The person in charge of Sega of America—or rather, its president—was named David Rosen. He was a close friend of Isao Okawa, and the two of them had jointly led Sega's acquisition. However, by now, David Rosen had largely stepped back from North American operations. Sega of America's day-to-day business had long been handled by his subordinate, Bruce Lowry, who was also slated to become the next president of Sega of America.
At nine in the morning, North American time, Bruce Lowry received a long-distance call directly from Sega's headquarters in Japan.
After only a few sentences, Bruce Lowry exploded.
"Are you people insane?! Five years? Ten years? Twenty years? Why don't you just mortgage me to the distributors while you're at it! Listen, nobody does something this crazy. This is America. I understand America better than you—better than you people!"
He swallowed a curse midway through.
He had wanted to say "JAPS."
Japan called itself JPN overseas, but Americans often used "JAPS" to refer to Japanese people—a slur roughly equivalent to the difference between "Japanese" and "Jap devils" back home.
What made it worse was that while "Japanese devils" might not even register to Japanese ears, "JAPS" absolutely did.
Bruce Lowry forced himself to calm down and emphasized again, "I will not approve this resolution, and Sega of America will not approve it either. The American video game industry is dead. All we need to do now is keep focusing on arcades, maintain our current business, and wait for the industry to recover in twenty years, just like the experts predict."
He slammed the phone down and muttered a curse under his breath.
Those arrogant JAPS—did they really think making a bit of money meant they could boss Americans around?
Bruce Lowry was an idiot.
The moment Kobayashi Tetsu heard the meeting results from Tanaka Minoru, that was the first thing out of his mouth.
Of course, Tetsu admitted that five-, ten-, or twenty-year warranties were excessive. But in the current lifeless state of the American game industry, Nintendo had already paved the way.
This approach could quickly restore distributor confidence and reestablish consoles' credibility in the eyes of players.
Tanaka Minoru was equally helpless. "Tetsu, forget it. This isn't something we can interfere with. Sega of America is—"
"—independent from Sega Japan. I know. We should just focus on making games."
Tanaka Minoru also had complaints about the situation, but North America's decisions weren't something he could change.
All Tetsu could hear on the other end of the line was loud banging noises. For a moment, he wondered if Tanaka had cracked his head open on a gasoline drum.
Imagining Tanaka Minoru pacing around, slapping his bald head in frustration, Tetsu couldn't help but laugh.
He raised his eyes slightly.
"How can we not care about the market?"
Atlus had spent nearly a year—despite all the delays—developing Sonic. If console sales killed the game's prospects, Tetsu would swim across the Pacific just to strangle Bruce Lowry.
He rapidly ran through the names of Sega of America's executives besides Bruce Lowry.
The most pioneering figure in Sega of America was Tom Kalinske—but he wasn't working at Sega yet.
During Kalinske's tenure, he would directly lead Sega of America in head-on competition with Nintendo of America, reaching a peak market share of 65 percent in the U.S.
Aside from him, most people in the North American branch favored conservative strategies.
"But even among the conservatives, there are some who aren't that conservative."
Tetsu thought for a moment.
"Have you tried talking to Michael Katz?"
Tanaka Minoru was baffled. "Who?"
"Michael Katz! From Sega of America's marketing and distribution division!"
There was something Tetsu didn't say.
After Bruce Lowry, the next president of Sega of America would be this Michael Katz.
During Katz's time in charge, Sega of America would show a certain level of aggressiveness, though limited by Sega's overall capabilities, he wouldn't manage to seize much market share.
"Try him," Tetsu said. "If he's given enough authority and incentives, he might just bypass Bruce Lowry and get things done."
Tanaka Minoru was stunned. "How do you know people from Sega of America?"
"Because I came back from the U.S.," Tetsu replied. "Is that reason enough?"
Tanaka Minoru didn't think it was.
Of course it wasn't—but he didn't press the issue.
Not long ago, Tetsu had met with Isao Okawa. It was entirely possible Okawa had told him.
Tanaka Minoru didn't want to dwell on it. After thinking for a moment, he said, "I still think steady, conventional marketing is enough. Fighting for market share isn't something that can be settled with just one move."
Tetsu took a deep breath and forced himself to stay calm.
"Director Tanaka, you can't think like that! If a new market isn't captured quickly, everything will be too late!
Nintendo has the resolve—they're just short on time. If we give them time to grow in North America, it'll be over. Sega of America's first-mover advantage won't last long. Right now, Sega has name recognition in the U.S., arcades, and a portfolio of titles. Americans recognize the Sega name. Once Nintendo really starts pushing, it'll be too late!"
Tetsu continued, "I've already reviewed Sega of America's financials from the past few years. They rely almost entirely on arcade machines shipped from Japan. Their own development output is practically zero. That's the biggest weakness. Sega of America needs blood transfusions from headquarters!"
If a branch lacked development capabilities and couldn't align with headquarters on marketing, the problem was enormous.
Sega's eventual collapse would come down to exactly this—headquarters and subsidiaries not pulling in the same direction.
Tetsu stressed, "We may not be able to do much else, but the market absolutely has to be secured before Nintendo makes up its mind and finds a solution. If you won't do it, I'd rather announce right now that I'm going to Nintendo. I don't want to wait to die in a company that's doomed!"
Failing to secure the North American market was a slow death.
During the SG and MS eras, Nintendo used the Famicom to seize 95 percent of the global market, establishing its name worldwide in advance.
Even though Sega would later use the Mega Drive, Saturn, and other consoles to reach a peak 65 percent share in North America, Nintendo would still claw its way back.
That was because Nintendo had already built overwhelming brand power during the Famicom era.
Tetsu's decisiveness made Tanaka Minoru suck in a sharp breath.
He couldn't understand why Kobayashi Tetsu was so unwavering.
"…All right," Tanaka finally said. "I'll talk to North America again and push them to start laying out distributor channels as soon as possible. How are things on your end?"
Tetsu pressed his fingers to his brow and did a quick calculation.
"About ninety percent done. What's left is refining some level designs and fixing bugs. I expect it'll be completely finished by April."
Tanaka Minoru replied, "President Okawa will be traveling to the U.S. soon. If you have a highly complete project, let him take it along to show the American branch. Having a finished product speak for itself is always better than empty words."
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