History of the Sega Genesis – Dawn of the 16-bit Era

As the book of retro tells us, in the late 1980s a big bang occurred that wrought the dawn of a new age in home video games. An event of such biblical proportions that thrust gaming from its 8-bit confined and into a righteous path that would evolve into the video games of today. A console created from the rib (or at least tech) of its predecessor. SEGA Genesis, dawn of the 16-bit era.

Basic Facts:

  • Name: Sega Genesis (North America), Sega Mega Drive (Japan, Europe, Brazil)

Before the Beginning:

With the 8-bit Nintendo Entertainment System dominating the video game market from 1984 to 1989, fellow coin-op arcade manufacturer Sega threw their hat into the home console biz with the Sega Master System.

Designed to go head-to-head against the NES, the Master System released sever years after the NES, and while it was a bit more advance that the competition, it never really caught on in North America. While the Master System was a major hit in Europe and became the dominant system in Brazil, in the US and Canada it was always considered to be the poor-man’s NES, with no "killer app" Master System owners envied their friends who were all playing Super Mario Bros. 3 on their Nintendo systems.

After years of battling for a piece of the market, Sega devised a new strategy.

Instead of piggybacking off of the current market of 8-bit gaming, they would be the first true 16-bit console to market with a system that was not only superior but to expand its power with the use of a series of peripherals.

From Mega Drive Comes the Genesis:

The name of the system was dubbed the Sega Mega Drive, however in the United States the rights to the name Mega Drive were already owned by another company, so after a trademark dispute Sega opted to use a different name for the system in North America.

The Mega Drive became known as the Sega Genesis in the U.S. and Canada, making it the first console named after a book of the bible, indicating that it was brining forth a new age in video games, and it did indeed.

The Coming of the Genesis

The Sega Genesis is the very first 16-bit console system. While the TurboGrafx-16 predated the Genesis/Mega Drive release, it’s not truly a 16-bit system; the graphics card itself was 16-bit, but the CPU was still 8-bit. Also, while the TGX16 released in Japan before the Mega Drive, Sega beat TGX16 to market in North America by a couple of weeks.

The SEGA Mega Drive launched in Japan in October of 1988 to lackluster sales. The Japanese market was dominated by the TurboGrafx-16 (called the PC Engine in Japan), which had already launched the year prior and was outselling the Famicom (Japanese version of the NES), and held a market share that Sega couldn’t break though.

Ten months later, in August of 1989, SEGA released the SEGA Genesis in North America, bundled with a port of their con-op arcade hit Altered Beast. At the time Sega of America’s CEO Michael Katz had put together an aggressive marketing campaign and put a focus on games specifically geared towards an American market using celebrity names to sell the games, such as .

The Console Wars:

While the Genesis sold well, by the end of the ‘80s it had still not toppled Nintendo's market share which still dominated North America, and was going strong thanks to the release of Super Mario Bros. 3 in 1988.

This lead to the console wars with both Sega and Nintendo publically battling it out. Consoles that also tried to tap the North American market such as the TGX-16 and Neo-Geo fell by the wayside.

The CEO of Sega’s corporate headquarters in Japan decided to shift the management of Sega of America from Michael Katz to Tom Kalinske. The companies new U.S. based CEO started aggressive, focusing beyond marketing and celebrity branding to sell games, but instead on establishing a killer app franchise specifically for the Genesis.

The Hedgehog That Tipped The Scales:

In 1991 the tipping point started to occur. With Nintendo owning the lions share of the market thanks to the Super Mario Bros. franchise, Sega finally found a game that resonated equally as well, Sonic the Hedgehog. Designed primarily for American audiences, Sonic was fast-paced and innovative platformer and an instant hit. Gamers started scrambling to run out and get the now two-year-old Genesis console just to play the hot new game.

However Nintendo had their own weapon in the console war, the same year Sonic released in the shores of North America, so did Nintendo’s own entry into the 16-bit era, the Super Nintendo. The SNES was a juggernaut in the business and even though Genesis sales were steadily increasing thanks to Sonic, it was quickly surpassed by the SNES.

Then Kalinske got even more aggressive, he dumped Altered Beast as the game bundled in-pack with the Genesis and replaced it with Sonic, and dropped the price of the console by $10, making it the least expensive 16-bit system on the market. Sure it would mean less of a profit on the hardware, but once gamers bought a Genesis, SEGA would more than make their money back on individual game sales.

The gamble worked and the Genesis began dominating sales. By the end of 1993 Sega owned 60% of the 16-bit console market in North America, with Nintendo’s sales dropping to 37%.

The International Mega Drive:

Sega’s success in the ‘90s continued to rise internationally. While it never truly caught on in Japan, it piggybacked on the success of the Master System in Europe and Brazil, quickly becoming the best selling 16-bit systems in those territories.

Today the Genesis is still well known as one of the best consoles ever, with popular ports of their games releasing in droves for Next-Gen consoles, including the massive collection Sonic's Ultimate Genesis Collection (titled Sega Mega Drive Ultimate Collection internationally). In Brazil it remains a dominant force, with the Mega Drive still being manufactured by Tec Toy with new games being released specifically for Brazil.