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Japanese multinational video game and entertainment firm Sega Corporation[a] is based in Shinagawa, Tokyo. Its international divisions, Sega of America and Sega Europe, have their separate headquarters in Irvine, California, and London. Since 2020, Sega Games, the division for developing arcade and home video games, has operated in its current form; prior to that, Sega Games and Sega Interactive Co., Ltd. had been two independent companies. Sega Sammy Holdings is a parent company of Sega. Sega also created gaming systems between 1983 and 2001.
On June 3, 1960, American merchants Martin Bromley and Richard Stewart established Sega as Nihon Goraku Bussan[b]. Shortly after, the corporation bought the assets of its forerunner, Service Games of Japan. After purchasing Rosen Enterprises, an importer of coin-operated games, the business changed its name to Sega Enterprises, Ltd. five years later. In 1966, Sega created Periscope, its first coin-operated game. In 1969, Gulf and Western Industries purchased Sega. Sega started creating video game systems, starting with the SG-1000 and Master System, in response to a decline in the arcade industry in the early 1980s but struggled against rivals like the Nintendo Entertainment System. With support from CSK Corporation, Sega executives David Rosen and Hayao Nakayama oversaw a management buyout in 1984 In 1988, Sega released the Sega Genesis, also known as the Mega Drive outside of North America. The Genesis failed to compete in Japan, but after Sonic the Hedgehog was released in 1991, it was successful abroad and briefly outsold the Super Nintendo Entertainment System in the United States. Sega saw a number of commercial flops later in the decade, including the 32X, Saturn, and Dreamcast platforms. Sega discontinued making consoles in 2001 to focus on developing and publishing games for other companies. In 2004, Sammy Corporation purchased Sega. Since then, Sega has had increased financial success. In 2015, Sega Corporation changed its name to Sega Games Co., Ltd., and its arcade, entertainment, and toy divisions were divided into Sega Holdings Co. Ltd., and its toy, arcade, and entertainment sections split into other businesses. Sega Games and Sega Interactive combined to form Sega Corporation in 2020.
Sonic the Hedgehog, Total War, and Yakuza are just a few of the multi-million dollar game brands that Sega has created. The mascot of Sega, Sonic, is well-known all around the world. With series like Virtua Fighter and Initial D Arcade Stage, which have been around for a while, Sega is one of the most prolific arcade game producers in the world. Although these are mostly independent businesses, associated companies that run amusement arcades and provide other entertainment products, notably Sega Toys, use its name and trademark. Sega is well known for its video gaming consoles, inventiveness, and ingenuity. It has received criticism in more recent years for both the caliber of its artistic output and business actions.
In Honolulu, Hawaii, in May 1940, American businessmen Martin Bromley, Irving Bromberg, and James Humpert established Standard Games. Their goal was to supply military stations with coin-operated amusement devices, such as slot machines because the need for entertainment would increase as World War II got underway and more people would be stationed there. In 1946, the creators of Service Games—named for the military emphasis—were founded after selling Standard Games in 1945 In order to supply coin-operated slot machines to American bases in Japan after the United States government forbade slot machines in its territory in 1952, Bromley sent workers Richard Stewart and Ray LeMaire to Tokyo to start Service Games of Japan After a year, all five men created Service Games Panama to oversee the Service Games businesses.
The world’s games Over the following seven years, the business grew to encompass distribution in South Vietnam, the Philippines, and South Korea the Diamond Star slot machine was the first to bear the moniker Sega, which is an acronym for Service Games.
Service Games of Japan was disbanded on May 31, 1960, as a result of publicity brought on by US government inquiries into illegal business practices. Nihon Goraku Bussan and Nihon Kikai Seiz were two businesses that Bromley founded on June 3 to take over its business operations. All of Service Games of Japan’s assets were bought by the two new businesses. Sega, Inc., doing business as Kikai Seiz, specialized in the production of slot machines. Distributor and operator of coin-operated devices, including jukeboxes, Goraku Bussan operated under Stewart as Utamatic, Inc In 1964, the businesses amalgamated under the name Nihon Goraku Bussan.
A similar period saw the establishment of a photo booth business in Tokyo by David Rosen, a US Air Force officer stationed there In 1957, this business changed its name to Rosen Enterprises and started bringing coin-operated games into Japan. Sega Enterprises, Ltd. was created in 1965 after Nihon Goraku Bussan purchased Rosen Enterprises. LeMaire was appointed director of planning, Stewart was designated president, and Rosen was appointed CEO and managing director. Soon after, Sega ceased renting to military sites and switched its attention from slot machines to coin-operated amusement devices. It imported Rock-Ola jukeboxes, Williams’s pinball machines, and Midway Manufacturing gun games.
Sega started building new guns and flippers for its imported games since it imported used equipment that needed regular repair. Akira Nagai, a former Sega director, claims that as a result, the business started making its own games.The submarine simulator Periscope, which was made by Sega and published internationally in the late 1960s, was the company’s first electro-mechanical arcade game (EM game). It had cutting-edge light and sound effects and was popular in Japan. Then it was exported to shopping centers and department shops in Europe and the US, contributing to the establishment of the 25-cent-per-play price for arcade games there. Sega was taken aback by the success, and for the following two years, the business created and shipped eight to ten games annually The widespread popularity of Periscope contributed to a “technological renaissance” in the arcade market, which was revived by a flurry of “audio-visual” EM novelty games that appeared after Periscope in the late 1960s to early 1970s Sega, however, stopped exporting its games in 1970 due to widespread piracy.
