As Nintendo and SCE volleyed for the top position, it was plain to see that Sega was no longer in the running, even though the Saturn was outselling the N64 in Japan. American sales for the Saturn had fallen so dramatically during 1997 that Sega of America decided to completely stop supporting it. Just before Christmas 1997, distributors and retailers were warned to place their final Saturn orders, because the merchandise wouldn’t be available afterwards. The company cut 30% of its work force in January as retail stores began discounting Saturn software for as low as $5. By March, the price of the remaining consoles was lowered to $100. Although they were denied by Sega of America, rumors persisted that the console would cease ship[ping after March 31.
Despite the gloomy atmosphere at Sega of America, the executives at Sega Enterprises in Japan were determined to begin 1998 optimistically. Sega’s chairman, Isao Okawa, officially announced at a New Year’s Eve party that Sega and Microsoft were jointly working on Sega’s new system, the Dural. Before the end of January, that name was changed to Katana (an extremely sharp, short, Japanese sword typically carried by warriors). Sega announced that the Katana would be available in Japan by Christmas 1998, and in the rest of the world in September 1999. The announcement also added that the console might be sold in Japan by NEC and Hitachi under their own brand names, as well as by Sega.
Check out more of the rich history of the industry in Leonard Herman’s book Phoenix IV available at Rolenta Press www.RolentaPress.com and make sure to sign up to get Old School Gamer Magazine for free by clicking here!
