Sega
Corporation is a multinational video game software
and hardware development company, and a home computer
and console manufacturer headquartered in Ota,
Tokyo, Japan. The company had success with both
arcades and home consoles, but on January 31,
2001, officially left the consumer console business
and began concentrating on software development
for multiple third-party platforms.
Sega's main offices, as well as the main offices
of its domestic division, Sega Corporation (Japan),
are located in Ota, Tokyo, Japan. Sega's European
division, Sega Europe Ltd., is headquartered in
the Brentford area of London. Sega's North American
division, Sega of America Inc., is headquartered
in San Francisco, California; having moved there
from Redwood City, California in 1999. Sega Australia's
headquarters are located in Sydney, New South
Wales. The company also has offices in France,
Germany and Italy.
On November 1st, 2000, Sega changed it's company
name from Sega Enterprises, Ltd to Sega Corporation.
History
[edit]Origins
and entry into the video game market (1945–1989)
Sega was founded in 1940 as Standard Games (later
Service Games) in Honolulu, Hawaii, United States,
by Marty Bromely, Irving Bromberg, and James Humpert
to provide coin-operated amusements for American
servicemen on military bases. Bromely suggested
that the company move to Tokyo, Japan in 1951
and in May 1952 "SErvice GAmes of Japan"
was registered.
In 1954, another American businessman, David Rosen,
moved to Tokyo and established the company Rosen
Enterprises, Inc., in Japan to export art. When
the company imported coin-operated instant photo
booths, it stumbled on a surprise hit: The booths
were very popular in Japan. Business was booming,
and Rosen Enterprises expanded by importing coin-operated
electro-mechanical games.
Rosen Enterprises and Service Games merged in
1965 to create Sega Enterprises. Within a year,
the new company released a submarine-simulator
game called Periscope that became a smash-hit
worldwide.
In 1969, Gulf+Western purchased Sega, and Rosen
was allowed to remain CEO of the Sega division.
Under Rosen's leadership, Sega continued to grow
and prosper. In 1976, they released a big screen
TV, Segavision (not to be confused with their
upcoming portable game system, Sega Vision).
In the video game arcades, Sega was known for
games such as Zaxxon and Out Run. Sega's revenues
would hit $214 million by 1982 and in 1983, Sega
would release its first video game console, the
SG-1000, the first 3D arcade video game, SubRoc-3D,
which used a special periscope viewer to deliver
individual images to each eye, and the first laserdisc
arcade game, Astron Belt.
In the same year, Sega was one of the victims
of the video game crash. Hemorrhaging money, Gulf+Western
sold the U.S. assets of Sega to famous pinball
manufacturer Bally Manufacturing Corporation.
The Japanese assets of Sega were purchased for
$38 million by a group of investors led by Rosen
and Hayao Nakayama, a Japanese businessman who
owned Esco Boueki (Esco Trading) a arcade game
distribution company[8] that had been acquired
by Rosen in 1979. Nakayama became the new CEO
of Sega, 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 established 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 due to highly aggressive
strategies by Nintendo and ineffective marketing
by Tonka. However, it did dominate the European
and Brazilian markets until Sega discontinued
the system in Europe in 1996, and in Brazil in
2000
Shift
to a software manufacturer (2001–2005)
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 them former
rivals, the first of which was a port of Chu Chu
Rocket to Nintendo's Game Boy Advance.
Arcade units are still being produced, first under
the Sega NAOMI name, and then with subsequent
releases of the Sega NAOMI 2, Sega HIKARU, Sega
Chihiro, Triforce (in collaboration with Nintendo
and Namco) and the Sega Lindbergh.
By March 31 2002, Sega had five consecutive fiscal
years of net losses. To help with Sega's dept,
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. On February 13, 2003, Sega announced plans
to merge with Sammy, but plans fell through. Discussions
also took place with Namco, Bandai, Electronic
Arts and again with Microsoft.
With this shift to software development, this
affected Sega's Australian operations. Sega Ozisoft
ceased to operate in its current form with Sega
Enterprises selling its share in Sega Ozisoft
and was bought over by Infogrames in 2002. This
led to Infogrames having an Australian presence
for the first time but decided to change the company
name for its Australian operations to GameNation.
Sega then went to find an Australian distributor,
and made a deal with THQ Asia Pacific, who at
the time until 2006 had deals with Capcom. In
2003 GameNation was changed to Atari Australia
and then challenged THQ Asia Pacific to the distribution
rights to Sega's IP's in Australia but failed.
In early 2008 Sega Corporation announced that
Sega would re-establish an Australian presence,
effectively ending THQ's distribution of Sega's
products in Australia and would be a subsidiary
of Sega of Europe, rather than being a separate
local subsidiary like Atari Australia, Nintendo
Australia and THQ Asia Pacific.
In August 2003, Sammy bought the outstanding 22%
of shares that CSK had, and Sammy chairman Hajime
Satomi became CEO of Sega. With the Sammy chairman
at the helm of Sega, it has been stated that Sega's
activity will focus on its profit-making arcade
business rather than its loss-making home software
development. In late December, Sega released Sonic
Heroes selling over 2 million copies. It was the
first Sonic game to be on both the Xbox and the
PlayStation 2.
During the middle of 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. With the merger, Sega reabsorbed
its second party studios and began to reorganize
them. Tetsuya Mizuguchi, father of Sega Rally
and Space Channel 5, cited the changes in the
corporate culture after the Sega-Sammy merger.
