30 years of "299" - how Sony turned the console market upside down

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"I would now like to invite the president of Sony Computer Entertainment, Steve Race, to make a short presentation", said Sony manager Ólafur Ólafsson on May 11, 1995, the first day of the E3 trade fair in Los Angeles. And Race's speech was to be short: He stepped up to the microphone, said "299" – and left. The audience erupted in cheers.

What had happened? Sony, which until then had not had much of a say in the world's largest games market, the USA, had just undercut its competitor Sega's price by a quarter. Just a few hours earlier, Sega had announced its new "Sega Saturn" console for 399 US dollars, with supposedly immediate availability. This was a major strategic mistake, as was to become clear. They wanted to beat Sony in "time-to-market" at all costs.

A long-prepared market launch

So without even being able to offer a console on the US market, Sony took the wind out of the sails of the earlier available device. Whether they already knew that the Saturn would be poorly available for months is no longer clear. But it is clear that Sony also announced the US market launch for September 9, 1995 in over 12,000 stores at the same press conference. The company had also prepared its large distribution network for audio and video electronics for the PlayStation. Until then, consoles had often been hidden away in the toy department of large retailers.

However, gamers had to be kept waiting for another four months to prevent them from buying the Saturn, which, apart from the price, was only possible because the console was already available and successful in Japan. As Ólafsson also said on May 11, almost one million Playstations and four million games had already been sold there since the launch on December 3, 1995. The console initially cost 35,820 yen, which was equivalent to over 400 US dollars in 1995. The devices were also in great demand internationally, with some fans paying several thousand Deutschmarks for an import to Germany, as our report on 30 years of Playstation shows. The device was not officially released in Europe until the end of September 1995.

1995 as a year of upheaval in the games industry

Sega was probably also guided by these 400 dollars and thus fell into Sony's trap: it is not necessarily an advantage to book the first date for a press conference at a trade fair if the competitor can counter immediately afterward. Incidentally, Nintendo didn't have much to announce at this E3, as their N64 was still in development and the already rather gray Super Nintendo (SNES) didn't stand a chance: the real battle for the fifth generation of games consoles was fought thirty years ago between Sega and Sony, even if 3DO and CD-i did play a brief role.

With this generation, 3D polygon graphics and optical storage media became an integral part of digital entertainment. Sound also improved in leaps and bounds because, among other things, real music tracks from CD could be played alongside the game. The games industry often took advantage of these innovations on consoles first, as Microsoft's universal multimedia API DirectX was not released for Windows 95 until September 1995. On PCs at that time, there was a confusion of manufacturer-specific drivers and APIs for 3D chips from companies such as 3dfx and S3 before – all disappeared long ago. And both a graphics card and a better sound card could easily cost as much as a complete PlayStation.

Not a one-off promotion

The comparatively low price for Sony's first console was not just a one-off emergency measure at the first "Electronic Entertainment Expo", E3, to undercut Sega. Just one year later, the price was lowered to 199 US dollars in the USA, which finally opened up the mass market. At the legendary press conference in 1995, Ólafur Ólafsson had already named "aggressive pricing" as a tool for conquering the market.

Steve Race's "299" clip has been circulating on YouTube for years in several versions, one of the most clicked being this one. In it, the campaign looks like a detached part, even like a press conference called especially for it. In reality, however, the announcement was part of a larger production that also explained the market environment and the technology of the Playstation. Fortunately, since 2017 there has been a kind of amateur documentary of the entire first E3 by the then games dealer Anthony Parisi, which also contains long excerpts from the press conferences of Sega and Sony. The relevant run-up to Steve Race's mic drop moment starts at 59:20 minutes.

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