Michael GirdleyGirdley Enterprises, Girdley Enterprises, Inc. · Business builder and investor

The Sega mistake that created PlayStation

Name: The Sega mistake that created PlayStation
Uploaded: 2026-06-10T15:45:35+00:00
Duration: 1 min 12 s
Channel: Michael Girdley
Description: In this concise YouTube monologue, Michael Girdley recounts how, in the early 1990s, Sega and Sony briefly partnered on a joint console project. Sega…

10 Jun 2026 · 1 min

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1:12

In this concise YouTube monologue, Michael Girdley recounts how, in the early 1990s, Sega and Sony briefly partnered on a joint console project. Sega sent engineers to teach Sony the basics of console hardware and game development. When Sega’s board dismissed the venture, Sony retained the knowledge and used it to create the PlayStation, announcing at E3 1995 a console priced $100 less than Sega’s offering. The PlayStation subsequently outsold all Sega consoles combined, leading to Sega’s catastrophic $400 million loss in a single year and its eventual exit from the console market. Girdley frames the story as a cautionary lesson about competition emerging from within a company’s own ecosystem and points viewers to a longer deep‑dive linked in the comments.

Chapters

Sega literally would teach Sony how to make the PlayStation and put them out of business. In the early 1990s, Sony and Sega were actually partners. They had looked at producing a video game console together, and Sega CEO Tom Kalinske had actually sent his engineers over to teach Sony how to make their own version of a console and console games. Sony's Japan president even thought it was good business sense. They've generally considered getting into the market, except they really consider getting in the market, but But Sega, their board was scared of the whole thing. They didn't think Sony was serious about getting in the game business, so they killed the deal. So Sony took everything that, uh, Sega had taught them and used it to build their own console called the PlayStation. At E3 in 1995, Sony announced that their console would be $100 cheaper than Sega's, and it would go on to outsell every single other Sega console combined. 6 years later, Sega would lose $400 million in a single year because they were losing the console wars. And that year they would exit the business entirely. The lesson is that competition can come at you from almost any direction. Sometimes it will come at you from inside the house, and in this case, that's exactly what happened to Sega. If you're interested, I did a deep dive on this entire saga of Sega and the console wars. Uh, check out the link, uh, in the comments below.