119-410: Sega AM Research & Development No. 3 , known as Hitmaker Co., Ltd. from 2000 to 2004, is a defunct division of Sega , a Japanese video game company. Established by 1993, AM3 was managed by Hisao Oguchi and developed a number of arcade games for Sega. Series introduced by AM3 include Virtual On , Sega Rally , Crazy Taxi , and Virtua Tennis . AM3's main focus was on arcade games until
238-546: A video game console . AM3 had a fondness for using the Model 2 arcade system board , which was used on Last Bronx and Top Skater even though the former released just a few weeks before AM2 's Virtua Fighter 3 on the Model 3. Top Skater was released afterward with a deliberate selection of the Model 2. Of the newer hardware, Oguchi stated that AM3 would work with it, and that he anticipated it would eventually reduce in cost much as
357-651: A $ 1 billion stock swap whereby Sega would wholly acquire Bandai, was set to form a company known as Sega Bandai, Ltd. Though it was to be finalized in October of that year, it was called off in May after growing opposition from Bandai's mid-level executives. Bandai instead agreed to a business alliance with Sega. As a result of Sega's deteriorating financial situation, Nakayama resigned as Sega president in January 1998 in favor of Irimajiri. Nakayama's resignation may have in part been due to
476-570: A 92% replay rate. While the eight-player Japanese version of the game was released in 1999, the game was reduced to a smaller four-player version due to size issues and released in North America in 2003. The cabinet was too expensive and the game did not entice casual users which are essential to the western arcade market. While the Japanese market retained core players, western arcades had become more focused on casual players, and Sega Amusements Europe,
595-650: A Dreamcast launch game . It was promoted with a large-scale public demonstration at the Tokyo Kokusai Forum Hall . Due to a high failure rate in the manufacturing process, Sega could not ship enough consoles for the Dreamcast's Japanese launch. As more than half of its limited stock had been pre-ordered, Sega stopped pre-orders in Japan. Before the launch, Sega announced the release of its New Arcade Operation Machine Idea (NAOMI) arcade system board , which served as
714-459: A cheaper alternative to the Sega Model 3 . NAOMI shared technology with the Dreamcast, allowing nearly identical ports of arcade games. The Dreamcast launched in Japan on November 27, 1998. The entire stock of 150,000 consoles sold out by the end of the day. Irimajiri estimated that another 200,000 to 300,000 Dreamcast units could have been sold with sufficient supply. He hoped to sell more than
833-602: A computer, the SC-3000. Learning that Nintendo was developing a games-only console , the Famicom , Sega developed its first home video game system, the SG-1000 , alongside the SC-3000. Rebranded versions of the SG-1000 were released in several other markets worldwide. The SG-1000 sold 160,000 units in 1983, which far exceeded Sega's projection of 50,000 in the first year but was outpaced by
952-487: A decrease in profitability due to the investments required to launch the Dreamcast in Western markets and poor software sales in Japan. At the same time, worsening conditions reduced the profitability of Sega's Japanese arcade business, prompting the closure of 246 locations. Moore became the president and chief operating officer of Sega of America on 8 May 2000. He said the Dreamcast would need to sell 5 million units in
1071-424: A desire to move forward with network gaming and work on new concepts with his staff of 128 employees. The company's official name was Hitmaker Co., Ltd. Into 2001, Hitmaker continued to release arcade and Dreamcast games, including Cyber Troopers Virtual-On Force , Confidential Mission , and Segagaga . Even with these positive releases, Hitmaker was not reaching the level of success they had before. Although in
1190-656: A downturn in the arcade business in the early 1980s, Sega began to develop video game consoles, starting with the SG-1000 and Master System , but struggled against competitors such as the Nintendo Entertainment System . In 1984, Sega executives David Rosen and Hayao Nakayama led a management buyout , with backing from CSK Corporation . In 1988, Sega released the Mega Drive , or the Genesis in North America. The Mega Drive struggled against competition in Japan, but
1309-508: A former executive at Sony Computer Entertainment of America, became Sega of America's executive vice president in charge of product development and third-party relations. Stolar was not supportive of the Saturn, believing its hardware was poorly designed. While Stolar had said "the Saturn is not our future" at E3 1997, he continued to emphasize the quality of its games, and later reflected that "we tried to wind it down as cleanly as we could for
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#17328518028471428-597: A four-point plan: cut the price of the Genesis, create a US team to develop games targeted at the American market, expand the aggressive advertising campaigns, and replace the bundled game Altered Beast with Sonic the Hedgehog . The Japanese board of directors disapproved, but it was approved by Nakayama, who told Kalinske, "I hired you to make the decisions for Europe and the Americas, so go ahead and do it." In large part due to
1547-420: A million Dreamcast units in Japan by February 1999, but less than 900,000 were sold. The low sales undermined Sega's attempts to build up a sufficient installed base to ensure the Dreamcast's survival after the arrival of competition from other manufacturers. Sega suffered a further ¥42.881 billion consolidated net loss in the fiscal year ending March 1999, and announced plans to eliminate 1,000 jobs, nearly
1666-425: A new wave of tennis video games and became one of the Dreamcast's best sellers. Derby Owners Club proved to be highly influential as an arcade game with physical card features. Sega restructured its arcade and console development teams into nine semi-autonomous studios headed by the company's top designers in 2000. Oguchi chose to name his new company Hitmaker, as "the perfect translation of our image". He expressed
1785-435: A popular form of entertainment among youths across East Asia , laying the foundations for modern selfie culture. By 1997, about 47,000 Purikura machines had been sold, earning Sega an estimated ¥25 billion ( £173 million ) or $ 283,000,000 (equivalent to $ 537,000,000 in 2023) from Purikura sales that year. Various other similar Purikura machines appeared from other manufacturers, with Sega controlling about half of
1904-521: A press release confirming it was considering producing software for the PlayStation 2 and Game Boy Advance as part of its "new management policy". On January 31, 2001, Sega announced the discontinuation of the Dreamcast after March 31 and the restructuring of the company as a "platform-agnostic" third-party developer. Sega also announced a Dreamcast price reduction to eliminate its unsold inventory, estimated at 930,000 units as of April 2001. This
