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falling of Sega’s empire

Jacob Qian 

id: 23287283

Econ live 

"Only on XXX".  if you're a gamer, you're probably familiar with this phrase. This means that the product is only released on a certain game console and can only be played on a certain device. With the rapid development of information technology, major manufacturers are putting more energy into their new-era game consoles. (like playstation5 and xbox series x) It also means players’ choices when they purchase have greatly extended. But through the study of economy, we can clearly understand that more manufacturers represent more fierce competition and less personal interests. The Gaming Market has changed a lot since decades ago. Next, I'll examine some of the marketing techniques used in the game industry before and explain these positive and negative impacts by introducing the history of Sega gaming.

SEGA’S EMPIRE

If you were born in the 80s or 90s, Sega should be a very impressive name which appeared in your childhood. With its pioneering momentum in the arcade industry and a strong lineup of boutique games, Sega dominated almost every game club on the street. Especially the young people in the middle school are almost fascinated by Sega's game, the refreshing game experience makes them immersed in it. At that time, Sega almost became the master of the industry, and only a few companies can competed with it. In an effort to shore up its business empire, Sega has started buying up established studios to keep popular games under its own control. Many talented game designers either quit the industry due to high competitive pressure or were forced to join Sega, giving up the freedom to develop their own games.

SIGNAL OF LOSING

In the late 1990s, arcades began to disappear, replaced by powerful, portable consoles for home games. SONY and Microsoft jumped at the opportunity of the changing times to become game leaders with the release of the playstation and xbox. At the same time, sega was content with its dominance in the arcade space, which led to its initial lag in the new age console. However, while sega was planning to start developing its own gaming device, nintendo's released its world-renowned FC console. This was undoubtedly a blow to sega, which directly caused SMS gaming to be delayed for 4 years. Although the hardware performance of SMS gaming is very good, but the current market has a very good competitive environment, prompted the major game manufacturers to have their own excellent game lineup, whereas Sega only has those who are behind The Times, nothing new to speak of. While the negative impacts of long-time monopoly had started to occur. Sega’s managers tended to fight against Sony and took back their position as soon as possible, so they gave the new console a higher price to demonstrate its great computing and processing power. However, this even made the situation worse. We knew that the general quality would decrease when there is a negative externality like monopoly. Sega’s high price policy did help them gain some consumers who want better gaming devices’ function. But at the same time, since the supply was not enough but the demands were increasing, the general quality of the console decreased, which caused a lot of returning cases after buyers purchased their devices. This determined Sega’s absolute failure.