Sega AM2 | Code Like It's 198x

In 1994 Edge was let into a Sega building in Ohta-ku, Tokyo, to meet the man it called “Sega’s undisputed coin-op champion”. Yu Suzuki was general manager of Amusement R&D Department 2, AM2 for short: about 100 people inside an arcade division of around 600. His department had just made Virtua Racing and Virtua Fighter, and was finishing Daytona USA. For most of the 1990s AM2’s name on a cabinet meant the newest arcade hardware Sega had, and the games were built around it.

Fast facts

Parent: Sega.
Head: Yu Suzuki, from its beginnings until 2001.
Name: Amusement Machine Research and Development Department 2; “AM” for amusement, meaning arcade machines.
Before the name: Suzuki’s team made Hang-On, Space Harrier, Out Run and After Burner in 1985–87, before it was called AM2.
First AM2 game: Virtua Racing (1992), in Suzuki’s own account.
1990s: Virtua Fighter, Daytona USA, Virtua Cop, Virtua Fighter 2 and 3, Shenmue.
Later names: Sega-AM2 Co., Ltd. (2001–04), a subsidiary; then a Sega department again, renamed R&D2 in 2011.

Before AM2

Out Run is sometimes credited to “Sega AM2”, but no department of that name existed in 1986. Suzuki joined Sega in April 1983. “When I started in 1983 there was only one division — the amusement [coin-op] division,” he told Edge. His games of the mid-1980s came from a team he led inside it: Hang-On and Space Harrier in 1985, Out Run in 1986, After Burner in 1987, then Power Drift, G-LOC and the rotating R360 cabinet. Wireframe describes AM2 as “the division Suzuki set up within Sega during the second half of the 1980s”.

Some of that work was done in secret. Interviews from 1988 and 1996, translated by the website Shmuplations, recall that After Burner and Power Drift were developed at “Studio 128”, a separate office about five minutes’ walk from Sega’s headquarters. Suzuki had ordered that nobody enter without his permission, and one of his team remembered a staff member turning away Sega’s president, who had come to see how the game was going: “Sorry, no permission, no entry.” Sega Retro, which has traced the company’s internal departments, says the team became R&D 8 around 1988 and took the AM2 name around 1990, when Sega reorganised its arcade and console development.

Polygons

By the end of the 1980s Sega’s rivals were ahead in polygon 3D: Sega Retro notes that Atari Games and Namco were already making polygon games, Atari’s Hard Drivin’ among them. Sega’s answer was the Model 1 arcade board, which took three years to develop against about 12 months for a typical new board, Suzuki said. It used an NEC V60 processor, “actually pretty slow” at 16 MHz, and did its 3D maths on four Fujitsu signal processors. “Virtua Racing was the first game we produced,” he told Edge; the team grew from 10 people to 25 during the project. Suzuki researched the 1992 Ferrari and McLaren-Honda engines, talked to drivers and engineers and hired a Honda NSX for a while, and the finished game used about 120 physical parameters. Wireframe put it this way: where Hard Drivin’ “chugged along at a dismal pace”, Virtua Racing felt like “the helm of a dangerously quick Formula One car”.

After Virtua Racing, AM2 split into two teams. One made Virtua Fighter (1993), whose success, Wireframe wrote, “hinged entirely on one question: whether it was possible to render and animate full-3D humans on the Model 1 hardware”. The other made Daytona USA on a new board, the Model 2. General Electric had approached Sega with texture-mapping chips, the two companies went into partnership in August 1992, and building the board took a year, Suzuki said, with another year for the game. Model 2 drew almost twice as many polygons as Model 1, about 300,000 a second. He had wanted 40 linked cabinets for Daytona, “just like in a real race”; eight proved feasible.