2023-550: A quarter of its workforce. Before the Western launch, Sega reduced the price of the Dreamcast in Japan by JP¥9,100, effectively making it unprofitable but increasing sales. On August 11, 1999, Sega of America confirmed that Stolar had been fired. Peter Moore , whom Stolar had hired as a Sega of America executive only six months before, was placed in charge of the North American launch. The Dreamcast launched in North America on September 9, 1999, with 18 games. Sega set
2142-453: A record by selling more than 225,132 Dreamcast units in 24 hours, earning $ 98.4 million in what Moore called "the biggest 24 hours in entertainment retail history". Within two weeks, US Dreamcast sales exceeded 500,000. By Christmas, Sega held 31 percent of the US video game market by revenue. On November 4, Sega announced it had sold more than a million Dreamcast units. Nevertheless, the launch
2261-605: A second, faster processor, vastly expanded system memory, a graphics chip that performed scaling and rotation similar to the company's arcade games, and another sound chip. In North America, it was renamed the Sega CD and launched on October 15, 1992, with a retail price of US$ 299. It was released in Europe as the Mega-CD in 1993. The Mega-CD sold only 100,000 units during its first year in Japan, falling well below expectations. Throughout
2380-472: A slight increase in the fiscal year ended March 1997, partly driven by increasing arcade revenue, while outperforming Nintendo during the mid-term period. However, in the fiscal year ending March 1998, Sega suffered its first financial loss since its 1988 listing on the Tokyo Stock Exchange as both a parent company and a corporation as a whole. In the company's 1998 year end report, Irimajiri placed
2499-480: A strong reputation with consumers and within the industry. Sega Rosso , previously Sega AM5, was a video game development studio headed by Kenji Sasaki, who had served as a designer on Sega Rally Championship . In 1996, producer Tetsuya Mizuguchi met with Hisashi Suzuki, the manager of the R&;D division. He and Mizuguchi agreed to create a new department separate from AM3 that would be called AM Annex. Mizuguchi selected
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#17328518028472618-572: Is a Japanese multinational video game company and subsidiary of Sega Sammy Holdings headquartered in Shinagawa , Tokyo . It produces several multi-million-selling game franchises for arcades and consoles , including Sonic the Hedgehog , Angry Birds , Phantasy Star , Puyo Puyo , Super Monkey Ball , Total War , Virtua Fighter , Megami Tensei , Sakura Wars , Persona , and Yakuza . From 1983 until 2001, Sega also developed its own consoles . Having American origins, Sega
2737-472: Is one of the world's most prolific arcade game producers and its mascot, Sonic , is internationally recognized. Its name and branding are used for owned or affiliated companies that operate amusement arcades and produce other entertainment products, including Sega Fave; however, these are largely separate ventures. Sega is recognized for its video game consoles, creativity and innovations. In more recent years, it has been criticized for its business decisions and
2856-747: Is the world's most prolific arcade game producer, having developed more than 500 games , 70 franchises , and 20 arcade system boards since 1981. It has been recognized by Guinness World Records for this achievement. The following list comprises the various arcade system boards developed and used by Sega in their arcade games. Before Lindbergh, Sega arcade hardware was either proprietary or built on gaming console architecture . Nowadays, arcade hardware closely resembles gaming PCs, with recent models even incorporating embedded versions of Microsoft Windows. Sega has developed and released additional arcade games that use technology other than their dedicated arcade system boards. The first arcade game manufactured by Sega
2975-458: The Famicom and lagged behind Nintendo's Super Famicom and the TurboGrafx-16 , made by NEC , in Japanese sales throughout the 16-bit era . For the North American launch, where the console was renamed Genesis, Sega had no sales and marketing organization. After Atari declined an offer to market the console in the region, Sega launched it through its own Sega of America subsidiary. The Genesis
3094-666: The Ryu Ga Gotoku Studio and Sonic Team brands for several core franchise entries), Sega Sapporo Studio which mainly provides support for the Tokyo-based development teams as well as handling partial game development, and Atlus (including their R&D divisions, such as P-Studio and Studio Zero respectively) and five development studios in the UK and Europe: Creative Assembly , Sports Interactive , Sega Hardlight , Two Point Studios , and Rovio Entertainment (including Ruby Games). Sega
3213-604: The "Sega!" scream, and holding press events for the education industry. Sega partnered with GE to develop the Sega Model 2 arcade system board, building on 3D technology in the arcade industry at the time. This led to several successful arcade games, including Daytona USA , launched in a limited capacity in late 1993 and worldwide in 1994. Other popular games included Virtua Cop , Sega Rally Championship , and Virtua Fighter 2 . Virtua Fighter and Virtua Fighter 2 became Sega's best-selling arcade games of all time, surpassing their previous record holder Out Run . There
3332-519: The "cool" blue color of Sega, and he liked the combination of Sega with the Italian word for red. Sega Rosso's next games were NASCAR Arcade and Cosmic Smash . Sasaki expressed a desire to work on both arcade and Dreamcast games, as the arcade industry was struggling. Sega Rosso would also work on the Initial D Arcade Stage series before being merged with Hitmaker in 2003. Sega Sega Corporation
3451-445: The 1980s. Former Sega director Akira Nagai said Hang-On and Out Run helped to pull the arcade game market out of the 1982 downturn and created new genres of video games. With the arcade game market once again growing, Sega was one of the most recognized game brands at the end of the 1980s. In the arcades, the company focused on releasing games to appeal to diverse tastes, including racing games and side-scrollers . Sega released
3570-462: The 1994 release of the Atari Jaguar , and that the Saturn would not be available until the next year. As a result, Nakayama decided to have a second console release to market by the end of 1994. Sega began to develop the 32X , a Genesis add-on which would serve as a less expensive entry into the 32-bit era . The 32X would not be compatible with the Saturn, but would play Genesis games. Sega released
