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 and make sure to sign up to get Old School Gamer Magazine for free by clicking here!

Leonard Herman Leonard Herman (26 Posts)

Leonard Herman, The Game Scholar, is regarded as one of the earliest and most respected videogame historians. The first edition of his book Phoenix: The Fall & Rise of Home Videogames, which was published in 1994, is considered to be the first serious and comprehensive book about the history of videogames. He has written articles for Videogaming & Computer Illustrated, Games Magazine, Electronic Gaming Monthly, the Official U.S. PlayStation Magazine, Pocket Games, Classic Gamer Magazine, Edge, Game Informer, Classic Gamer Magazine, Manci Games, and Video Game Trader, which he also edited. He has also contributed articles to several videogame-related books, including Supercade, The Video Game Explosion and The Encyclopedia of Video Games. Mr. Herman has also written the book ABC To the VCS (A Directory of Software for the Atari 2600), a compendium of game summaries. He has also written and designed user's manuals for the following Atari VCS games: Cracked, Save the Whales, Pick-Up, Rush Hour, Looping, The Entity and Lasercade, as well as the user's guide to Ralph Baer's Pinball! for the Odyssey2. In 1994, he founded Rolenta Press, a publisher of videogame books, whose catalogue included Videogames: In the Beginning, by Ralph H. Baer, the inventor of the videogame console, and Confessions of the Game Doctor by Bill Kunkel, the world's first videogame journalist. Two Rolenta Press books were included in a list of the top ten videogame books of all time by Game Informer magazine in 2008. Mr. Herman has served as an advisor for Videotopia, Classic Gaming Expo and the National Videogame Museum. He has appeared in several episodes of G4's Icons and in the documentary, The King of Arcades. In 2003, Mr. Herman received a Classic Gaming Expo Achievement Award in recognition for his accomplishments in documenting game history