Sega had originally charged a licensing fee of eight to ten dollars per cartridge, but for EA, they lowered it to two to three dollars. The royalty rate was compressed to 24%.
EA could even independently control the release timing and sales volume of their games, completely free from Sega's review restrictions. This gamble allowed EA to reap massive profits during the 16-bit era, cementing its position as the hegemon of third-party software.
However, in this timeline, history shifted course after Takuya Nakayama took over Sega.
Takuya Nakayama knew the operating style of North American software companies all too well. During the development phase of the MD console, he carefully reviewed the hardware architecture blueprints and directly overturned the original unprotected design. He ordered the hardware engineering department to integrate a physical-level security lock chip onto the motherboard, regardless of the increased manufacturing cost.
This technology, known as TMSS, became an insurmountable technical barrier for EA.
Ironically, the core logic of this seemingly impenetrable defense system was not complex.
When a player inserted a cartridge into the console and powered it on, the console would read a segment of data from a specific address on the cartridge's ROM. If this data contained the characters "SEGA," the console's video output chip would activate, and a line of white text would appear on the screen: "PRODUCED BY OR UNDER LICENSE FROM SEGA ENTERPRISES LTD." Only then could the game boot normally. If a third party tried to bypass this mechanism by writing their own startup code, the console would cut the video signal, lock the screen, and crash to a black screen.
Even more brilliant was Takuya Nakayama's legal strategy. Sega's Legal Department had preemptively registered the trademark for that specific warning message with the United States Patent and Trademark Office. By deeply intertwining physical hardware verification with intellectual property law, this cross-disciplinary defense strategy demonstrated extraordinary commercial foresight.
When Hawkins' technical team attempted to reverse-engineer the Mega Drive in 1989, they discovered to their despair that while cracking the TMSS was technically feasible, the legal ramifications were insurmountable.
All they needed to do was write the characters "SEGA" into the corresponding address of their homebrew cartridges to fool the console's verification routine.
But doing so would force the screen to display the Sega-branded prompt upon startup.
Legally, this constituted a severe trademark infringement.
EA would be displaying Sega's registered trademark on its own products without authorization, effectively claiming to have Sega's permission.
This was blatant commercial fraud.
"Clean room design" could circumvent copyright law, but it couldn't bypass trademark law.
Sega wouldn't even need to prove that EA had copied their code. They could simply bring a videotape to court showing Sega's trademark appearing on EA's cartridges, and EA would face astronomical fines—or even a total product recall.
After receiving the technical team's report, Hawkins had no choice but to surrender in the face of this impenetrable defense.
The grand coup he had planned for the 1990 trade show was terminated before he even had a chance to rehearse.
Beyond the technical and legal blockade, Takuya Nakayama had also completely dismantled EA's bargaining chips on the market front.
Before the 16-bit console war even began, Sega had already won over a large number of veteran Japanese third-party developers like Namco, Konami, and Capcom by lowering royalty fees and granting them the right to manufacture their own cartridges.
The Mega Drive quickly broke Nintendo's restrictive royalty system upon its launch, leading a flood of third-party developers to create games for Sega. Although most of these titles were not exclusives, they still drastically expanded the Mega Drive's software library after its release.
The library featured everything from arcade ports and side-scrolling action games to RPGs.
Sega's market share in North America soared, meaning they had no reason to bow to EA over a few sports games.
Stripped of their leverage, EA had to follow the standard procedure.
Hawkins flew to Tokyo personally, sat in a conference room at Sega Headquarters, and signed a standard third-party licensing agreement.
Although Sega had granted the right to self-manufacture cartridges, the four-fold royalty discount was gone.
For every EA game sold on the Mega Drive, they had to pay Sega the full "toll."
On the main stage, Larry Probst's demonstration continued.
The PC version of Road Rash sped across the screen.
A biker swung a chain, smashing a rival rider and his bike into the guardrail.
Police cars wailed in pursuit, their sirens wailing as pixelated trees along the roadside blurred past. The roar of engines thundered through the high-fidelity sound system, vibrating through the exhibition hall and rattling the attendees' eardrums.
On screen, the character's movements were a bit stiff, but the high-resolution graphics made the colors vibrant and the edges smooth, eliminating the jagged pixelation of the Mega Drive console.
David paused his pen and observed the reactions of his fellow attendees.
The media section lacked the enthusiastic applause that had greeted the FIFA 97 demonstration earlier. The journalists' reactions were muted; many were whispering, exchanging opinions.
In the front row, an editor from a European gaming magazine, wearing a press vest, shook his head and complained to his companion.
"Isn't this just the same game from the Mega Drive five years ago? Other than the high-res SVGA textures, even the UI layout hasn't changed." He pointed to the red speedometer on the big screen. "Look at the font on that scoreboard—they just copied it over exactly. EA is barely putting any effort into reheating this old meal."
His companion pushed up his glasses, holding a voice recorder to capture the commentary from the stage.
"Your standards are too high," his companion retorted. "How many people on PC ever owned a Sega console? For users who never touched a computer before Windows 95, this is a brand-new racing game." He paused, pointing at the motorcycles speeding across the screen. "You have to admit, the graphics are a lot better. The Mega Drive's hardware was too limited to handle many cars on screen. Now, with a Pentium processor running this pseudo-3D, the smoothness is incredible. Look at the motion blur on the chain—so crisp."
The two argued in circles, neither able to convince the other.
David listened in on their conversation.
The media was divided on EA's decision to "rehash" the old title.
To say it was unchanged was unfair; the overall graphics and performance had indeed been improved to meet current PC hardware standards, running flawlessly on the latest Pentium chips. Yet, to say it was a new game was a stretch. Aside from a fresh coat of paint, the core gameplay, track design, and even the AI logic remained identical.
Even the trajectory of a bike flying through the air after a crash was exactly the same as it had been five years ago.
Paul leaned in closer to David, lowering his voice.
"This is a shrewd business move," Paul analyzed, circling a point on his notepad. "They take the old code, hire a few outsource artists to redraw the assets, and repackage it all onto a CD-ROM. The development cost is practically zero, yet they're selling it for sixty dollars a copy. As long as PC players buy in, the profit margins are astronomical. Releasing on PC means they don't have to answer to hardware manufacturers, and the cost of pressing the discs is less than a dollar."
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