Arcade and home

AM2 was an arcade department first, but its games also came home. It converted Virtua Racing to the Mega Drive, with the help of the SVP chip in the cartridge; “without it, I don’t think I would have even attempted it,” Suzuki said. When the Saturn went on sale in Japan in November 1994, Edge found Virtua Fighter the only worthwhile game on it and called it “a near-perfect conversion”. Virtua Fighter 2, Virtua Cop and Fighting Vipers followed in the arcades, as did Scud Race, led by Toshihiro Nagoshi. Computer & Video Games reported in September 1996 that Suzuki had unveiled Virtua Fighter 3 in Tokyo on 26 July; Sega Retro lists it among AM2’s games for the new Model 3 board.

Shenmue

AM2’s biggest project was a game for home. Suzuki began an adventure for the Saturn built around the Virtua Fighter characters; it moved to the Dreamcast and became Shenmue (1999), with around 300 staff and, Wireframe reported, a budget of $47 million. Edge listed the developer simply as “Sega (AM2)”.

Sega-AM2 and after

Sega restructured its development several times as its console business failed. According to Sega Retro, AM2 briefly merged with the CSK Research Institute in 2000, and in 2001 became a separate, wholly owned company, Sega-AM2 Co., Ltd. Edge credited it with Shenmue II, Virtua Fighter 4 for the PlayStation 2, the GameCube’s Beach Spikers and the arcade sequel OutRun 2. Suzuki was no longer in charge: Sega Retro records that Sega’s long-serving head of research and development, Hisashi Suzuki, became the company’s president in 2001, and that in 2003 Yu Suzuki moved to head his own Sega subsidiary, Digital Rex. Wireframe says he left Sega for good in 2011.

When Sega folded its studios back into the parent company in 2004, AM2 became a department again, and went on making Virtua Fighter 5, After Burner Climax and the arcade series Border Break. Sega Retro says the AM name was dropped in 2011, when the department became R&D2, though it still sometimes traded as AM2 and used the palm-tree logo it had carried since Virtua Fighter. By its account, the department merged with Sega’s Ryu ga Gotoku Studio in the early 2020s.

Sources

Edge issue 9, June 1994, pp. 45–49: “Yu Suzuki: Sega’s driving force” (AM2’s size and the amusement division; Suzuki joining Sega on 1 April 1983 and his title; Virtua Racing as the department’s first game and the split into two teams; Model 1’s development, processor and DSPs; the Virtua Racing research and staff; the General Electric partnership, Model 2 and Daytona; the Mega Drive Virtua Racing and the SVP chip; Suzuki’s game history from Hang On to Daytona GP).
Wireframe issue 43, September 2020, pp. 84–89: “Developer Profile: Yu Suzuki” (AM2 as the division Suzuki set up in the second half of the 1980s; Virtua Racing against Hard Drivin’; Virtua Fighter on Model 1; Shenmue’s staff and $47 million budget).
Edge issue 17, February 1995: the Saturn’s Japanese launch and Virtua Fighter.
Computer & Video Games issue 178, September 1996, p. 10: Virtua Fighter 3 unveiled by Suzuki on 26 July.
Edge issue 72, June 1999, p. 13: Shenmue, developer “Sega (AM2)”. Issue 110, May 2002, p. 55: Shenmue II. Issue 109, April 2002, p. 17, and issue 116, November 2002, p. 15: Sega-AM2 as developer of Virtua Fighter 4 and Beach Spikers. Issue 137, June 2004, p. 52: OutRun 2.
Shmuplations, “After Burner” (translated interviews from 1988 and 1996; web, secondary): Studio 128, its location and the president turned away. https://shmuplations.com/afterburner/
Sega Retro, “Studio 128”, “Sega R&D 8”, “Sega AM2”, “Sega-AM2 (company)”, “Sega AM2 (2004–2011)”, “Sega R&D2 (2011–2015)”, “Sega Interactive R&D2”, “Hisashi Suzuki” and “DigitalRex” (web, secondary): the department’s names and dates, the 2000–04 reorganisations, Scud Race, Virtua Fighter 3 on Model 3, the later games and the merger with Ryu ga Gotoku Studio. https://segaretro.org/Sega_AM2
Wireframe issue 43, September 2020, pp. 84–89, “Developer Profile: Yu Suzuki”: leaving Sega for good in 2011.