larger library than the Saturn, although Sega hoped to generate interest with upcoming exclusives such as Nights into Dreams. An informal survey of retailers showed that the Saturn and PlayStation sold in roughly equal numbers during the first quarter of 1996. Within its first year, the PlayStation secured over 20% of the entire U.S. video game market. On the first day of the May 1996 E3 show, Sony announced a PlayStation price reduction to $199, a reaction to the release of the Model 2 Saturn in Japan at a price roughly equivalent to $199. On the second day, Sega announced it would match this price, though Saturn hardware was more expensive to manufacture. Changes at Sega Despite the launch of the PlayStation and Saturn, sales of 16-bit games and consoles continued to account for 64% of the video game market in 1995. Sega underestimated the continued popularity of the Genesis, and did not have the inventory to meet demand. Sega was able to capture 43% of the dollar share of the U.S. video game market and sell more than 2 million Genesis units in 1995, but Kalinske estimated that "we could have sold another 300,000 Genesis systems in the November/December timeframe." Nakayama's decision to focus on the Saturn over the Genesis, based on the systems' relative performance in Japan, has been cited as the major contributing factor in this miscalculation. Due to long-standing disagreements with Sega of Japan, Kalinske lost interest in his work as CEO of Sega of America. By early 1996, rumors were circulating that Kalinske planned to leave Sega, and a July 13 article in the press reported speculation that Sega of Japan was planning significant changes to Sega of America's management. On July 16, 1996, Sega announced that Kalinske would leave Sega after September 30, and that Shoichiro Irimajiri had been appointed chairman and CEO of Sega of America. A former Honda executive, Irimajiri had been involved with Sega of America since joining Sega in 1993. Sega also announced that David Rosen and Nakayama had resigned from their positions as chairman and co-chairman of Sega of America, though both remained with the company. Bernie Stolar, a former executive at Sony Computer Entertainment of America, was named Sega of America's executive vice president in charge of product development and third-party relations. Stolar, who had arranged a six-month PlayStation exclusivity deal for Mortal Kombat 3 and helped build