The Sega Corporation (株式会社セガ Kabushiki gaisha Sega?) (short for Service Games), and usually styled as SEGA, is a Japanese multinational video game developer, publisher, and hardware development company headquartered in Tokyo, Japan, with multiple offices around the world. Sega developed and manufactured numerous home video game consoles from 1983 to 2001, but the financial losses incurred from their Dreamcast console caused the company to restructure itself in 2001, and focus on providing software as a third-party developer, exiting console manufacturing completely. However, arcade development would continue unaffected, and Sega is the world's most prolific arcade producer.
Sega, along with their many software studios, are known for multi-million-selling game franchises including Sonic the Hedgehog, Virtua Fighter, Phantasy Star, Yakuza, and Total War. Sega's head offices, as well as the main office of its domestic division, Sega Corporation, formerly known as the Sega Enterprises, Ltd. (株式会社セガ・エンタープライゼス Kabushiki gaisha Sega Entāpuraizesu?), are located in Ōta, Tokyo, Japan.Sega's European division, Sega Europe Ltd., is headquartered in the Brentford area of London in the United Kingdom. Sega's North American division, Sega of America Inc., is headquartered in San Francisco, having moved there from Redwood City, California in 1999. In 2015, the division will relocate to Southern California. Sega Publishing Korea is headquartered in Jongno, Seoul, Korea. Sega's Australian & European operations outside of the United Kingdom closed on July 1, 2012 due to world economic pressures. Distribution of Sega products in Australia as of July 2012 is handled by Five Star Games, made up of all the redundant employees from Sega Australia.
- 1 History
- 2 Sega Studios
- 3 Company personnel
- 4 See also
- 5 References
- 6 External links
Company origins (1940–1982)
Sega's roots can be traced back to a company based in Honolulu, Hawaii named Service Games, which began operations in 1940. In 1951, Raymond Lemaire and Richard Stewart moved the company to Tokyo, Japan to develop and distribute coin-operated jukeboxes, games, and slot machines. Within a few years Service Games began importing these machines to American military bases throughout Japan.
In 1954, David Rosen, an American officer in the Air Force, launched a two-minute photo booth business in Tokyo. This company eventually became Rosen Enterprises, and in 1957 began importing coin-operated games to Japan. By 1965, Rosen Enterprises grew to a chain of over 200 arcades, with Service Games its only competitor. Rosen then orchestrated a merger between Rosen Enterprises and Service Games, who by then had their own factory facilities, becoming chief executive of the new company, Sega Enterprises, which derived its name from the first two letters of SErvice GAmes.
Within a year, Sega began the transition from importer to manufacturer, with the release of the Rosen designed submarine simulator game Periscope. The game at that time sported innovative light and sound effects, eventually becoming quite successful in Japan. It was soon exported to both Europe and the United States, becoming the first arcade game in America to cost 25¢ per play.
In 1969, Rosen sold Sega to Gulf+Western which also owned Paramount Pictures which later became Paramount Communications Inc. (whose media properties had since been absorbed by Viacom), remaining on however as CEO of the Sega division. Under Rosen's leadership, Sega continued to grow and prosper, and in 1972 G&W made Sega Enterprises a subsidiary, and took the company public. Sega's current logo dates back to 1976. Sega prospered heavily from the arcade gaming boom of the late 1970s, with revenues climbing to over $100 million by 1979.
Entry into the home console market (1982–1989)
In 1982, Sega's revenues would surpass $214 million, and they introduced the industry's first three-dimensional game, SubRoc 3D. The following year, an overabundance of arcade games led to the video game crash, causing Sega's revenues to drop to $136 million. Sega then pioneered the use of laser disks in the video game Astronbelt, and designed and released its first home video game console, the SG-1000 for the second generation of home consoles. Despite this, G&W sold the U.S. assets of Sega Enterprises that same year to pinball manufacturer Bally Manufacturing, and in January 1984 Rosen resigned his post with the company.
The Japanese assets of Sega were purchased for $38 million by a group of investors led by Rosen, Robert Deith, and Hayao Nakayama, a Japanese businessman who owned Esco Boueki (Esco Trading) an arcade game distribution company that had been acquired by Rosen in 1979. Nakayama became the new CEO of Sega, Robert Deith Chairman of the Board, and Rosen became head of its subsidiary in the United States.