3689-463: The 32X on November 21, 1994, in North America, December 3, 1994, in Japan, and January 1995 in PAL territories, and was sold at less than half of the Saturn's launch price. After the holiday season, interest in the 32X rapidly declined. Sega released the Saturn in Japan on November 22, 1994. Virtua Fighter , a port of the popular arcade game, sold at a nearly one-to-one ratio with the Saturn at launch and
Sega AM3 - Misplaced Pages Continue
3808-600: The 3rd , Case Closed , and Anpanman & Marza Animation Planet , which specializes in CG animation. In May 1940, American businessmen Martin Bromley, Irving Bromberg and James Humpert formed Standard Games in Honolulu , Hawaii. Their aim was to provide coin-operated amusement machines , including slot machines , to military bases as the increase in personnel with the onset of World War II would create demand for entertainment. After
3927-515: The AM8 designation went to Sonic Team. As the smallest AM department with a staff between 40 and 50 employees, most of Sasaki's staff came from Namco , where Sasaki himself had a role in the development of the Ridge Racer series. AM5 developed Star Wars: Racer Arcade and released it by July 2000. When the studios were separated from Sega, Sasaki chose the name "Sega Rosso" to have a "hotter" image than
4046-623: The CEO and managing director, while Stewart was named president and LeMaire was the director of planning. Shortly afterward, Sega stopped leasing to military bases and moved its focus from slot machines to coin-operated amusement machines. Its imports included Rock-Ola jukeboxes, pinball games by Williams , and gun games by Midway Manufacturing . Because Sega imported second-hand machines, which required frequent maintenance, it began constructing replacement guns and flippers for its imported games. According to former Sega director Akira Nagai, this led to
4165-449: The Dreamcast as much as expected, as many disappointed consumers continued to wait or purchased a PSone . Eventually, Sony and Nintendo held 50 and 35 percent of the US video game market, while Sega held only 15 percent. CSK chairman Isao Okawa replaced Irimajiri as president of Sega on May 22, 2000. Okawa had long advocated that Sega abandon the console business. Others shared this view; Sega co-founder David Rosen had "always felt it
4284-467: The Famicom. This was in part because Nintendo expanded its game library by courting third-party developers , whereas Sega was hesitant to collaborate with companies with which it was competing in the arcades. In November 1983, Rosen announced his intention to step down as president of Sega Enterprises, Inc. on January 1, 1984. Jeffrey Rochlis was announced as the new president and CEO of Sega. Shortly after
4403-508: The Genesis found success overseas after the release of Sonic the Hedgehog in 1991 and briefly outsold its main competitor, the Super Nintendo Entertainment System , in the US. In 2001, after several commercial failures such as the 32X , Saturn , and Dreamcast , Sega stopped manufacturing consoles to become a third-party developer and publisher, and was acquired by Sammy Corporation in 2004. Sega Holdings Co. Ltd.
4522-529: The Japanese arcade scene. All of which were made by Hitmaker and used magnetic cards. Hitmaker was one of the few profitable studios for Sega, which gave Oguchi the opportunity to expand beyond videogames and invest into the darts business. Owing to his work on medal and card related arcade games, Oguchi was promoted within Sega. Oguchi departed Hitmaker in 2003 to become president of Sega. As part of Oguchi's studio consolidation plan with Sega, Sasaki's Sega Rosso studio
4641-638: The Master System and featured a full-color screen, in contrast to the monochrome Game Boy screen. Due to its short battery life, lack of original games, and weak support from Sega, the Game Gear did not surpass the Game Boy, having sold approximately 11 million units. Sega launched the Mega-CD in Japan on December 1, 1991, initially retailing at JP¥ 49,800. The add-on uses CD-ROM technology. Further features include
4760-430: The Master System's successor, the Mega Drive , in Japan on October 29, 1988. The launch was overshadowed by Nintendo's release of Super Mario Bros. 3 a week earlier. Positive coverage from magazines Famitsu and Beep! helped establish a following, with the latter launching a new publication dedicated to the console, but Sega shipped only 400,000 units in the first year. The Mega Drive struggled to compete against
4879-557: The Model 2 had already. Next Generation praised Last Bronx though comparing it to Virtua Fighter 3 , stating it showed how AM3 had a "refusal to take a back seat to AM2 or any other R&D department". In 1999, AM3 released Top Skater developer Kenji Kanno's Crazy Taxi for the NAOMI system board. It quickly became a staple game at a number of arcades and received a Dreamcast port, with more than one million copies sold. Another arcade and home release, Virtua Tennis , helped to start
Sega AM3 - Misplaced Pages Continue
4998-580: The Nihon Goraku Bussan name. Around the same time, David Rosen , an American officer in the United States Air Force stationed in Japan, launched a photo booth business in Tokyo in 1954. This company became Rosen Enterprises, and in 1957 began importing coin-operated games into Japan. In 1965, Nihon Goraku Bussan acquired Rosen Enterprises to form Sega Enterprises, Ltd. Rosen was installed as
5117-462: The North American home console market without Sega games for over a year, with most of its activity in the country coming from arcade divisions. The Saturn lasted longer in some Europe territories and particularly Japan, with it notably outperforming the Nintendo 64 in the latter. Nonetheless, Irimajiri confirmed in an interview with Japanese newspaper Daily Yomiuri that Saturn development would stop at
5236-509: The SNES at release. Nintendo's dollar share of the US 16-bit market dropped from 60% at the end of 1992 to 37% at the end of 1993, Sega claimed 55% of all 16-bit hardware sales during 1994, and the SNES outsold the Genesis from 1995 through 1997. In 1990, Sega launched the Game Gear , a handheld console , to compete against Nintendo's Game Boy . The Game Gear was designed as a portable version of
5355-587: The Saturn an advantage over the PlayStation. At the first Electronic Entertainment Expo (E3) in Los Angeles on May 11, 1995, Kalinske revealed the release price and that Sega had shipped 30,000 Saturns to Toys "R" Us , Babbage's , Electronics Boutique , and Software Etc. for immediate release. A by-product of the surprise launch was the provocation of retailers not included in Sega's rollout; KB Toys in particular decided to no longer stock its products in response. The Saturn's release in Europe also came before
