Author Topic: Flashback: That Time Alan Sugar Took On SEGA, and Lost Spectacularly  (Read 1073 times)

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Offline ComSoft6128

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Offline Gryzor

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Quote
Ocean Software's Gary Bracey recalled how Sugar was certain that Amstrad could take on SEGA and Nintendo - and beat them. "He was confident that the products we had were world-beaters," Bracey says, adding that Sugar had a "bullish attitude"

What was he smoking...

Offline ComSoft6128

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If I remember correctly Amstrad had no major commercial product failures up to this point - so maybe it was a "business as usual" attitude that prevailed at that time.

Offline Gryzor

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Indeed perhaps it was hubris. Certainly the marketing budget was nothing to laugh at, I don't think they'd commit that kind of money without believing in the product. I wouldn't want to be at their offices when reality sunk in...

Offline Skunkfish

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I can't imagine that £20 million marketing budget is a real figure.... Or if it is, then they must have only spent a fraction of the budget.
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Offline Shaun M. Neary

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I can't imagine that £20 million marketing budget is a real figure.... Or if it is, then they must have only spent a fraction of the budget.


20 million in the 80s would actually fit. Advertising was, and still is to this day a huge business. And Amstrad used to go all out on advertising on their products. Television, Radio, billboards, magazines, anywhere they could. They'd also factor that in for press conferences , launches, etc and the food and drink that comes with it.

Let that sink in for a second, you'll see how it would be quite easy to burn through 20 million quid!


Edit: That 20 million probably covered other machines rather than the Plus series, I'd say some went towards the PCW and the Spectrum too.
« Last Edit: 16:13, 17 May 21 by Shaun M. Neary »
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Offline Gryzor

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Well yes, but what would be the profit from each console to lead to a break even? Was Amstrad getting a cut from cartridges?

Offline Shaun M. Neary

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Well yes, but what would be the profit from each console to lead to a break even? Was Amstrad getting a cut from cartridges?


Back then it wouldn't have mattered to him to be honest, he was making nice profits on everything else that he could take a gamble here and there.
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Offline Gryzor

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Really not sure Sugar was the type of guy who would throw away 20 mil just to see what will stick...

Offline Shaun M. Neary

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Really not sure Sugar was the type of guy who would throw away 20 mil just to see what will stick...


It's all about perspective, T.
If that's 20 million just on a marketing budget alone... then it's a drop in the ocean for said company.
And it was a company that could clearly afford it given that their production budget was next to nothing as they used mostly cheap crap for all their products anyway.
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Offline Shaun M. Neary

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Something else that just came to mind. Amstrad were actually a public company by that point, so there'd be a lot of shareholders money involved in that.
Sugar himself had little to lose.
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Offline Gryzor

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...but lots of accountability, too.

Offline eto

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The whole story doesn't make sense imho.

So many aspects simply don't match:

- Roland Perry said in an interview last year, that he doesn't know a lot about the Plus and GX4000 project. If Amstrad really would have expected that this will be a huge success, I bet that every manager at Amstrad would have watched this closely. From all I have read, the GX4000/Plus project sounds more like a side project with little focus.

- 20M marketing budget vs. 100 street price vs. 15,000 units sold. That doesn't make sense... 20M makes sense if they were either expecting to sell 2M machines in the first year (and still have 10% marketing cost per machine) - but then it doesn't make sense to produce only small quantities. I am not aware of a story that Amstrad buried hundreds of thousands GX4000 in a desert or so... And if they didn't plan to sell a massive amount of GX4000 in the first place, then a 20M budget doesn't make sense.

- I also doubt that the company could spend 20M of budget in 1990. In 1990 Amstrad was in deep trouble due to the harddrive quality problems in the 20x86 line of computers. Also, I can't find anything about a 20M budget for the GX4000, except for RetroGamer issue 52, where this number is mentioned, but without any source.

- I doubt that Sugar every really planned to "take on Sega". Sugar always focused on identifying market niches where there is no competition. Usually the "a lot cheaper and good enough" niche. He left the market, once competitor addressed the same niche. if the sales numbers became massive, like with the CPC or PCW, it was because he misjudged the size of the market niche but not because of gaining market shares from direct competitors in the same niche.

- The GX4000/Plus is a cheap, simple upgrade over the CPC range. Highly compatible and the least possible upgrade to overcome the CPC's problems as a gaming machine. Except for the 4096 color palette, as a gaming system it is just on par with a C64, NES or Master System but anything 16bit would wipe the floor with the GX4000.


Putting all this together, my conclusion would be, that the whole GX4000/Plus project was a typical Sugar-idea to make some money without investing a lot. I doubt that Sugar really understood the technical limitations of the CPC range and probably thought it can be extended to produce something cheap that "looks like 16 bit, can do Sprites and 4096 colors". The niche could have been those households that wanted to play 16bit like games but didn't want to spend more than on a NES or Master System. Also the pricing of the cartridges then makes sense, as they were of course much higher than cassettes but still cheaper than the typical cartridges of the other systems. A market probably big enough for 200.000 consoles, maybe more if it works out very well.

