> Hindsight suggests none of those really worked and that Sega's other primary obsession, lowering hardware costs after its launch, both for competition and margins, backfired. The retail margin on a core $250 Saturn system, without pack-in games, was 6 percent, or $15, while Sony seemed to be offering 10 percent core, 15 percent pack-in.

> "How Did Sony Do it?" one slide rhetorically asks. The answer, according to Sega, is that it was perceived to be cheaper, its software "looks better than ours," that Sega "equity has been damaged by 32x and Sega CD," and that Sony has "effectively leveraged their considerable equity from consumer electronics." All Sega had to do, according to the next slide, was improve its software, get pricing advantage, improve its advertising, spend better on TV advertising, and "dramatically improve" its game timing. Simple enough.