5474-470: The Sega Enterprises name used in Japan as well as transitioning to the Sega name used globally. Sega stated in a release that this was to display its commitment to its "network entertainment business". On January 23, 2001, Japanese newspaper Nihon Keizai Shinbun reported that Sega would cease production of the Dreamcast and develop software for other platforms. After an initial denial, Sega released
5593-420: The US by the end of 2000 to remain viable, but Sega fell short of this goal with some 3 million units sold. Moreover, Sega's attempts to spur Dreamcast sales through lower prices and cash rebates caused escalating financial losses. In March 2001, Sega posted a consolidated net loss of ¥51.7 billion ($ 417.5 million). While the PlayStation 2's October 26 US launch was marred by shortages, this did not benefit
5712-482: The US. Sega was surprised by the success, and for the next two years, the company produced and exported between eight and ten games per year. The worldwide success of Periscope led to a "technological renaissance" in the arcade industry, which was reinvigorated by a wave of "audio-visual" EM novelty games that followed in the wake of Periscope during the late 1960s to early 1970s. However, rampant piracy led Sega to cease exporting its games around 1970. In 1969, Sega
5831-590: The United States, as company revenues rose to $ 214 million. 1979 saw the release of Head On , which introduced the "eat-the-dots" gameplay Namco later used in Pac-Man . In 1981, Sega licensed Frogger , its most successful game until then. In 1982, Sega introduced the first game with isometric graphics , Zaxxon . Following a downturn in the arcade business starting in 1982, Gulf and Western sold its North American arcade game manufacturing organization and
5950-647: The Xbox. As part of the restructuring, nearly one third of Sega's Tokyo workforce was laid off in 2001. 2002 was Sega's fifth consecutive fiscal year of net losses. After Okawa's death, Hideki Sato, a 30-year Sega veteran who had worked on Sega's consoles, became the company president. Following poor sales in 2002, Sega cut its profit forecast for 2003 by 90 percent, and explored opportunities for mergers. In 2003, Sega began talks with Sammy Corporation –a pachinko and pachislot manufacturing company–and Namco. The president of Sammy, Hajime Satomi , had been mentored by Okawa and
6069-405: The arcade market Hitmaker built upon the success of Derby Owners Club , with World Club Champion Football and The Key of Avalon which also used physical card features. In 2006, Japanese arcades made record profits based on these type of arcade games. World Club Champion Football has sold 850 million player cards, as of 2016, making it the bestselling arcade digital collectible card game . Sega
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#17328518028476188-475: The blame for these losses on the failure to transition from the Genesis to the Saturn in North America and Sega Enterprises covering the debts of Sega of America. Shortly before the announcement of the losses, Sega discontinued the Saturn in North America to prepare for the launch of its successor, the Dreamcast , releasing remaining games in low quantities. The decision to discontinue the Saturn effectively left
6307-430: The company developing its own games. The first arcade electro-mechanical game (EM game) Sega manufactured was the submarine simulator Periscope , released worldwide in the late 1960s. It featured light and sound effects considered innovative and was successful in Japan. It was then exported to malls and department stores in Europe and the United States and helped standardize the 25-cent-per-play cost for arcade games in
6426-432: The company into developing their own games. Sega released Pong-Tron , its first video-based game, in 1973. The company prospered from the arcade game boom of the late 1970s, with revenues climbing to over US$ 100 million by 1979. Nagai has stated that Hang-On and Out Run helped to pull the arcade game market out of the 1983 downturn and created new genres of video games. In terms of arcades, Sega
6545-429: The company survive the third-party transition. He held failed talks with Microsoft about a sale or merger with their Xbox division. According to former Microsoft executive Joachim Kempin , Microsoft founder, Bill Gates , decided against acquiring Sega because "he didn't think that Sega had enough muscle to eventually stop Sony". A business alliance with Microsoft was announced whereby Sega would develop 11 games for
6664-601: The company's console, mobile and PC games on a year-to-year basis until the fiscal year of 2014. In order to drive growth in western markets, Sega announced new leadership for Sega of America and Sega Europe in 2005. Simon Jeffery became president and COO of Sega of America, and Mike Hayes president and COO for Sega Europe. In 2009, Hayes became president of the combined outfit of both Sega of America and Sega Europe, due to Jeffery leaving. Sega sold Visual Concepts to Take-Two Interactive , and purchased UK-based developer Creative Assembly , known for its Total War series . In
6783-600: The consolidation, Hitmaker absorbed Sega Rosso, which worked on the Sega Rally and Initial D Arcade Stage series. Then, in 2004, Sega reintegrated all of its studios into the company, with Hitmaker shutting down its website on July 1. The AM3 designation continued within Sega until April 2009, when the studio was integrated into other departments. According to IGN 's Travis Fahs, AM3 was one of Sega's top arcade studios but received little recognition in comparison to AM2. Rob Fahey of Gamesindustry.biz stated that Hitmaker had
6902-494: The consumer." At Sony, Stolar had opposed the localization of certain Japanese PlayStation games that he felt would not represent the system well in North America. He advocated a similar policy for the Saturn, generally blocking 2D arcade games and role-playing games from release, although he later sought to distance himself from this stance. Other changes included a softer image in Sega's advertising, including removing
7021-790: The continued popularity of the Genesis; 16-bit sales accounted for 64 percent of the market in 1995. Despite capturing 43 percent of the US market dollar share and selling more than 2 million Genesis units in 1995, Kalinske estimated that, if prepared for demand, another 300,000 could have been sold. Sega announced that Shoichiro Irimajiri had been appointed chairman and CEO of Sega of America in July 1996, while Kalinske left Sega after September 30 of that year. A former Honda executive, Irimajiri had been involved with Sega of America since joining Sega in 1993. The company also announced that Rosen and Nakayama had resigned from their positions at Sega of America, though both remained with Sega. Bernie Stolar ,