In 1984, the multibillion dollar Japanese conglomerate CSK bought Sega, renamed it to Sega Enterprises Ltd., headquartered it in Japan, and two years later, shares of its stock were being traded on the Tokyo Stock Exchange. David Rosen's friend, Isao Okawa, the chairman of CSK, became chairman of Sega.
In 1986, Sega of America was poised to take advantage of the resurgent video game market in the United States.
Sega would also release the Sega Master System and the first Alex Kidd game, who would be Sega's unofficial mascot until 1991, when Sonic the Hedgehog took over. While the Master System was technically superior to the NES, it failed to capture market share in North America and Japan due to highly aggressive strategies by Nintendo and ineffective marketing by Tonka (which marketed the console on behalf of SEGA in the United States). However, the Master System was highly successful in Europe, Australia, New Zealand, and Brazil with games still being sold well into the 1990s alongside the Mega Drive and Nintendo's NES and SNES.
With the introduction of the Sega Genesis in America, Sega of America launched an anti-Nintendo campaign to carry the momentum to the new generation of games, with its slogan "Genesis does what Nintendon't." This was initially implemented by Sega of America President Michael Katz. When Nintendo launched its Super Nintendo Entertainment System in 1991, Sega changed its slogan to "Welcome to the next level."
The same year, Sega of America's leadership passed from Michael Katz to Tom Kalinske, who further escalated the "console war" that was developing. As a preemptive strike against the release of the SNES, Sega re-branded itself with a new game and mascot, Sonic the Hedgehog. This shift led to a wider success for the Genesis and would eventually propel Sega to 65% of the market in North America for a brief time. Simultaneously, after much previous delay, Sega released the moderately successful Mega-CD as an add-on feature, allowing for extra storage in games due to their CD-ROM format, giving developers the ability to make longer, more sophisticated games, the most popular of which was Sega's own Sonic CD. Sonic the Hedgehog 2 was also released at this time, and became the most successful game Sega ever made, selling six million copies as of June 2006.
In 1994, Sega released the Sega 32X in an attempt to upgrade the Mega Drive to the standards of more advanced systems. It sold well initially, but had problems with lack of software and hype about the upcoming Sega Saturn and Sony's PlayStation. Within a year, it was in the bargain bins of many stores. Also in 1994, Sega launched the Sega Channel, a subscription gaming service delivered by local cable companies affiliated with Time-Warner Cable or TCI, through which subscribers received a special cartridge adapter that connected to the cable connection. At its peak, the Sega Channel had approximately 250,000 subscribers.
Sega versus Accolade
In 1992, Sega lost the Sega v. Accolade case, which involved independently produced software for the Sega Mega Drive/Genesis console. Accolade had copied a small amount of Sega's code to achieve compatibility with the Sega Genesis platform. The verdict set a precedent that copyrights do not extend to non-expressive content in software for which a system is required to run the software. The case in question stems from the nature of the console video game market. Hardware companies often sell their systems at or below cost, and rely on other revenue streams such as in this case, game licensing. Sega was attempting to "lock out" game companies from making Mega Drive games unless they paid Sega a fee (something its competition has done in the past). Their strategy was to make the hardware reject any cartridge that did not include a Sega trademark. If an unlicensed company included this trademark in their game, Sega could sue the company for trademark infringement. Though Sega lost this lawsuit, all later Sega systems seemed to incorporate similar hardware requirements.
On May 11, 1995, Sega released the Sega Saturn (with Virtua Fighter) in the American market. Sega's first CD console that was not an add on, utilized two 32-bit processors and preceded both the Sony PlayStation and the Nintendo 64. However, poor sales in the West (including the traditional stronghold markets in Europe) led to the console being abandoned. The lack of a strong Sonic title (and titles based on other Genesis franchises) and its high price in comparison to the PlayStation were among the reasons for the failure of the console. Notable titles include several titles exclusive to the Japanese market, like Radiant Silvergun and Sakura Taisen, involving fighting games like Last Bronx, rail shooters, such as Panzer Dragoon and The House of the Dead and a few well regarded RPGs; Panzer Dragoon Saga, Grandia, Albert Odyssey: Legend of Eldean, Shining Force III, Dragon Force, Shining Wisdom, Shining the Holy Ark and Magic Knight Rayearth. Tomb Raider was initially developed with the Sega Saturn in mind, but was quickly ported to the Sony PlayStation. With the Saturn's failure to attract the greater market share, development for the sequels were focused on Sony's console, and Lara Croft ironically became an unofficial mascot for the system.
