Sega admits defeat over the battle of the consoles

Retail Inteco research shows that PlayStation wins popularity contest over Saturn.

Struggling console manufacturer Sega has admitted it is scrapping its over Saturn. Saturn machine in the US, anticipating a massive loss from the withdrawal.

The signal that Sega had lost the console war with the Sony PlayStation and Nintendo N64 came with the announcement that it was expecting to write off Y40 billion for the year ending 31 March from its US market, and a worldwide net loss of Y32.8 billion. Sega had expected to make profits of Y2 billion worldwide.

But the US withdrawal has raised concerns that Sega could also pull the plug on selling the console in the UK.

Mike Welch, analyst at Inteco, said: 'Last year, the PlayStation sold about 1.2 million and the Saturn sold 90,000. The research we did revealed the PlayStation as a clear leader. Those planning to get a PlayStation as opposed to a Saturn was 4:1 in the UK and France, and 6:1 in Germany. That was in July 1997, and it got worse after that.'

A representative for Sega said: 'The problems are with the US market.

Sega is still committed to the UK. There is a portfolio of games that will come out by the end of the year for the Saturn. Next year the focus will be on the new hardware developed with Microsoft, code named Katana.'

Rob Borland, marketing manager of THE Games, said: 'Sega has a very low market share, something like one per cent in hardware and software is insignificant. The Saturn is now appearing in low cost bundles and that usually signals an exit from the market.'

Borland added that retailers had already decided which consoles they were backing, and it could be seen by the lack of space given to Saturns.

He continued: 'Sega has tied its colours to the mast already - it will throw everything it has behind Katana next year. So why should retailers continue to back the Saturn.'