7140-477: The culture at AM3 was that he would not reject or interfere with ideas, although he would make suggestions. He likened the environment to a university laboratory and called it "the AM3 way". Oguchi also addressed AM3's lack of a genre of game in which they specialized, stating that his department's primary objective was to create games that "look interesting", which also meant a focus on arcade games that one would not find on
7259-624: The darts business. Hitmaker was involved in the establishment of DARTSLIVE Co., Ltd. which produces electronic darts machines, and a darts bar called Bee was opened in Shibuya in 2002. In 2003, Oguchi was promoted to president of Sega when Hideki Sato stepped down. At the time, Sega had recently announced its first profit in five years. Virtua Tennis producer Mie Kumagai replaced Oguchi as president of Hitmaker, becoming Sega's first female studio head. Oguchi announced his intention to consolidate Sega's studios into "four or five core operations". As part of
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#17328518028477378-408: The decline of the global arcade industry in the late 1990s, Sega created several novel concepts tailored to the Japanese market. Derby Owners Club was an arcade machine with memory cards for data storage, designed to take over half an hour to complete and costing JP¥500 to play. Testing of Derby Owners Club in a Chicago arcade showed that it had become the most popular machine at the location, with
7497-403: The early 1990s, Sega largely continued its success in arcades around the world. In 1992 and 1993, the new Sega Model 1 arcade system board showcased in-house development studio Sega AM2 's Virtua Racing and Virtua Fighter (the first 3D fighting game ), which, though expensive, played a crucial role in popularizing 3D polygonal graphics. In addition, complex simulator equipment like
7616-609: The end of 1998 and games would continue to be produced until mid-1999. With lifetime sales of 9.26 million units, the Saturn is retrospectively considered a commercial failure in much of the world. While Sega had success with the Model 3 arcade board and titles like Virtua Fighter 3 , Sega's arcade divisions struggled in the West during the late 1990s. On the other hand, Sega's arcade divisions were more successful in Asia, with Sega's overall arcade revenues increasing year-on-year throughout
7735-479: The end of 1999 —began to decline as early as January 2000. Poor Japanese sales contributed to Sega's ¥42.88 billion ($ 404 million) consolidated net loss in the fiscal year ending March 2000. This followed a similar loss of ¥42.881 billion the previous year and marked Sega's third consecutive annual loss. Sega's overall sales for the term increased 27.4 percent, and Dreamcast sales in North America and Europe greatly exceeded its expectations. However, this coincided with
7854-569: The entities of Service Games worldwide. The company expanded over the next seven years to include distribution in South Korea , the Philippines , and South Vietnam . The name Sega, an abbreviation of Service Games, was first used in 1954 on a slot machine, the Diamond Star. Due to notoriety arising from investigations by the US government into criminal business practices, Service Games of Japan
7973-724: The entity created to officially distribute and manufacture Sega's machines on the continent after the consolidation of its regional divisions, subsequently decided to develop more games locally that were better suited to western tastes. In 2005, the GameWorks chain of arcades came under the sole ownership of Sega, which previously was shared with Vivendi Universal , and remained under their ownership until 2011. In 2009, Sega Republic , an indoor theme park, opened in Dubai . Sega gradually reduced its arcade centers from 450 in 2005 to around 200 in 2015. Arcade machine sales incurred higher profits than
8092-543: The failure of the merger, as well as Sega's 1997 performance. Stolar became CEO and president of Sega of America. After the launch of the Nintendo 64 in the US during 1996, sales of the Saturn and its games fell sharply in much of the west. The PlayStation outsold the Saturn three-to-one in the US in 1997, and the latter failed to gain a foothold in Europe and Australia, where the Nintendo 64 would not release until March 1997. After several years of declining profits, Sega had
8211-532: The family-friendly GA rating to the more mature rating of MA-13, and the adults-only rating of MA-17. Executive vice president of Nintendo of America Howard Lincoln was quick to point out in the United States congressional hearings in 1993 that Night Trap was not rated at all. Senator Joe Lieberman called for another hearing in February 1994 to check progress toward a rating system for video game violence. After
8330-512: The game. UFO Catcher was introduced in 1985 and as of 2005 was Japan's most commonly installed claw crane game. In 1986, Sega of America was established to manage the company's consumer products in North America, beginning with marketing the Master System. During Sega's partnership with Tonka, Sega of America relinquished marketing and distribution of the console and focused on customer support and some localization of games. Out Run , released in 1986, became Sega's best selling arcade cabinet of
8449-688: The hearings, Sega proposed the universal adoption of the VRC; after objections by Nintendo and others, Sega took a role in forming the Entertainment Software Rating Board . Sega began work on the Genesis' successor, the Sega Saturn , more than two years before showcasing it at the Tokyo Toy Show in June 1994. According to former Sega of America producer Scot Bayless, Nakayama became concerned about
8568-459: The high-profile urban areas of Roppongi and Ikebukuro . In 1993, this success was mirrored in overseas territories with the openings of several large branded entertainment centers, such as Sega VirtuaLand in Luxor Las Vegas . In 1994, Sega generated a revenue of ¥354.032 billion or $ 3,464,000,000 (equivalent to $ 7,121,000,000 in 2023). In 1993, the American media began to focus on
8687-403: The initial team himself, a team of six or seven people that would later grow in number. The first game AM Annex began to develop was Sega Touring Car Championship on the Model 2 arcade board. AM Annex later received the AM8 designation and developed Sega Rally 2 and Star Wars Trilogy Arcade on Sega's Model 3 board. According to Hisao Oguchi, Mizuguchi and Sasaki had departed AM3 with
8806-481: The late 1970s, with revenues climbing to over US$ 100 million by 1979. During this period, Sega acquired Gremlin Industries , which manufactured microprocessor -based arcade games, and Esco Boueki, a coin-op distributor founded and owned by Hayao Nakayama . Nakayama was placed in a management role of Sega's Japanese operations. In the early 1980s, Sega was one of the top five arcade game manufacturers active in
