With the popularity of streaming content services like Netflix and Steam clearly indicating a massive shift in how people prefer to consume media. Many forget that dark time before everything you wanted to watch or play was instantly available: the 90s.

The Dark Ages of the Internet and gaming had one shining light, a company that amazingly predicted much about the future of entertainment, but seemed almost allergic to success: Sega.

Sega had a massive resume of hits (Master Drive, Genesis, Dreamcast, Sonic the Hedgehog), and many misses (32x, Sega Saturn) but nevertheless established a culture of taking fantastic risks with how users interacted with their games, especially with their hardware platforms and peripherals (Seaman, anyone?).

One of their greatest achievements in retrospect was the Sega Channel, a cable-based platform and console add-on that brought about 50 Sega games and demos directly to your Sega Genesis. In the almost prehistoric year of 1993.


Originally appearing in Japan in 1990, the Sega Channel was a peripheral for the MegaDrive (known as the Sega Genesis in the States) and dubbed the “MegaNet”. The first incarnation of the Sega Channel performed poorly due to its weak offering of service-specific titles, its most popular title was a banking software bundled with the hardware add-on.

The MegaNet, while certainly revolutionary for offering online delivered content, suffered from competing directly with the release of Super Mario Bros. 3, which was released only a week earlier by Nintendo. Unfortunately, these factors combined to ultimately make the MegaNet an amazing technical achievement, but a commercial failure.

Despite the MegaNet’s lack of popularity in Japan, Sega seemed enamored with the idea that fans of the company’s games would pay for the ability to have nearly instantaneous access to a library of digital games.

Turns out they were right.

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Test marketing began in North America in 1993 to positive results. In 1994 the service launched in Pittsburgh, PA. Sega had maneuvered a deal with Time Warner and TCI to deliver its games by way of cable, and partnered with General Instruments and Scientific Atlanta in order to produce the adaptor piece, which fit into the cartridge slot and required an external power adaptor be plugged in as well as a coax cable. All for a reasonably expensive price, a $25 installation fee and $15 bucks a month.

Once the service was set up, players booted up their console to find interactive menus with custom art and graphics and some funky music by John Baker of Toe Jam and Earl fame. To a kid that had never seen anything like this, it was an amazing experience. A menu of nearly 50 games organized by category, all (nearly) instantly available at the click of your control pad. The service launched with heavy hitters like Columns, Golden Axe II, and Shining Force II, not to mention region-specific titles that were Sega Channel exclusives in the US like Mega Man: The Wily Wars. The most exciting feature for 90s kids was the ability to play demos of upcoming titles like Phantasy Star IV, and Road Rash 3 directly online.

The technology Sega put behind their channel was simple, but massively innovative. While not technically an Internet-based platform due to its one-way signal broadcast, it still provided cable-based on-demand gaming. Something that was unheard of at the time, even for PC gamers.

The channel worked when the cable company would broadcast a continuous stream of code which the adaptor, which was plugged into the system’s cartridge slot, would then “download” and save, allowing the console to render which ever game was picked by the home user.

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Once you turned off the power to the system, the file would be deleted allowing for the player to reboot the Sega Channel menu and load a different game. The logistics of wrangling cable companies, satellites, development teams, and ultimately users, to support this revolutionary idea was something of a business miracle, especially considering the Sega Channel’s barely moderate success.

An important development, however, was that this service required the cable companies to free their signal of excess noise, requiring not only continued maintenance but in some regions also a complete upgrade of the existing infrastructure. This would become somewhat crucial to the later development of cable-based Internet services, meaning that once again, Sega was drastically ahead of the curve.

By 1997, the Sega Channel was carried by over 100 cable TV systems, and had garnered a none-too-shabby user base of 250,000 subscribers. Unfortunately for Sega, it proved to be a case of too little, too late. With the popularity of Sony’s PlayStation rising, the then 8 year old system had had enough.

Sega experienced monumental losses from its Saturn console and a string of non-winners like the 32X, and Sega-CD, leading to a massive audit of its divisions. The Sega Channel was an early casualty of this corporate downsizing, despite its lukewarm success and truly innovative aspirations.

The Sega Channel to this day is remembered fondly by those lucky few who had the resources available to subscribe to its service in the mid-90s. The Sega Channel remains an important part of the legacy of Sega and a cautionary business tale about market timing. Sega ultimately continued their emphasis on online and on-demand gaming all the way up to its death as a hardware manufacture.


(R.I.P Marvel vs Capcom 2 for the Dreamcast)

The Dreamcast was the first console to launch with a built-in modem, something standard in today’s world. It also was instrumental in the development of Heat.net an early pioneer of online PC gaming.

So in the end, although the beleaguered publisher and developer got whupped when the dust from the console wars settled, the company’s legacy is one of innovation and risk-taking that made ventures like the Sega Channel stick in the hearts and minds of now grown-up gamers worldwide.