On November 27, 1998, Sega launched the Dreamcast game console, Sega's final console, in Japan. The Dreamcast was competitively priced, partly due to the use of off-the-shelf components, but it also featured technology that allowed for more technically impressive games than its direct competitors, the Nintendo 64 and PlayStation. An analog 56k modem was also included, allowing gamers to play multi-player games online. Featuring titles such as the action-puzzle title ChuChu Rocket!, Phantasy Star Online, the first console-based MMORPG, "Quake 3 Arena" and the innovative Alien Front Online, the first console game with online voice chat.
The Dreamcast's launch in Japan was a failure. Launching with a small library of software and in the shadow of the upcoming PS2, the system would not gain great success, despite several successful games in the region. The Western launch a year later was accompanied by a large amount of both first-party and third-party software and an aggressive marketing campaign. It was extremely successful and earned the distinction of "most successful hardware launch in history," selling a then-unprecedented 500,000 consoles in its first week in North America. On November 1, 2000, Sega changed its company name from Sega Enterprises, Ltd. to Sega Corporation. Sega was able to hold onto this momentum in the US almost until the launch of Sony's PlayStation 2. The Dreamcast is home to several innovative and critically acclaimed games of the time, including one of the first cel-shaded titles, Jet Set Radio (Jet Grind Radio in North America); Seaman, a game involving communication with a fish-type creature via microphone; Samba de Amigo, a rhythm game involving the use of maracas, and Shenmue, an adventure game of vast scope with freeform gameplay and a striking attempt at creating a detailed in-game city.
Faced with debt and competition from Sony, Nintendo, and Microsoft, Sega discontinued the Dreamcast hardware in 2001. The final game Sega released for it was Puyo Puyo Fever in 2004.
Shift to third-party software developer (2001–2005)
In late 1999, Sega Enterprises Chairman Isao Okawa spoke at an Okawa Foundation meeting, saying that Sega's focus in the future would shift from hardware to software, but adding that they were still fully behind the Dreamcast. On January 23, 2001, a story ran in Nihon Keizai Shimbun that said Sega was going to cease production of the Dreamcast and develop software for other platforms. After the initial denial, Sega Japan then put out a press release confirming they were considering producing software for PlayStation 2 and Game Boy Advance as part of their "New Management Policy". Then on January 31, 2001, Sega of America officially announced they were becoming a third-party software publisher.
The company has since developed primarily into a platform-neutral software company, known as a "third-party publisher", that creates games that will launch on a variety of game consoles produced by other companies, many of their former rivals, the first of which was a port of ChuChu Rocket! to Nintendo's Game Boy Advance.
By March 31, 2002, Sega had five consecutive fiscal years of net losses. To help with Sega's debt, CSK founder Isao Okawa, before his death in 2001, gave the company a $695.7 million private donation, and also talked to Microsoft about a sale or a merger with their Xbox division, but those talks failed. Discussions also took place with Namco, Bandai, Electronic Arts and again with Microsoft.
In August 2003, Sammy bought the outstanding 22% of shares that CSK had, and Sammy chairman Hajime Satomi became CEO of Sega.
During mid-2004, Sammy bought a controlling share in Sega Corporation at a cost of $1.1 billion, creating the new company Sega Sammy Holdings, one of the biggest game manufacturing companies in the world.
|This section about Sega's history and activity from 2005 to present day relies too much on references to primary sources. (March 2015)|
|This section may require copy editing. (February 2015)|
Sega's arcade machines range from customised cabinets as seen in the 360 degree rotating machine R-360, to their own arcade system boards found in the System series, Model series, NAOMI series, Triforce (in co-operation with Nintendo and Namco), Ring series and Nu.
