Sega Channel: The Forgotten PlayStation Plus of the 90s

Sega Channel

If you were one of those lucky kids who had access to the Sega Channel in the mid-1990s, you legitimately have bragging rights as one of the coolest kids ever.

Sega may have had some dramatic ups and staggering downs, but the company’s long history points to several moments of impressive innovation and forward-thinking. From early 3D gaming on the Master System, to a special TV tuner that could turn your Game Gear into a mini set, Sega has never been afraid to try something different.

Many people know that Sega tried to get in front of online gaming in a big way by including a modem with their powerful Dreamcast console in 1998, but did you know about the company’s earlier effort with digital gaming? Going all the way back to 1994, we have the fascinating story of the Sega Channel.

Debuting in mid-1994 in Japan and the US, with further releases in various worldwide markets between 1995 and 1996, the Sega Channel was truly ahead of its time. A digital game service that demanded only a special adapter that plugged into your console and a cable TV subscription, making it a remarkable precursor to Game Pass, PlayStation Plus, and the larger concept of digital game distribution as we know it in the present. Let’s take a closer look at the history of the Sega Channel, some of its most notable games, and why it’s almost impossible to know the full story of this premium service 30+ years later.


A New Way to Distribute Games

Sega Channel
Sega Channel

By 1993, Sega had clawed their way up from Nintendo rival longshot to a serious competitor for console dominance in the United States. With 45% of the US market, the company was looking for new ways to distribute what was now a sizable catalog of games. The home video rental market wasn’t going anywhere, at least not back then, so the challenge was to find alternatives that wouldn’t do anything to rock that particular boat.

The concept of the Sega Channel in hindsight sounds impossible. Keep in mind that this was all done in the very earliest moments of the internet as we know it today, which means that this distribution network could not rely on that extremely limited technology to get Sega games into homes. While Sega had released a device known as the Mega Modem in 1990, exclusively in Japan and parts of Asia, the Sega Channel would need something more powerful and more reliable to be a success.

The solution as to how Sega Channel would work would come down to using television. Subscribers would purchase an adapter, as well as a subscription package from their cable provider that would include the channel itself. That was all you needed to access the deep library of possible titles Sega promised you could play every month.

And Sega delivered on that promise. From the moment the service launched in Japan in May 1994 and in the US on June 1st, 1994, players were treated to anywhere from 50 to 100 games. Titles were usually rotated monthly to ensure you would always have something new to play. Sound familiar? There were a few caveats to this service, but for all intents and purposes, this was Sega embracing the rental market in a way that made them very distinct from Nintendo.


Early Rollout

Sega Channel
Credit: Sega Retro

“The best thing to happen to TV since color!” a US brochure for The Sega Channel would proclaim. Sega had always been a believer in the value of the rental market, and the channel would simply be an extension of that where the “programming” would be all Sega all the time.

As Sega of America’s director of marketing services told the South Florida Sun-Sentinel in 1993: “The audience for video games is very sophisticated. They won’t buy a game unless they know it’s worth playing.” This was a very different attitude from Nintendo, who at one point actually sued Blockbuster in 1989 for renting out their games.

To make the Sega Channel a reality, Sega entrusted the job to Pacific SoftScape, who had previously developed an X-Men game for the Genesis. And while Sega would begin to experience a litany of headaches unrelated to the conception and release of The Sega Channel, development of the service by all accounts was straightforward. The project saw some minor delays, but with a focus on the relatively larger support for cable distribution throughout North America, The Sega Channel held a demonstration at the 1993 CES Show and by early 1994 was already running small tests for the service in Japan.

In June, the Sega Channel rolled out a more ambitious testing phase in 12 US markets. As part of a joint venture between Sega and cable heavyweights Tele-Communications and Time Warner Cable, the Sega Channel offered to more than five thousand customers was a successful enough venture for a plan to roll out the service nationally in December of 1994. By the end of the year, the Sega Channel was available nationally in many locations across North America.


Was Sega Channel Successful?

With their usual edgy attitude, practically a trademark for Sega at this point, the company began advertising the channel in earnest beginning in late 1994 and early 1995. Featuring music created by ToeJam & Earl composer John Baker, the aesthetics associated with the service, from the logo to the menu screens, were designed with a similar visual style to that game. With attractive packaging, ease-of-use, and some effective advertisements, Sega experienced success almost immediately with their unique, ambitious venture.

How successful were they? By the end of 1995, over 200 cable systems carried the service throughout the country. At its peak in the United States alone, the channel was available to roughly one third of the entire country’s population. Around 250,000 people were using the service at its peak, with The Sega Channel soon becoming preferable to many over renting games from a video store.

