Gamer's Outpost LLC

by Owen S. Good

In a blistering recap of Sega’s mistakes, the former CEO of Sega of America ripped the company for making “the stupidest decision ever made in the history of business” when it rejected a partnership with Sony to make a console back in the 1990s.

Talking to GamesIndustry.biz, Tom Kalinske said that when Sega’s board turned down the proposed partnership with Sony, “I didn’t feel they were capable of making the correct decisions in Japan any longer.”

Kalinske left Sega in 1996 having worked for the company at the height of its power in the home console market, during the knock-down/drag-out fight between the Genesis and the Super Nintendo. He has discussed the proposed partnership before, saying it arose from the animosity Sony felt for Nintendo when their notable partnership proposal also fell through.

Kalinske said he and two Sony of America executives had come to an agreement to build a single platform, share the development costs and the losses it would inevitably take in the first few years, but that both parties would benefit. “We go to Sega and the board turned it down, which I thought was the stupidest decision ever made in the history of business,” he said.

Even after two failed partnerships, Sony pressed ahead with its own console — the PlayStation.

He seems to have quit at the right time, as the successors to the Genesis were commercial disasters and Sega limped into the new century as a third-party publisher.

Lately, good news has been rare for Sega; though it made a small operating profit in its last fiscal year, following years of losses, it recently announced another wave of job cuts, including the closure of its U.S. offices in San Francisco.

While Sega had an agreement to deliver three titles exclusively for Nintendo platforms, the third, Sonic Boom, was a critical flop and a commercial disappointment as well, moving just 450,000 copies during the holiday buying season.

“I do think some great brands obviously have been destroyed, Atari being one of them.” he said. “Why didn’t that survive? I think there’s a lot of bad decision-making involved in killing brands like that. I hope Sega isn’t the same thing.”

GamesIndustry.biz has a lot more in its interview with Kalinske, who remains with LeapFrog, an educational entertainment company he joined shortly after departing Sega. Kalinske does not think Sega is doomed, necessarily, and it remains a very strong brand.