’t Sega Make Consoles Anymore?
Sega stopped making consoles after discontinuing Dreamcast in 2001, a mere 3 years after its release. The company was hemorrhaging money for nearly half a decade, with failures such as Sega CD and Saturn. And gamers weren’t buying the whole “all-new gaming experience” shtick that Sega had repeated several times in a row.
As a result, Nintendo and Sony pulled ahead in hardware sales. Developers found new consoles like Saturn to be very complicated. And the reason for this was Sega’s ambition to be the best, combined with the super-quick turnaround time on their design to manufacturing chain.
Because Sega was falling behind Nintendo, it desperately released one new product after another. Engineers weren’t given enough time to design and test systems, and that’s how you end up with monstrosities like Saturn. It had 2 CPUs, 2 GPUs, a coprocessor for handling system communications, and custom sound processing units.
The complexity of Saturn made it unviable for several smaller 3rd party developers who just made games for Nintendo 64 and PS1 instead. They didn’t want to deal with the dual CPU and dual GPU setup. Originally, Saturn was supposed to have one GPU but Sega’s management decided to throw in a 2nd one as a last-minute response to Sony’s PS1.
Sega launched Saturn at $399, only for Sony to one-up them by announcing a $299 price tag for PlayStation. Despite its higher price, Saturn’s complexity meant that Sega’s profit margins were very low. And it failed to release enough high-quality exclusives, which made it a sales failure.
By the time Dreamcast launched, Sega was in a distant 3rd place behind Sony and Nintendo. They didn’t have the marketing budget, nor did they have the trust of gamers after releasing 3 to 4 disastrous products. While Dreamcast was revolutionary and sold over a million units in the first 2 weeks of its American launch, it failed to retain sales momentum in the long term.
Will Sega Return To Making Consoles?
It’s extremely unlikely that Sega will ever make a brand-new console that competes against established players like Microsoft, Nintendo, and Sony. Right now, they are focused on remaking retro consoles such as Genesis. Both Genesis Mini and Genesis Mini 2 have sold pretty well within the niche retro enthusiast market.
Even though Sega isn’t involved with the internal hardware design (Genesis Mini uses a ZUIKI Z7213 SoC) of these retro console remakes, they do the external design. Technically, Genesis Mini and Genesis Mini 2 are “new” Sega consoles because they are first-party products. Sega handles the production and software by itself.
Does Sega Make Games Anymore?
They do, and although their game releases aren’t yearly like Activision or EA, these are high-quality products loved by fans. Right now, the most popular Sega games are the Yakuza and Judgement series. Sega also makes the Valkyria Chronicles games along with a bunch of arcade games.
You can view a list of upcoming Sega games here. The company is very active in the realm of video game development and publishing. And it’s only gaining momentum with the success of flagship titles such as Yakuza.
Sega’s Most Popular Console
Genesis is the most popular Sega console of all time, with 30.75 million units sold. It could have been even higher had Sega not diverted its resources to Saturn which turned out to be a financial flop. Genesis vs SNES was the original console war, well before PlayStation vs Xbox.
Retro Console Remakes
Sega has quietly been churning out remakes of their old Genesis console, calling it the Genesis Mini. You don’t see too many headlines about the Genesis Mini on games journalism sites or Youtube, but it’s very popular among old-school Sega fans and retro enthusiasts. Genesis Mini is like Sony’s PlayStation Classic, only several times better because Sega cares about delivering a good product.
After the original production run of the Genesis Mini sold out in 2019, Sega created Genesis Mini 2. It is even better than its predecessor, with a bigger and better game collection. Genesis Mini 2 also features a 6-button controller, compared to the Genesis Mini which has a 3-button controller.
The Future Of Sega
For the foreseeable future, Sega will remain a game developer and publisher. They have been making a good bit of money, and people love their recent releases such as Yakuza 7, Bayonetta, Sonic Frontiers, etc. It makes no sense for Sega to restructure and invest billions of dollars into creating a console division when Nintendo, Sony, and Microsoft have already established market dominance.
I hope this article helped you understand why Sega stopped making consoles. Dreamcast was a swansong for the company’s hardware division, and its potential was never truly realized. However, games like Shenmue set the benchmark for what a true open-world interactive sim should be.
And thanks to Shenmue, we now have games like Yakuza which make tons of money for the new Sega. Even though Sega is a 3rd party game developer, it hasn’t lost its sense of identity. You can easily tell a modern Sega game apart from the competition (look at Yakuza).