As for the rest of the world, it’s difficult to say. While no country adopted Sega Channel more fervently than US players did, with the service available to an additional 10,000 players at its peak in Canada, the service seemingly did well for itself in other pockets of the world. Japan had their own Sega Channel mascot, a bird, as well as a unique BIOS screen with Sonic the Hedgehog. Players could access 30 games at any one time, which was less than the US subscribers got, but with plenty of exclusives that for many years were known only for their association with The Sega Channel.

Dyna Brothers 2 Special is an example of this, with the game only being available on the channel until a Japan-only Wii Virtual Console release several years later. The compilation release Game no Kanzume Otokuyou was once believed to be lost forever due to its exclusivity to the channel but was in fact found on the Sega Dreamcast’s Dream Passport 3, the updated disc that gave Dreamcast users basic internet functionality and more.

The poor UK wouldn’t get Sega Channel until the summer of 1996, failing due to a range of issues to ever get out of the test markets where it originally launched. The service would launch in other European countries and various territories to minor or unknown success, but nothing equaled how well The Sega Channel did in the US. Unfortunately, this would not be enough to sustain the service as Sega began experiencing internal problems and headaches with their consoles from the mid-90s on, but it was clear that gamers saw the value in what Sega sought to achieve.

And for $12.95 a month, with a one-time activation cost of $25, there was a lot of value for Sega Channel fans.


A Typical Sega Channel Experience

Despite minor issues, such as keeping a clean signal to assure an uninterrupted download of the game a player wanted, something that cable providers struggled with throughout the decade, using The Sega Channel was as simple as it was fun. Players would boot up the Channel and could access games across several different categories. Test Drives offered players an opportunity to try out new games such as Barkley Shut Up and Jam and Castlevania: Bloodlines. The Arcade featured games like Mortal Kombat and Ecco the Dolphin. The Think Tank dealt in puzzle games, with the Family Room and Sports Arena categories focusing on, you guessed it, family games and sports titles.

From previews to upcoming games, to special releases unavailable outside of the service or Japan, to special promotions only offered to subscribers, The Sega Channel was comprehensive and never failed to give you something to check out. No matter what you liked to play, it was almost a certainty the channel would have something for you.

With The Sega Channel, it was even possible to play games that didn’t have a traditional cartridge release. This includes Mega Man: The Wily Wars, Pulseman, and Alien Soldier. These games can all be played today, and through emulation, it’s even possible to recreate a strong facsimile of what a Sega Channel experience might have entailed.

Hundreds of games made their way to The Sega Channel at one time or another. But nothing lasts forever, and that’s sadly particularly true when it comes to basically anything Sega did in the 90s.


The Decline and End of the Sega Channel

Sega Saturn Failure
Sega Saturn Failure

While the Sega Channel did well in a vacuum, particularly in the United States, it wasn’t as successful as Sega had ultimately hoped. 250,000 subscribers at the height of its success is a commendable achievement, but loses some shine considering Sega had anticipated a million subscribers by the end of the channel’s first year. Keep in mind that the channel was available at one point to millions across the United States.

So, why didn’t the channel do better? “Who would spend $13 a month to play games for a dying system?” Ken Horowitz wrote in a retrospective on the channel in 2004. Perhaps there’s some truth to that. By the time The Sega Channel launched fully in 1995, the Genesis was a 6+ year old console on the way out. Sega had already tried (and failed) with products like the Sega CD and the infamous 32X and was focusing on the Saturn by the time their Sega Channel really got going. This could be described as another example of Sega’s notorious inability to plan for the future.

If the Sega Channel had launched earlier in the lifespan of the Sega Genesis, some have argued, it would have done much better, and almost certainly would have enjoyed the massive success the Genesis maintained for the first half of the 90s. To put it another way, when the Sega Channel was announced in 1993, the company was still doing fantastically with the Genesis. The Game Gear was building up its own momentum, as well.

Flash forward to 1995 and 1996. The Sega Channel is in full swing, but Sega is focusing on the Saturn, already getting its ass thoroughly kicked by Sony and Nintendo. They will abandon the poor Saturn in less than two years to focus on the Dreamcast, which will also sputter and suffer a premature death by the end of the decade. The Sega Channel benefitted from a huge library due to the age of the Genesis, but the tradeoff seemingly for that was that gamers who wanted to really keep up with Sega would have to do so by purchasing new systems.

That tradeoff was fine for a quarter of a million subscribers, but it couldn’t last with an aged console that was only going to get older. There was talk of 3D peripherals and expanding the service to Saturn consoles, but nothing ever came of these concepts.

Sega shuttered the Sega Channel permanently on June 30th, 1998. That’s a four-year run that we can’t help but admire. The Sega Channel was a good idea that perhaps wasn’t executed in the most effective fashion, but it was ahead of its time, and proved an audience for digital gaming existed long before the internet made this a viable reality for virtually everyone. When you look at what we have now with services like PlayStation Plus, Game Pass, or even the virtual retro consoles available on the Switch, the value of something like the Sega Channel in the 90s becomes clear. It paved the way for what we have today.

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