8925-427: The late 1990s, but it was not enough to offset the significant declining revenues of Sega's home consumer divisions. Despite a 75 percent drop in half-year profits just before the Japanese launch of the Dreamcast, Sega felt confident about its new system. The Dreamcast attracted significant interest and drew many pre-orders. Sega announced that Sonic Adventure , the first major 3D Sonic the Hedgehog game, would be
9044-518: The launch of the Genesis, Sega sought a new flagship line of releases to compete with Nintendo's Mario series. Its new character, Sonic the Hedgehog , went on to feature in one of the best-selling video game franchises in history. Sonic the Hedgehog began with a tech demo created by Yuji Naka involving a fast-moving character rolling in a ball through a winding tube; this was fleshed out with Naoto Ohshima 's character design and levels conceived by designer Hirokazu Yasuhara . Sonic's color
9163-478: The launch of the SG-1000, and the death of company founder Charles Bluhdorn , Gulf and Western began to sell off its secondary businesses. Nakayama and Rosen arranged a management buyout of the Japanese subsidiary in 1984 with financial backing from CSK Corporation , a prominent Japanese software company. Sega's Japanese assets were purchased for $ 38 million by a group of investors led by Rosen and Nakayama. Isao Okawa , head of CSK, became chairman, while Nakayama
9282-478: The licensing rights for its arcade games to Bally Manufacturing in September 1983. Gulf and Western retained Sega's North American R&D operation and its Japanese subsidiary, Sega Enterprises, Ltd. With its arcade business in decline, Sega Enterprises, Ltd. president Nakayama advocated for the company to use its hardware expertise to move into the home consumer market in Japan. This led to Sega's development of
9401-482: The market in 1997. Sega also made forays in the PC market with the 1995 establishment of SegaSoft , which was tasked with creating original Saturn and PC games. From 1994 to 1999, Sega also participated in the arcade pinball market when it took over Data East 's pinball division, renaming it Sega Pinball. In January 1997, Sega announced its intentions to merge with the Japanese toy maker Bandai . The merger, planned as
9520-498: The mature content of certain video games, such as Night Trap for the Sega CD and the Genesis version of Midway's Mortal Kombat . This came at a time when Sega was capitalizing on its image as an "edgy" company with "attitude", and this reinforced that image. To handle this, Sega instituted the United States' first video game ratings system, the Videogame Rating Council (VRC), for all its systems. Ratings ranged from
9639-453: The merger went ahead as both companies were facing difficulties. Satomi said Sega had been operating at a loss for nearly ten years, while Sammy feared stagnation and over-reliance of its highly profitable pachislot and pachinko machine business and wanted to diversify. Sammy acquired the remaining percentages of Sega, completing a takeover . The stock swap deal valued Sega between $ 1.45 billion and $ 1.8 billion. Sega Sammy Holdings
9758-543: The more arcade-like experience available on the Genesis, with slogans including "Genesis does what Nintendon't". Since Nintendo owned the console rights to most arcade games of the time, the second part involved creating a library of games which used the names and likenesses of celebrities, such as Michael Jackson's Moonwalker and Joe Montana Football . Nonetheless, Sega had difficulty overcoming Nintendo's ubiquity in homes. Sega of America sold only 500,000 Genesis units in its first year, half of Nakayama's goal. After
9877-440: The next four years, AM3 continued to develop new games, such as Sega Rally Championship , Gunblade NY , Manx TT Super Bike , Virtual On: Cyber Troopers , Last Bronx , and Top Skater . In 1995, Sega Rally was described by Next Generation as being potentially superior to the well reviewed Daytona USA . The same magazine described AM3 as a "fledgling" studio, being Sega's newest arcade development department at
9996-580: The overall market share in North America at the end of 1999. On March 2, 1999, in what one report called a "highly publicized, vaporware -like announcement", Sony revealed the first details of the PlayStation 2 . The same year, Nintendo announced that its next console would meet or exceed anything on the market, and Microsoft began development of its own console, the Xbox . Sega's initial momentum proved fleeting as US Dreamcast sales—which exceeded 1.5 million by
10115-419: The popularity of Sonic the Hedgehog , the Genesis outsold its main competitor, the Super Nintendo Entertainment System (SNES), in the United States nearly two to one during the 1991 holiday season. By January 1992, Sega controlled 65 percent of the 16-bit console market. Sega outsold Nintendo for four consecutive Christmas seasons due to the Genesis' head start, lower price, and a larger library compared to
10234-441: The previously announced North American date, on July 8, 1995. Within two days of the PlayStation's American launch on September 9, 1995, the PlayStation sold more units than the Saturn. Within its first year, the PlayStation secured over twenty percent of the US video game market. The console's high price point, surprise launch, and difficulty handling polygonal graphics were factors in its lack of success. Sega also underestimated
10353-483: The quality of its creative output. Being the entertainment contents division of Sega Sammy Holdings, forming one half of the Sega Sammy Group, Sega also owns a toy and amusement machine company, Sega Fave , which comprises their arcade development and manufacturing divisions that were previously under Sega and two animation studios: TMS Entertainment , which animates, produces, and distributes anime such as Lupin
10472-497: The region, Tectoy . By 2016, the Master System had sold 8 million units in Brazil. During 1984, Sega opened its European division of arcade distribution, Sega Europe. It re-entered the North American arcade market in 1985 with the establishment of Sega Enterprises USA at the end of a deal with Bally. The release of Hang-On in 1985 would prove successful in the region, becoming so popular that Sega struggled to keep up with demand for
10591-506: The region. This was less market share in North America than both Nintendo and Atari , which controlled 80 percent and 12 percent of the market. The Master System was eventually a success in Europe, where its sales were comparable to the NES. As late as 1993, the Master System's active installed user base in Europe was 6.25 million units. The Master System has had continued success in Brazil. New versions continue to be released by Sega's partner in