But this time it didn't work out. Yes indeed, it was cheaper but  (unlike the CPC, PCW, PCs or even the earlier stereos) it was NOT good enough. Not only customers but also software developers didn't see why they should invest into a Gx4000.






Offline Gryzor

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Thanks, that would be what I'd have written if I had more time :D

Only thing I'd add is that the way I see it the Plus/GX range was more of a quick money grab. Not that he believed they would fail as spectacularly as they did, of course, but I don't believe he meant to take on Sega, either. Just go in, sell as much as possible in a short time, cash out.

Offline norecess

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On top of what @eto said, let's note the absence of a solid line-up for games.

When half of the proposed games are conversions from some existing Amstrad CPC games (already available for cheap), it's a problem. We expect from a new machine a new generation of games, not the exact same ones with some (welcomed) cosmetic additions.

That said, that's exactly what makes this platform so interesting and appealing, nowadays. It's still possible to "fix" some of those mistakes (under-powered console, bad games, etc) with homebrew development. And thanks to the @gerald 's C4CPC, this is exactly what is happening right now: the recent productions (and the coming ones !) proves that the console is actually at the right place in history: a mid-ranged console, somewhere (but not exactly) between the Master System and the Amiga.


Alan Sugar's vision regarding the Amstrad Plus / GX-4000 "could have worked" ; I personally believe that everything with the Amstrad Plus / GX-4000 is a problem of timing. Xmas 1988 for both Amstrad Plus / GX-4000 and everything would have been a different story!
« Last Edit: 16:53, 18 May 21 by norecess »

Offline Gryzor

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We expect from a new machine a new generation of games, not the exact same ones with some (welcomed) cosmetic additions.

That's why I said it was a quick money grab. Same goes for the Commodore 64GS, except that one was even worse and much uglier.

Offline ComSoft6128

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I found the article when I was looking for info on how many GX4000/Plus computers were made but all I could find was the entry from Wikipedia:

"The GX4000 was both Amstrad's first and only attempt at entering the console market. Although offering enhanced graphics capabilities, it failed to gain popularity in the market, and was quickly discontinued, selling 15,000 units in total.

Not the same thing - does anyone have a (very) rough figure on the production run?

« Last Edit: 17:08, 18 May 21 by ComSoft6128 »

Offline chinnyhill10

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I found the article when I was looking for info on how many GX4000/Plus computers were made but all I could find was the entry from Wikipedia:

"The GX4000 was both Amstrad's first and only attempt at entering the console market. Although offering enhanced graphics capabilities, it failed to gain popularity in the market, and was quickly discontinued, selling 15,000 units in total.

Not the same thing - does anyone have a (very) rough figure on the production run?


The 15,000 figure is clearly suspect once you factor in France, Germany and Spain. 30,000 was the figure I was told at some point in the 90's. But I can't remember who told me that, so in some regards you can regard that as reliable as the Retro Gamer author who pulled the 15,000 out of his arse and now gets quoted on Wikipedia as a verified fact.


15,000 was the figure I heard attributed to the Commodore GS and that had barely any advertising campaign behind it.


20 million advertising budget. Again factor in France and Spain. TV adverts to be shot and produced, and that budget also covered the CPC Plus Range. There were full page adverts taken out for the Plus and GX4000 in a number of publications including non computer publications such as newspapers and comics like Buster. Certainly both TV and print spot rates were much higher in those days due to larger audiences. Today print is dead and TV audiences have vastly declined.


Across 3 countries you could burn through that money in no time.


As for Amstrad's hubris? They'd had success with products that weren't cutting edge but were marketed well. But Sugar misjudged the console market. Simply didn't understand that the audience is different and you have to have killer games. In many ways the hardware doesn't matter if you position it right. The NES is an underpowered pile of shit but that Christmas it had Turtles. And Christmas 1990 was the Christmas of Turtles. At the higher end the Megadrive had just launched and Sega were THE arcade game people. So if were into Turtles you got an NES, if you were into games you got a Megadrive. And everyone who wanted a computer went and got the Amiga Batman pack.


Now if they had launched the GX4000 in Christmas 1989 the market may have been wide open. Not saying they would have had dominance, but they could have had a couple of years of being the third console player in the UK. Indeed remember the Atari 2600 was still selling in large amounts at this time. Atari were dumping large amounts of stock via catalogue sellers very cheaply. You didn't see them in shops nor see any games, but they carved out a niche selling to Mums and Grannys in the likes of the Littlewoods catalogue where little Johnny got ancient tech palmed off on him when what he wanted was a Megadrive.
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