On January 25, 2005, Sega's Visual Concepts, a
studio Sega dubbed a "1.5" developer,
was shut down by Take-Two Interactive. Sega used
the parlance "1.5" as a mid-point of
sorts between first-party and second-party developer
status: that is, a wholly owned studio that would
otherwise be known as a first-party developer,
but was outside of internal development teams.
Visual Concepts was known for many Sega Sports
games including the ESPN NFL Football series,
formerly NFL2K. The sale also came with Visual
Concept's wholly-owned subsidiary Kush Games.
Take Two subsequently announced the start of the
publishing label 2K Games because of this purchase.
Current
Status (2006–present)
By the end of 2005, Sega experienced strong earnings
growth across multiple divisions. Contributing
to the company's success were strong pachinko
sales, and sales of software titles Ryu Ga Gotoku
(known as Yakuza outside of Japan), Mushiking,
and Sonic the Hedgehog.
In an effort to appeal to western tastes, they
partnered with Obsidian Entertainment to develop
a new RPG for the PlayStation 3, Xbox 360, and
PC based on the Aliens Franchise.[33] The partnership
was the latest in a series of collaborations with
western video game studios, including Monolith
Productions (Condemned: Criminal Origins), Bizarre
Creations (The Club), and Silicon Knights (who
have yet to announce their project with Sega).
That desire to have a more Western appeal for
Sega was shortly followed up by Sega acquiring
British developer Sports Interactive after a successful
run of publishing Football Manager 2005 and 2006,
in which they managed to sell 1.5 million copies,[34]
the deal was said to be worth in the region of
£30 million ($52 million) by Miles Jacobson,
Sports Interactive’s Managing Director.[35]
This was, however, not the only developer Sega
acquired, as they also purchased American developer
Secret Level. Although the terms of the deal were
not disclosed,[36] Secret Level had begun work
before being bought by Sega to “recreate
a classic Sega franchise" for the PS3 and
Xbox 360 in July 2005, which was revealed to be
Golden Axe: Beast Rider later that year.
While Sega continued its expansion in the West,
on May 8, 2006, it was announced Sega of Japan
begun helping famed Sega developer and Sonic Team
head Yuji Naka (known for being the main programmer
for the original Sonic the Hedgehog games and
Nights into Dreams...) to start up his own company
titled "Prope" (Latin for "beside"
and "near future") in which Sega helped
provide 10% startup capital[38] and have the option
to publish games produced from the studio if they
wished to.
Due to the continued success of Sega’s software
sales, the company reported on May 17, 2006 a
31% rise in net profits from that of the previous
year of the period ending March 31, 2006, being
posted at ¥66.2 billion ($577 million), as
well as an increase in operating profit growing
by 13% from the previous year, being posted at
¥553.2 billion ($4.82 billion). Notable titles
to have helped Sega increase profits in the West,
such as Shadow the Hedgehog (which sold over a
million copies) and Sonic Riders, whilst in Japan,
games such as Yakuza, Mushiking and Brain Trainer
Portable continued to have strong sales.
Although Sega seemed poised to continue increasing
profits, the company reported a massive drop of
93% profits for the period ending June 30, 2006
compared to the same period the previous year.
Net income for the company dropped from $98.3
million (a year earlier) to $7.12 million for
this period as well as total sales dropping from
$926.5 million to $809.1 million, Sega reported
that the decrease in profits was due to no significant
big releases by its slot machine division.
Despite this, Sega reported in November a massive
52% rise in profits for the periods between April
and September 2006, compared to the same period
last year.[42] Software sales for the company
had also increased with 5.75 million. Of those
units, 1.76 million were sold in Japan, 1.59 million
in Europe, 2.36 million in the US and 30,000 in
other regions. a number of titles were said to
have performed well, in particular Super Monkey
Ball: Touch & Roll for the Nintendo DS and
Football Manager 2006 for the Xbox 360 having
sold well. While Sega performed better in 2006,
they had slashed their forecasts for the year
ending March 2007 by 20% with an anticipated profit
of $536.7 million, down from the initial profits
of $656.7 million.
On August 26, 2007, IGN Australia announced that
Sega would re-establish itself in Australia, ending
THQ Asia Pacific's distribution of Sega products
in Australia. Sega Australia has a very close
relationship with Nintendo Australia, despite
Sega Ozisoft and NAL previously being rivals in
the Australian gaming market. Sega Australia currently
do not distribute in New Zealand, instead like
most other Australian publishers, they opt to
let retailers take care of the distribution e.g
EB Games Australia and K-Mart.
Continuing to prepare more games for the Western
market, Sega was able to bridge a partnership
with New Line Cinema in September to develop a
game for the movie tie-in game The Golden Compass
and also partnered themselves with Fox to develop
two new games based on the Alien franchise. Sega
then assigned critically acclaimed developers
Gearbox software to develop a first person shooter
(Aliens: Colonial Marines) and Obsidian Entertainment
to develop an RPG based on the popular film franchise
for the Playstation 3, Xbox 360, and PC. The latter
was cancelled for undisclosed reasons by Sega.
However Aliens: Colonial Marines is still in production
by Gearbox and has an expected release date of
2010. Sega has also been publishing games from
independent studios (such as Platinum Games),
and is currently considering turning them into
franchises.
Sega has also designed an online flash game site
dubbed "PlaySEGA," which includes both
original games and ports of classic games, with
retro Sonic games being promised in the long run.
Users of this site earn various amounts of "PlaySEGA
Rings," which they can use to customize and
house their avatar or enter weekly cash drawings.
In September 2009, evidence was uncovered[46]
that suggests Sega is expanding into the online
gambling sector with the launch of an online casino
and poker room in October 2009. (Credit:
Wikipedia)