10710-579: The release of the Dreamcast . Additionally, developers Tetsuya Mizuguchi and Kenji Sasaki developed Sega Rally Championship with AM3 before departing to form AM Annex, which later split into Sega AM9 and Sega AM5. In 2000, Sega reorganized its studios into semi-autonomous companies, and AM3 became Hitmaker. The company expanded its development into Dreamcast games and ports, but saw a reduced amount of success in compared to previous years. However Derby Owners Club , World Club Champion Football and The Key of Avalon , proved to be highly successful in
10829-591: The rights to port games from other developers. To help market the console in North America, Sega planned to sell the Master System as a toy, similar to how Nintendo had done with the Nintendo Entertainment System. Sega partnered with Tonka , an American toy company, to make use of Tonka's expertise in the toy industry. Ineffective marketing by Tonka handicapped sales of the Master System. By early 1992, production had ceased in North America. The Master System sold between 1.5 million and 2 million units in
10948-453: The rotational R360 kept Sega competing with machines by rival arcade companies, including Taito . New official region-specific distributors and manufacturers, including the UK's Deith Leisure, allowed Sega to sell its machines outside of Japan with ease. Sega's domestic operations division also opened hundreds of family-oriented suburban Sega World amusement arcades in Japan during this period, as well as large over-18s "GiGO" facilities in
11067-636: The same year, Sega Racing Studio was also formed by former Codemasters employees. In 2006, Sega Europe purchased Sports Interactive , known for its Football Manager series. In the console and handheld business, Sega found success in the Japanese market with the Yakuza , Phantasy Star Portable and Hatsune Miku: Project DIVA series. Sega began providing the 3D imaging for Hatsune Miku holographic concerts in 2010. Sega also distributes games from smaller Japanese game developers and sells localizations of Western games in Japan. In 2013, Index Corporation
11186-421: The same year, Hajime Satomi said Sega's activity would focus on its profitable arcade business as opposed to loss-incurring home software development. In 2004, Sega Sammy Holdings , an entertainment conglomerate, was created; Sega and Sammy became subsidiaries of the new holding company, both companies operating independently while the executive departments merged. According to the first Sega Sammy Annual Report ,
11305-402: The team of Sega Rally Championship . AM Annex was rebranded as AM12 by September 1998, and AM5 in 1999. The AM5 designation was previously used for a team that designed large attractions for Sega's arcades and indoor amusement parks. Mizuguchi later chose to leave Sasaki after being granted his own department as CS4, later AM9, and even later United Game Artists . Sasaki became head of AM5, while
11424-419: The time. Director Kenji Sasaki declared that AM3 "wanted to make a racing game that was very different to all the others out there", while producer Tetsuya Mizuguchi highlighted the game's realistic motion cabinet. Mizuguchi and Sasaki later departed AM3 with the team of Sega Rally Championship to develop Sega Touring Car Championship with their new group, AM Annex. In a 1997 interview, Oguchi stated that
11543-438: The war, the founders sold Standard Games in 1945, and established Service Games the next year, named for the military focus. After the US government outlawed slot machines in its territories in 1952, Bromley sent employees Richard Stewart and Ray LeMaire to Tokyo to establish Service Games of Japan to provide coin-operated slot machines to US bases in Japan. A year later, all five men established Service Games Panama to control
11662-804: The world proposed to be opened by 2000, however only two, Sega World London and Sega World Sydney , would ultimately materialise in September 1996 and March 1997, respectively. Following on from difficulties faced in setting up theme parks in the United States, Sega established the GameWorks chain of urban entertainment centers in a joint venture with DreamWorks SKG and Universal Studios during March 1997. In 1995, Sega partnered with Atlus to launch Print Club (purikura), an arcade photo sticker machine that produces selfie photos. Atlus and Sega introduced Purikura in February 1995, initially at game arcades, before expanding to other popular culture locations such as fast food shops, train stations, karaoke establishments and bowling alleys. Purikura became
11781-412: The world. The company's involvement in the arcade game industry began as a Japan-based distributor of coin-operated machines, including pinball games and jukeboxes . Sega imported second-hand machines that required frequent maintenance. This necessitated the construction of replacement guns, flippers, and other parts for the machines. According to former Sega director Akira Nagai, this is what led to
11900-422: Was Doki Doki Penguin . He directed Super Derby , Super Monaco GP , Rad Mobile , and Heavyweight Champ . Oguchi worked with Sega AM1 before going to AM3. He was appointed as manager of AM3 one month after it opened. AM3 opened by April 1993. By May 1993, a new Sonic the Hedgehog arcade project was in development. SegaSonic the Hedgehog was developed by AM3, with assistance from Sonic Team . Over
12019-403: Was Periscope , an electromechanical game. This was followed by Missile in 1969. Subsequent video-based games such as Pong-Tron (1973), Fonz (1976), and Monaco GP (1979) used discrete logic boards without a CPU microprocessor. Frogger (1981) used a system powered by two Z80 CPU microprocessors. Some titles, such as Zaxxon (1982) were developed externally from Sega,
12138-549: Was a bit of a folly for them to be limiting their potential to Sega hardware", and Stolar had suggested Sega should have sold the company to Microsoft. In a September 2000 meeting with Sega's Japanese executives and heads of its first-party game studios, Moore and Sega of America executive Charles Bellfield recommended that Sega abandon its console business. In response, the studio heads walked out. Sega announced an official company name change from Sega Enterprises, Ltd. to Sega Corporation effective November 1, 2000, officially dropping
12257-403: Was also a technological arms race between Sega and Namco during this period, driving the growth of 3D gaming. Beginning in 1994, Sega launched a series of indoor theme parks in Japan under a concept dubbed "Amusement Theme Park", including Joypolis parks sited in urban Tokyo locations such as Yokohama and Odaiba . A rapid overseas rollout was planned, with at least 100 locations across
12376-432: Was chosen to match Sega's cobalt blue logo; his shoes were inspired by Michael Jackson 's boots, and his personality by Bill Clinton 's "can-do" attitude. Nakayama hired Tom Kalinske as CEO of Sega of America in mid-1990, and Katz departed soon after. Kalinske knew little about the video game market, but surrounded himself with industry-savvy advisors. A believer in the razor-and-blades business model , he developed