Sega has shaped and reinvigorated the industry on multiple occasions, with the first titles (Hang-On and After Burner) to make use of hydraulic cabinet functionality and force feedback control. Later they laid the foundation for 3D racing and fighting games as seen with Virtua Fighter and Virtua Racing. Sega was also one of the first to introduce medal games with World Bingo and World Derby in the 1980's, a sub-industry within Japanese arcades.
After the decline of the global arcade industry around the 21st century, Sega holds a dominant position in network-enabled trading card game machines and large-scale satellite game machines by being the first to introduce and popularize them in Japan. Games of this type include Derby Owners Club, World Club Champion Football, Sangokushi Taisen and Border Break. The product portfolio of card games have also been extended and aimed at kids such as Mushiking and Oshare Majo: Love and Berry. All of these games became some of the highest-grossing games of Japanese arcade culture.
Sega Amusements was initially established to be a distributor for Japanese titles. In recent times however they began developing local games themselves in order to appease to the small local arcade culture. Arcade culture in Japan has changed by catering for the hardcore fans who visit game centers more frequently.
Sega archived a variety of milestones in the general amusement-related business, outside of arcade game machines. UFO Catcher was introduced in 1985 and is Japan's most commonly installed claw crane game. The first Purikara machine in Japan was made jointly by Atlus and Sega in 1995. In 1996 Sega opened Joypolis, with overseas variants called SegaWorld, Sega Republic, and Gameworks. Sega also operates a chain of arcade facilities in Japan.
In 2012, Sega refurbished its Joypolis theme park in Tokyo, Japan. Sega provided the 3D imaging for Hatsune Miku's holographic concerts. In 2013, in co-operation with BBC Earth, Sega opened the first interactive nature simulation museum, Orbi Yokohama.
Sonic the Hedgehog continues to be an internationally recognised game with its popularity continually increasing, having sold 150 million units of the franchise. The reception of games has ranged from negative, mixed, to generally positive.
In the console and handheld business, Sega of Japan found success with the Ryu Ga Gotoku series (Yakuza overseas) and Hatsune Miku: Project DIVA series of games, and other games aimed at the Japanese market. In the digital game market, Sega's biggest success is the F2P MMO Phantasy Star Online 2, along with the mobile games Chain Chronicle and Puyo Puyo!! Quest.
In Japan, Sega distributes titles from smaller Japanese game developers and localizations of western titles. In 2012, Index Corporation has negotiated with Sega to distribute titles in Japan. In 2013, Index Corporation was purchased by Sega Sammy.
In the 2010s Sega established several operational firms for its mobile phone, theme park and arcade businesses, in order to streamline operations and avoid prior losses. In 2012, Sega established Sega Networks Co., Ltd. for its mobile phone business; although separate at first, it will merge with Sega beginning in 2015, and establish Sega Games Co., Ltd. Also in 2012, Sega Entertainment Co., Ltd. was established for Sega's theme park business. And beginning in 2015, Sega Interactive Co., Ltd. will be established for the Arcade business.
In 2006, Sega Europe purchased Sports Interactive, known for its Football Manager series, and Creative Assembly, known for its Total War series. In the same year, the Sega Racing Studio was also formed. Sega of America purchased Secret Level in 2006, which was renamed to Sega Studio San Francisco in 2008. In early 2008 Sega announced that Sega would re-establish an Australian presence, as a subsidiary of Sega of Europe, with a development studio branded as Sega Studio Australia. In 2013, following THQ's bankruptcy, Sega bought Relic Entertainment, known for its Company of Heroes series.
Sega collaborated with many western studios such as Bizarre Creations, Backbone Entertainment, Monolith, Sumo Digital, Kuju Entertainment, Obsidian Entertainment and Gearbox Software. They also licensed movie IPs such as Alien, Marvel Comics and The Golden Compass.
- Hideki Okamura: President of Sega Japan (2013–present)
- Okitane Usui: President of Sega Japan (2008–2012) (Hired by Groupon as International Vice President, East Asia)
- Hayao Nakayama: Cofounder, president SOJ (1984–1998)
- Shoichiro Irimajiri: President SOJ (1998–2000)
- Isao Okawa: President SOJ (2000–2001) (died shortly after Dreamcast was discontinued in North America, forgave the debts Sega owed him, and gave the company his $695 million worth of Sega and CSK stock to Sega Corporation.)