Rosen remained CEO even after Sega was sold to the American firm Gulf and Western Industries in 1969. Sega Enterprises, Ltd., a division of an American business, was renamed Sega Enterprises, Inc. by Gulf & Western in 1974. In 1973, Sega released Pong-Tron, its first video game Although Taito’s popular arcade game Space Invaders provided late competition in 1978, Sega benefited from the late 1970s arcade video game boom, with earnings rising to over US$100 million by 1979. During this time, Hayao Nakayama’s coin-op distributor Esco Boueki and Gremlin Industries, which produced microprocessor-based arcade games, were both purchased by Sega Sega’s Japanese business and assigned Nakayama a management position. Among the top five arcade manufacturers in the early 1980s was Sega American-based game manufacturer which saw an increase in sales to $214 million. When Head On was released in 1979, it featured the “eat-the-dots” gameplay that Namco later adopted in Pac-Man Sega licensed Fogger, up to that point its most popular game, in 1981 Sega released Zaxxon, the first game featuring isometric visuals, 1982.
In September 1983, Gulf and Western sold its North American arcade game manufacturing organization and the license rights for its arcade games to Bally Manufacturing as a result of a decline in the arcade industry that had begun in 1982 Sega’s North American R&D division and its Japanese counterpart, Sega Enterprises, Ltd., were retained by Gulf and Western. Sega Enterprises, Ltd. president Nakayama said that the company should use its hardware knowledge to enter the Japanese home consumer market given the demise of its arcade business As a result, Sega created the SC-3000 computer. Sega created the SG-1000, its first home video game system, coupled with the SC-3000 after learning that Nintendo was creating a console that was only for video games, the Famicom. In numerous other markets throughout the world, the SG-1000 was released with different branding.
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The SG-1000 outperformed Sega’s initial forecast of 50,000 copies sold in 1983, selling 160,000, but the Famicom outsold it Sega was reluctant to work with firms that it was in direct competition within the arcades, but Nintendo aggressively courted third-party developers to increase their game catalog.
Rosen declared in November 1983 that he will leave his position as president of Sega Enterprises, Inc. on January 1, 1984. The appointment of Jeffrey Rochlis as Sega’s new president and COO was made public soon after the SG-1000 was introduced and Gulf and Western’s founder Charles Bluhdorn passed away, the corporation started to divest itself of its ancillary businesses. In 1984, Nakayama and Rosen secured funding from renowned Japanese software business CSK Corporation to organize a management buyout of the Japanese division a consortium of investors led by Rosen and Nakayama paid $38 million for the Japanese assets of Sega. As CEO of Sega Enterprises, Ltd., Nakayama replaced Isao Okawa, head of CSK, as chairman.
On the Mark III, a revamped SG-1000, Sega started working in 1985. In order to better suit Western preferences, Sega rebranded the Mark III as the Master System for North America October 1985 saw the introduction of the Mark III in Japan Although it had hardware that was in some ways more advanced than the Famicom’s, it was a failure when it first came out. Sega created their own games and acquired the rights to port titles created by other developers while Nintendo mandated that third-party developers refrain from releasing their Famicom games on other consoles Sega intended to advertise the Master System in North America by offering it for sale as a toy, much like Nintendo had done with the NDS. American Toy Company Tonka and Sega teamed up company, to utilize Tonka’s knowledge in the toy business.
Tonka’s ineffective marketing hindered the Master System’s sales by the beginning of 1992, and North American manufacture had ended. In the area, the Master System sold between 1.5 million and 2 million units Compared to Nintendo and Atari, which held 80% and 12% of the market share in North America, respectively, this market share was lower In Europe, where its sales were equivalent to the NES, the Master System eventually found success In Europe, there were 6.25 million active installed Master System users as of 1993 In Brazil, The Master System has continued to be successful. Sega’s regional partner Tectoy is still releasing new versions In Brazil, the Master System had 8 million unit sales by 2016.
Sega Europe, the company’s European arcade distribution subsidiary, was established in 1984 After signing a contract with Bally, it once again entered the North American arcade market in 1985 with the creation of Sega Enterprises USA. In the area, Hang-1985 On’s release would be a hit; in fact, Sega had trouble keeping up with the demand for the game. The most widely installed claw crane game in Japan as of 2005 was UFO Catcher, which was first released in 1985 to oversee the company’s consumer products in North America Sega of America was founded in 1986. The Master System was the first product it marketed While working with Tonka, Sega of America focused on customer service and some localization while giving up the console’s marketing and distribution with games. Out Run, which was released in 1986 ended up becoming Sega’s most popular arcade cabinet of the 1980s. According to former Sega director Akira Nagai, Hang-On and Out Run contributed to the arcade game market’s recovery from the 1982 recession and the emergence of new game genres.
At the end of the 1980s, Sega was one of the most well-known video game companies as the arcade game business began to expand once more. The firm concentrated on creating games for the arcades that would appeal to a variety of preferences, such as racing games and side-scrollers On October 29, 1988, Sega released the Mega Drive in Japan as the Master System’s replacement. Super Mario Bros. 3’s release by Nintendo a week prior overshadowed the event. Although Beep launched a new magazine specifically for the platform and Famitsu gave the console favorable attention, Sega only shipped 400,000 units in the first year.
More than two years before the Sega Saturn’s debut at the Tokyo Toy Show in June 1994, Sega started developing it as the Genesis’ replacement Scot Bayless, a former producer for Sega of America, claims that Nakayama was worried about the Atari Jaguar’s 1994 release and the Saturn’s 1995 release date. Nakayama made the decision to release a second console before the end of 1994 as a result. Sega started working on the 32X, an add-on for the Genesis that would act as a less expensive way to play 32-bit games The 32X could play Genesis games but was incompatible with the Saturn On November 21, 1994, Sega released the 32X in North America, and on December 3, 1994, in Less than half of the Saturn’s initial price was charged when it was sold in Japan and PAL regions in January 1995 Following the holidays, interest in the 32X fell down quickly.