Ex-Sega Of America CEO Calls Failed Sony/Sega Console 'The Stupidest Decision Ever'

Sega Sonic — The Sonic the Hedgehog character is seen behind a video game screen showing a Sega Corp logo at a game arcade in Tokyo. Reuters/Kim Kyung-Hoon

It's fairly common knowledge that during the Dreamcast era, Sega and Microsoft worked together quite closely. The Dreamcast OS ran on a modified Windows Kernel called Windows CE and Microsoft even considered purchasing the Japanese company to help develop games for its fledgling Xbox console. Less well known is the fact that Sony and Sega almost collaborated on the design and construction of a videogame console years prior. In a new interview, former Sega of America CEO Tom Kalinske recalls the moment it all nearly came together.

Speaking to website, Games Industry, Kalinske recalls that one of the primary reasons he left Sega was the failure of its Japanese arm to close the deal with Sony. He states that then Sony Corporation of America president and CEO, Mickey Schulhof and he had already agreed to create a single platform.

The duo had decided that each company would share in the research and development costs associated, benefit from any profits, and split any losses incurred. Kalinske says that in those days, Sega had considerably more software development expertise, whilst Sony had experience creating hardware. This situation made the proposed deal extremely attractive. Despite the apparent benefits, Kalinske says Sega of Japan killed the proposal dead in its tracks.

"We go to Sega and the board turned it down, which I thought was the stupidest decision ever made in the history of business. And from that moment on, I didn’t feel they were capable of making the correct decisions in Japan any longer," he said.

Sony would go on to create the all-conquering PlayStation 1, and the Sega brand would never reach the dizzying heights of the 8 and 16-bit eras. In spite of Sega's recent troubles, Kalinske states that a turnaround is not impossible for the company. He notes, however, that brands are not immortal, stating that a long series of ill-advised decisions can kill even the strongest brand. He pointed to Atari as an example of a once mighty brand that has since fallen off the map.

Starting with the tragic failure of the Dreamcast, Sega, once an industry powerhouse have been in a state of gradual decline. The company is no longer a player in the hardware space and even its marquee releases are routinely lambasted by gamers and critics alike. In its review, Gamespot awarded the company's most recent high profile effort, "Sonic Boom: Rise of Lyric" a 2/10, stating that it managed to fail even at the most fundamental levels of game design.

As noted by PlayStation Lifestyle, Kalinske's comments come in the wake of a recent announcement by Sega stating that the company aims to downsize and focus its efforts on Mobile and PC games. The company's new focus will allow it to create games that utilise its valuable IP, whilst avoiding the big budget, high risk AAA sector.