Sega

Sega’s path to gaming ran through slot machines, jukeboxes, and arcade cabinets before the company emerged as Nintendo’s fiercest rival. The name is older than the company that carries it: Sega Enterprises was created by a merger in 1965, and took its name from the older of the two halves.

Sega Visions, Sega’s own American magazine, told the story in February 1993:

The year was 1951. […] Service Games stood at [the forefront of] amusement technology. Products [ranged from] jockey tables to electro-mechanical pinball machines. Then, in 1965, Service Games merged with Rosen Enterprises, Ltd. (founded in Japan by American David Rosen), to become SEGA Enterprises Japan, its new name derived from SErvice GAmes. […] In 1969, SEGA Enterprises was acquired by the U.S.-based Gulf+Western Industries.

Computer and Video Games gave an independent account in November 1998 that agrees on the shape and differs on one detail:

It all started in the early 1950s, when America was fighting the Korean War, and US soldiers were often based in Japan. A company named Nihon Goraku Bussan started to import pinball machines and jukeboxes to entertain these soldiers. In 1965, Nihon Goraku Bussan merged with a company run by ex-US Serviceman David Rosen.

A third account, the modern SEGA Master System Compendium, adds a stage neither magazine mentions:

SEGA was established in the 1940s as Standard Games, with the objective of supplying US military bases with slot machines before relocating to Japan under the name Service Games in 1953. When the company became SEGA in the mid-’60s it started creating its own titles.

⚠ That one is a modern book rather than a period source, and it is the only place here that names Standard Games or gives 1953. Treat the stage as attributed rather than settled.

All three make the mid-1960s the point at which the company became Sega, and all three begin with American-run coin-op machines supplied to US servicemen. They name the Japanese half differently — Service Games in Sega’s telling, Nihon Goraku Bussan in CVG’s — and the founded: 1960 this entry carries is a different thing again: the incorporation date of Nihon Goraku Bussan, which is the date Sega itself came to use later. Three defensible answers measuring three different events, and no reason to collapse them into one. Their arcade heritage—Out Run, Space Harrier, After Burner—brought spectacle to gaming. Their consoles—Master System, Genesis/Mega Drive—gave Nintendo real competition for the first time.

Fast facts

• Origins: American businessmen importing coin-operated amusements for US servicemen in occupied Japan, from the early 1950s.
• Incorporated: 1960, as Nihon Goraku Bussan.
• Became Sega: in the 1965 merger with David Rosen’s company, which produced Sega Enterprises.
• Name: SErvice GAmes.
• Arcade dominance: major force from the late 1970s through the 1990s.
• Console challenge: Master System (1985), Genesis/Mega Drive (1988), Saturn (1994), Dreamcast (1998).
• Platform exit: after Dreamcast, became third-party publisher (2001).

Arcade excellence

Sega’s arcade division produced landmark games:

• Frogger (1981): developed by Konami, licensed and distributed by Sega/Gremlin in North America.
• Out Run (1986): sit-down cabinet with steering wheel, impossible to replicate at home.
• Space Harrier (1985): into-the-screen shooter with hydraulic cabinet.
• After Burner (1987): fighter jet combat with rotating seat.
• Virtua Fighter (1993): pioneered 3D polygon fighting games.

These experiences drew players to arcades—the spectacle couldn’t be matched at home.

The console wars

Sega challenged Nintendo’s dominance:

Master System (1985)

• Technically superior to NES
• Failed to break Nintendo’s market lock in North America
• Successful in Europe and Brazil

Genesis/Mega Drive (1988)

• “Genesis does what Nintendon’t”—aggressive marketing
• Sonic the Hedgehog gave them a mascot
• Achieved near-parity with SNES in North America
• Won the 16-bit era in Europe

Saturn (1994)

• Strong 2D capabilities, complex architecture
• Struggled against PlayStation’s 3D focus
• Successful in Japan, failed elsewhere

Dreamcast (1998)

• Innovative online features, excellent library
• Couldn’t recover from Saturn’s losses
• Final Sega console

Home computer ports

Sega’s arcade games reached home computers:

• Conversions: Out Run, After Burner, Space Harrier appeared on C64, Spectrum, Amiga.
• Quality varied: some ports captured the spirit; others revealed hardware limits.
• Publisher relationships: US Gold, Activision, and others handled many conversions.

Legacy

Sega proved Nintendo wasn’t invincible. Their arcade philosophy—push hardware, deliver spectacle—influenced gaming’s direction toward impressive visuals and processing power. As a third-party publisher, they continue releasing games. But the console-maker Sega that challenged Nintendo is now history.

See also

• Frogger
• Konami
• Nintendo
• The 1983 Video Game Crash