The word Sega is
not a Japanese word and instead is an abbreviation of the words, Service
Games. It was founded by Americans, even though the company headquarters
are in Japan and it contains a Japanese corporate culture. (Kent,
p.332).
In May 1952,
Service Games began; at that same time, laws restricting the use
of slot machines in the United States were passed. Marty Bromley
owned Service Games along with two other partners. These two partners
stayed in Japan with the business. In 1964, they added a new partner
named David Rosen. He already owned his own company. Rosen had moved
to Japan to run a new business redesigning existing photomat booths
which were extremely successful. Photo booth technology and Rosen
brought his business to the United States sometime after 1956. He
then imported Japanese games to the United States. Rosen's merger
with Taito and Service Games allowed him to become president and
CEO of Sega which was basically a jukebox company. In 1966 Sega
manufactured its first game; it was called Periscope, a submarine
simulation attack game. Sega began exporting games, as opposed to
importing games, and became very successful. Rosen established headquarters
for Sega in Hong Kong until 1976, and then partnered with Gulf and
Western. Sega became a subsidiary. In the 1970's Sega became a major
supplier of video games. After the crash of the arcade industry,
the CEO of Sega, Nakayama, decided to move into the area of home
products. One of their competitors, Nintendo, had already done so.
In 1986 the
first Sega system was released to compete with the NES (Nintendo
Entertainment System). The 16-bit Genesis home-console was released
in 1989, providing an experience most closely related to the true
arcade experience. At $249, this unit was better than any other
previous model. The Sega CD, which focused on the development of
many interactive movies, was developed in 1992. In 1994 Sega's 32-Bit
console called the 32X was released. Sega Saturn was released in
1995 and retailed for $399. In 1997 Sega merged with Bandai, and
in 1998 the merger was called off. In the years 1998 through 1999
the Sega Dreamcast was released. However, Sega was struggling financially
during this time. Sega of America president, Peter Moore, tried
to stabilize the company's financial base. Dreamcast sold one million
consoles in Japan and another two million consoles in America. In
September of 1999 Sega dropped the price of the Dreamcast to 149
dollars to help compete against the PlayStation 2. However, Sega
could not reach its goal of five million Dreamcasts and its production
was discontinued on January 24, 2001.
Sega adopted
two goals as of April 1, 2001. First, the company adopted a "multi-platform"
or "platform-agnostic" role or view of the hardware used
in the interactive gaming industry. Company executives decided to
develop content for multiple devices from cell phones right through
and including interactive video game systems. These would include
those systems from their competitors. Second, Sega decided to immediately
cease the manufacture of the Sega Dreamcast system. (Kent, p.589).
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