12495-399: Was considered to be a pioneer of card related video games, which have become very prevalent in mobile games in Japan. Oguchi was promoted in 2003 alongside Yuji Naka and Toshihiro Nagoshi , based on the success of arcade games that used cards. Due to Hitmaker being one of the few profitable studio of Sega, Oguchi had the freedom to pursue businesses outside of video games, and invested into
12614-432: Was crucial to the system's early success in Japan. Sega's initial shipment of 200,000 Saturn units sold out on the first day, and it was more popular than the PlayStation , made by Sony , in Japan. In March 1995, Sega of America CEO Tom Kalinske announced that the Saturn would be released in the US on Saturday, September 2, 1995, advertised as " Saturn-day ". Sega executives in Japan mandated an early launch to give
12733-512: Was dissolved on May 31, 1960. On June 3, Bromley established two companies to take over its business activities, Nihon Goraku Bussan and Nihon Kikai Seizō. The two new companies purchased all of Service Games of Japan's assets. Kikai Seizō, doing business as Sega, Inc., focused on manufacturing slot machines. Goraku Bussan, doing business under Stewart as Utamatic, Inc. , served as a distributor and operator of coin-operated machines, particularly jukeboxes . The companies merged in 1964, retaining
12852-502: Was established in 2015; Sega Corporation was renamed to Sega Games Co., Ltd., and its arcade, entertainment, and toy divisions separated into other companies. In 2020, Sega Games and Sega Interactive merged to become Sega Corporation. Sega's international branches, Sega of America and Sega Europe are headquartered in Irvine, California , and London. Its development studios include their internal research and development divisions (which utilize
12971-581: Was followed by further reductions to clear the remaining inventory. The final manufactured Dreamcast was autographed by the heads of all nine of Sega's first-party game studios, plus the heads of sports game developer Visual Concepts and audio studio Wave Master, and given away with all 55 first-party Dreamcast games through a competition organized by GamePro . Okawa, who had loaned Sega $ 500 million in 1999, died on March 16, 2001. Shortly before his death, he forgave Sega's debts to him and returned his $ 695 million worth of Sega and CSK stock, helping
13090-443: Was founded by Martin Bromley and Richard Stewart as Nihon Goraku Bussan on June 3, 1960. Shortly after, the company acquired the assets of its predecessor, Service Games of Japan . In 1965, it became known as Sega Enterprises, Ltd., after acquiring Rosen Enterprises, an importer of coin-operated games . Sega developed its first coin-operated game, Periscope , in 1966. Sega was sold to Gulf and Western Industries in 1969. Following
13209-656: Was installed as CEO of Sega Enterprises, Ltd. In 1985, Sega began working on the Mark III, a redesigned SG-1000. For North America, Sega rebranded the Mark III as the Master System , with a futuristic design intended to appeal to Western tastes. The Mark III was released in Japan in October 1985. Despite featuring more powerful hardware than the Famicom in some ways, it was unsuccessful at launch. As Nintendo required third-party developers not to publish their Famicom games on other consoles, Sega developed its own games and obtained
13328-513: Was launched in New York City and Los Angeles on August 14, 1989, and in the rest of North America later that year. The European version of the Mega Drive was released in September 1990. Former Atari executive and new Sega of America president Michael Katz developed a two-part strategy to build sales in North America. The first part involved a marketing campaign to challenge Nintendo and emphasize
13447-439: Was marred by a glitch at one of Sega's manufacturing plants, which produced defective GD-ROMs where data was not properly recorded onto the disc. Sega released the Dreamcast in Europe on October 14, 1999. While Sega sold 500,000 units in Europe by Christmas 1999, sales there slowed, and by October 2000 Sega had sold only about a million units. Though the Dreamcast was successful, Sony's PlayStation still held 60 percent of
13566-409: Was merged into Hitmaker. The next year, Hitmaker was integrated back into Sega. The AM3 designation would continue until 2009 until it was merged into other departments. Hisao Oguchi joined Sega in 1984, when there was only one research and development division for arcade and video games. As part of his earliest work, he worked on project planning for the Master System , and his first game developed
13685-432: Was previously asked to be CEO of Sega. On February 13, Sega announced that it would merge with Sammy; however, as late as April 17, Sega was still in talks with Namco, which was attempting to overturn the merger. Sega's consideration of Namco's offer upset Sammy executives. The day after Sega announced it no longer planned to merge with Sammy, Namco withdrew its offer. In 2003, Sato and COO Tetsu Kamaya stepped down. Sato
13804-524: Was purchased by Sega Sammy after going bankrupt. The year before, Sega signed a deal to distribute Atlus titles in Japan. After the buyout, Sega implemented a corporate spin-off with Index. The latter's game assets were rebranded as Atlus , a wholly owned subsidiary of Sega. List of Sega arcade system boards Sega is a video game developer , publisher , and hardware development company headquartered in Tokyo , Japan , with multiple offices around
13923-501: Was replaced by Hisao Oguchi, the head of the Sega studio Hitmaker . Moore left Sega in January 2003, feeling that the Japanese executives were refusing to adapt to industry changes, such as the demand for mature games such as Grand Theft Auto III . Hideaki Irie, who had worked at Agetec and ASCII , became the new president and COO of Sega of America in October 2003. In August 2003, Sammy bought 22.4 percent of Sega's shares from CSK, making Sammy into Sega's largest shareholder. In
14042-421: Was sold to the American conglomerate Gulf and Western Industries , although Rosen remained CEO. In 1974, Gulf and Western made Sega Enterprises, Ltd., a subsidiary of an American company renamed Sega Enterprises, Inc. Sega released Pong-Tron , its first video-based game, in 1973. Despite late competition from Taito 's hit arcade game Space Invaders in 1978, Sega prospered from the arcade video game boom of
14161-425: Was structured into four parts: Consumer Business (video games), Amusement Machine Business (arcade games), Amusement Center Business (Sega's theme parks and arcades) and Pachislot and Pachinko Business (Sammy's pachinko and pachislot business). According to an industry survey, as of 2005, sales of arcade machines were up for the previous four years in Japan, while down for nine straight years overseas. In response to
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