- Hisao Oguchi: President SOJ (2001–2004)
- John Cheng: President of Sega of America (2012–present)
- Mike Hayes: President of Sega of America (2009–2012)
- Simon Jeffery: President Sega of America (2003–2009)
- Peter Moore: President Sega of America(1999–2003)
- Bernie Stolar: President Sega of America(1996–1999)
- Tom Kalinske: President Sega of America(1991–1996)
- Michael Katz: President Sega of America(1989–1991)
- Bruce Lowry: President Sega of America(1986–1988)
- Naoya Tsurumi: CEO of Sega of America (2005-2009)
- David Rosen: Cofounder, board member
- Jürgen Post: President of Sega of Europe (2012–present)
- Mike Hayes: President of Sega of Europe (2009–2012)
- Robert Deith: Cofounder/chairman Sega Europe (1991–2001)
- Naoya Tsurumi: CEO of Sega of Europe (2004-2009)
- Paul Williams: CEO of Sega Amusements Ltd. (heretofore)
- Yasutaka Sato: President SPK (2005–2008)
- Kazunobu Takita: President SPK (2008–2011)
- Tooru Matsuo: President SPK (2011–2013)
- Akira Nomoto: President SPK (2013–present)
Research & Development
- Hideki Sato: Head of Sega Away Team (1985–2001) (also called Sega Hardware Team R&D)
- List of Sega video game consoles
- List of Sega video game franchises
- Lists of Sega games
- Sega Pinball
- Shahed Ahmed (January 31, 2001). "Sega announces drastic restructuring". GameSpot. Retrieved September 20, 2009.
- "Corporate." Sega. Retrieved on January 13, 2009.
- Angwin, Julie and Laura Evenson. "Sega Expected to Move HQ To S.F. From Redwood City." San Francisco Chronicle. Thursday June 11, 1998. Retrieved on January 13, 2009.
- "SegaRestructuring". 2015-01-31.
- General (2012-06-28). "Sega to close Australian and multiple European offices - General and Nintendo News from". Vooks. Retrieved 2012-11-09.
- "SEGA History". FundingUniverse. Retrieved May 11, 2011.
Sega of America, based in San Francisco, California, was established in 1986 as the wholly owned subsidiary of Sega Corporation of Japan. However, its rich history of gaming goes back 50 years.
- "Sega Takes Aim at Disney's World (Page 4 of 4)" The New York Times by Andrew Pollack: Sunday, July 4, 1993
- "Sega Master System (SMS) – 1986–1989". Classicgaming.gamespy.com. Retrieved February 23, 2011.
- Horowitz, Ken (April 28, 2006). "Interview: Michael Katz". Sega-16.com. Retrieved March 28, 2009.
- Ken Horowitz (February 18, 2005). "Tom Kalinske: American Samurai". Sega-16.com. Retrieved March 28, 2009.
- "Top Sega CD Games – Best Sega CD Video Games – Best Sega CD Games – Top Sega CD Video Games". Gamespot.com. Retrieved February 23, 2011.
- Boutros, Daniel (August 4, 2006). "A Detailed Cross-Examination of Yesterday and Today's Best-Selling Platform Games". UBM. Gamasutra. Retrieved February 14, 2011.
- "A History of Home Video Games from Atari to Xbox, Playstation and Wii". Thegameconsole.com. Retrieved February 23, 2011.
- "PlanetDreamcast: About – Sega History". June 16, 2008. Archived from the original on June 16, 2008. Retrieved February 23, 2011.
- Buchanan, Levi (June 11, 2008). "The SEGA Channel – Retro Feature at IGN". Retro.ign.com. Retrieved February 23, 2011.
- "What Hath Sonic Wrought? Vol. 10." Buchanan, Levi. IGN. February 2, 2009. "There are a number of reasons why the SEGA Saturn failed. The botched surprise launch. Lack of third-party support. And while the lack of a true Sonic sequel for the Saturn certainly didn't wholly destroy the console's chances, the lack of appearances by the SEGA mascot sure didn't help matters much. Nintendo had proven up to this generation the value of launching with a mascot game. The accelerated launch isn't to blame for the critical oversight, either. During its truncated lifecycle, the Saturn hosted not one Sonic platformer."
