REDWOOD CITY, Calif., March 28 -- Sega of America announced Thursday it will lower the price of its Sega Saturn advanced videogame player by $50 to $249 April 1. Sega, which is facing strong competiton from the $300 Sony PlayStation, said strong sales convinced it to drop the price. It said the console, which is designed to run compact disks, has topped 3.5 million in worldwide sales with North American sales surpassing 500,000 with more than 25 million Sega Saturn games sold. Sega began shipping a $400 Sega Saturn player last May four months ahead of schedule. It lowered the price when Sony rolled out the PlayStation in September. Industry analysts have noted even before Sega's price cut that prices for the Saturn and PlayStation were unlikely to give either company much profit from sales. Instead, the machines are discounted in hopes of generating sales from the far more lucrative software side. Both the Saturn and PlayStation are powered by 32-bit chips designed to give players performance approaching computer workstations and arcade players. Sega also announced that Sega Saturn systems thatinclude the 'Virtua Fighter Remix' software will be reduced by $50 to $299. Tom Kalinske, president and chief executive officer of Sega of America, said the drop in price will broaden the market sufficiently for Sega to sell more than 1 million Sega Saturn systems in North America in 1996. Sega said it will release 30 games developed in-house for the Sega Saturn in 1996. Additionally, 150 Sega Saturn games developed by other companies are expected to ship this year.
Sega said its unit sales doubled from September to December and remained consistently strong throughout the first quarter. Sega also announced Thursday it has agreed with Japanese software distributor Softbank Holdings to form a joint venture to bring Sega's software to the personal computer entertainment software market. Called Sega Entertainment Inc., the company will also develop original programs for the PC based on Sega's properties. Kalinske said the home PC market will continue to grow and PC entertainment software will become more popular, but predicted videogame consoles such as the Saturn will maintain their dominance on TV sets for family room entertainment. 'Sega's mission is to deliver interactive entertainment wherever consumers want to be entertained, be it on a family PC in the home study or on a TV-based console system in the family room,' Kalinske said. 'Clearly Sega has the opportunity to leverage its arcade, Genesis and Sega Saturn game and character assets across the growing installed based of PCs in the home.' Kalinske said a test market of three Sega PC products in December generated strong response. 'We need a separate company and the expertise of Softbank to fully address the differences between the videogame console business and the home PC business -- hence Sega Entertainment,' he said. The new company will be headed by Shinobu Toyoda, who will be president and chief executive officer while retaining his position as executive vice president and chief operating officer at Sega of America. Sega Entertainment plans to deliver more than 20 PC entertainment titles from Sega's 1996 arcade, Saturn and Genesis lineups by Christmas. It will also develop original PC titles based on Sega properties such as Sonic the Hedgehog and Ecco the Dolphin to market in 1996.