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That had nothing to do with their marketing, though. The marketing worked great. Sega made all its great games in Japan and yet they always remained the underdog there on the console market, and only dominated in the arcades. In fact the only time they started selling decently in Japan was with the Saturn, and the Saturn was associated with the Segata Sanshiro ad campaign there, which is pretty aggressive (in a weirder, funnier Japanese way - it's literally the kids being beat up for not playing Sega, which you could never do now). They failed largely due to a certain recklessness in constantly releasing new hardware and pursuing new tech, which IMO probably came from their arcade roots, since arcade hardware changed often and always had to be cutting edge. Even a game like a Phantasy Star Online, which was popular and influential, probably required too much financial investment, because they wanted to push console online gaming first.
also for a strange reason no one mentions that Nintendo in the 90s dropped out of the still lucrative arcade business to focus on console games.
That was even more important than being #2 for a while,sacrificing their arcade division