- Tomb Raider. Sega Retro. Retrieved on 2013-10-31.
- Johnston, Chris (May 27, 1997). "Sega, Bandai Merger Canceled – News at GameSpot". Gamespot.com. Retrieved February 23, 2011.
- "Vidgame.net: Sega Dreamcast". Archived from the original on February 13, 2008. Retrieved February 23, 2011.
- "Sega Enterprises, Ltd. Changes Company Name– Sega Corporation". Sega.jp. 2000-11-01. Retrieved 2012-09-09.
- Brandon Justice (January 23, 2001). "Sega Sinks Console Efforts?". IGN.
- "弊社ドリームキャスト事業に関する一部の報道について". Sega. January 24, 2001.
- Anoop Gantayat (January 23, 2001). "Sega Confirms PS2 and Game Boy Advance Negotiations". IGN.
- "Sega Enterprises, Ltd. Annual Report 1998" (PDF). Sega via Internet Archive. Archived from the original on June 17, 2002.
- "Sega Corporation Annual Report 2000" (PDF). Sega via Sega Sammy Holdings. Archived from the original on September 25, 2007. Retrieved March 12, 2010.
- "Sega Corporation Annual Report 2002" (PDF). Sega via Sega Sammy Holdings. Retrieved March 12, 2010.
- "Sega Corporation Annual Report 2004" (PDF). Sega via Sega Sammy Holdings. Archived from the original on December 25, 2009. Retrieved March 12, 2010.
- "Analysts say Sega taking its toll on CSK's bottom line" Taipei Times via BLOOMBERG, Tokyo – Thursday, Mar 13, 2003, Page 12
- "Late Sega exec leaves legacy, new leadership" Tokyo, Japan CNN By Kristie Lu Stout – March 19, 2001
- "Microsoft Explores A New Territory: Fun (Page 2 of 5)" The New York Times By Chris Gaither – November 4, 2001
- Niizumi, Hirohiko; Tor Thorsen (May 18, 2004). "Sammy merging with Sega". GameSpot. Archived from the original on 2008-10-06. Retrieved February 18, 2011.
$1.45 billion deal will see the Sonic publisher become a subsidiary of a new Sammy-controlled company.
- https://www.segasammy.co.jp/english/ir/library/pdf/printing_annual/2007/e_2007_annual.pdf Statements of shareholder reports about Amusement game machines Page 36
- https://www.segasammy.co.jp/english/ir/library/pdf/printing_annual/2007/e_2007_annual.pdf Page 36
- Arcade game#List of highest-grossing arcade video games
- Previous relationship with Sega, in Atlus CEO statement
- http://www.segasammy.co.jp/english/pdf/release/20150212_organizational%20restructuring_e_final.pdf. Missing or empty
- Kent, Steven (2001). "Three Horses and a Pony". The Ultimate History of Video Games: From Pong to Pokémon and Beyond- The Story That Touched Our Lives and Changed the World (First ed.). Roseville, California: Prima Publishing. p. 589. ISBN 0-7615-3643-4.
In his last days, Okawa forgave Sega's debts to him and returned all of his shares of Sega and CSK stock as a gift-in Sega's case, a $695 million gift that would help the company survive the transition of becoming a multiplatform software manufacturer.
- "Bruce Lowry". LinkedIn. Retrieved February 23, 2011.
- "SEGA Integrates SEGA of America and SEGA Europe Management Teams To Drive Growth In Western Markets". Retrieved May 20, 2014.
- "Sega's Naoya Tsurumi promoted to lofty new position". Retrieved May 20, 2014.
- Sega financial report
- Yahoo! Finance details for Sega Corporation
- Yahoo! Finance details for Sega of America
- Sega's entry into and growth in the American market is documented in Terry Sanders' film The Japan Project: Made in Japan.
- Sega of America's official website
- Sega of Japan's official website (Japanese)
- Sega of Europe's official website
- Sega's Official YouTube Channel
- Sega Sammy Holdings official website
- SEGA Publishing Korea's official website (Korean)
- Sega Retro, an expansive Sega wiki