Sega facts for kids
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Trade name
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Sega |
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Native name
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株式会社セガ
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Romanized name
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Kabushiki-gaisha Sega |
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Formerly
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| Industry | Video games |
| Predecessor | Service Games of Japan |
| Founded | June 3, 1960 |
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Japan
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Area served
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Worldwide |
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Key people
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| Revenue |  ¥247.7 billion (2020) |
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Operating income
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¥14.8 billion (2020) |
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Number of employees
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3,459 (March 2023) |
| Parent | Sega Sammy Holdings |
| Divisions | List of development studios |
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Sega Corporation is a Japanese company that makes video games. Its main office is in Shinagawa, Tokyo, Japan. Sega also has offices in other parts of the world, like Sega of America in California and Sega Europe in London.
Sega is famous for its many video games and for once making its own game consoles. From 1983 to 2001, Sega created popular consoles like the Sega Genesis and Sega Dreamcast. Today, Sega focuses on making games for other companies' consoles, as well as for arcades and mobile phones. Its most famous character is Sonic the Hedgehog.
Sega's Story: From Arcades to Consoles and Beyond
Contents
- Sega's Story: From Arcades to Consoles and Beyond
- Early Days: Arcade Games and Fun Machines (1940–1982)
- Entering the Console World (1982–1989)
- The Genesis Era and Sonic's Debut (1989–1994)
- Challenges and New Consoles (1994–1998)
- The Dreamcast and Becoming a Software Company (1998–2001)
- Sammy Takes Over and Business Grows (2003–2015)
- Modern Sega: Mergers and New Directions (2015–Present)
- How Sega Works (Corporate Structure)
- Sega's Impact and Legacy
- See also
Early Days: Arcade Games and Fun Machines (1940–1982)
Sega started in 1940 as Standard Games in Hawaii. American businessmen Martin Bromley and Richard Stewart wanted to provide coin-operated fun machines, like slot machines, to military bases. After World War II, the company became Service Games.
In 1952, when slot machines became illegal in US territories, Service Games moved to Japan. They continued to provide machines to US bases there. The name "Sega" first appeared in 1954 on a slot machine called the Diamond Star. This name is short for "Service Games."
In 1960, the original Service Games of Japan closed. Bromley started two new companies to continue the business. These companies later merged in 1964. Around the same time, David Rosen, an American, started Rosen Enterprises in Japan, importing coin-operated games. In 1965, Sega bought Rosen Enterprises and became Sega Enterprises, Ltd.
Sega then focused on making its own arcade games. Their first big hit was Periscope in 1966. It was a submarine game with cool lights and sounds. This game was very popular in Japan and then around the world. It even helped set the price for arcade games in the US at 25 cents per play.
In 1969, Sega was sold to a company called Gulf and Western Industries. Sega kept making popular arcade games. In 1973, they released Pong-Tron, their first video game. Sega did very well during the arcade video game boom in the late 1970s. By 1979, their earnings were over $100 million. They made games like Head On (1979), Frogger (1981), and Zaxxon (1982), which was one of the first games with 3D-like graphics.
Entering the Console World (1982–1989)
In the early 1980s, the arcade business slowed down. Sega decided to start making home video game consoles. Their first console was the SG-1000, released in Japan in 1983. It sold well, but not as well as Nintendo's Famicom (known as the NES in the US). Nintendo had more games because they worked with many other game makers.
In 1984, Sega's leaders, David Rosen and Hayao Nakayama, bought the Japanese part of Sega. This helped Sega focus on its own path.
In 1985, Sega released the Mark III in Japan, which was later called the Master System in other countries. It had better graphics than the Famicom. However, it struggled to compete with Nintendo in North America. The Master System did become very popular in Europe and Brazil, where new versions are still made today!
Sega also continued to succeed in arcades. In 1985, they released Hang-On, a popular motorcycle racing game. The UFO Catcher (a claw crane game) was also introduced in 1985 and became very common in Japan. In 1986, Out Run became Sega's best-selling arcade game of the 1980s. These games helped bring arcades back to life.
The Genesis Era and Sonic's Debut (1989–1994)
By the late 1980s, Sega was a well-known name in games. They released their next console, the Mega Drive, in Japan in 1988. In North America, it was called the Genesis. It was a 16-bit console, meaning it was much more powerful than older systems.
The Genesis struggled in Japan against Nintendo's Super Famicom. But in North America, it became a huge hit! Sega's new CEO, Tom Kalinske, had a plan: lower the price, make games for the American market, and advertise aggressively.
A big part of the Genesis's success was the release of Sonic the Hedgehog in 1991. Sonic, a super-fast blue hedgehog, became Sega's mascot. His color matched Sega's blue logo, and his personality was inspired by Bill Clinton's "can-do" attitude. Sonic the Hedgehog was so popular that the Genesis started outselling Nintendo's Super Nintendo Entertainment System (SNES) in the US. For a few years, Sega was the top console seller in the US.
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In 1990, Sega also launched the Game Gear, a handheld console with a color screen. It was meant to compete with Nintendo's Game Boy. However, the Game Gear had a short battery life and not many original games, so it didn't become as popular as the Game Boy.
Sega also released the Mega-CD (called Sega CD in North America) in 1991. This was an add-on for the Genesis that let games use CD-ROMs, which could hold much more data. It also added better graphics and sound.
In the early 1990s, Sega continued to do well in arcades. They released games like Virtua Racing and Virtua Fighter (the first 3D fighting game). These games helped make 3D graphics popular. Sega also opened large arcades called Sega World and Joypolis.
In 1993, there was a lot of talk in the US media about mature content in video games. Sega created the first video game ratings system, the Videogame Rating Council (VRC), to help parents know what was in games. This led to the creation of the Entertainment Software Rating Board (ESRB), which is still used today.
Challenges and New Consoles (1994–1998)
Sega started working on its next console, the Sega Saturn, which was released in Japan in 1994. It was very popular there at first, especially with the game Virtua Fighter. However, Sega also released another add-on for the Genesis, the 32X, which was meant to be a cheaper way to play 32-bit games. This caused confusion for customers.
The Saturn was released early in North America in May 1995, before its planned date. This surprised retailers and made some of them upset. When Sony's PlayStation came out later that year, it quickly outsold the Saturn in the US. The Saturn struggled because of its high price, the confusing early launch, and its difficulty with 3D graphics compared to the PlayStation.
Despite console struggles, Sega's arcade business continued to thrive. They released successful arcade games like Daytona USA, Virtua Cop, and Sega Rally Championship. Virtua Fighter and Virtua Fighter 2 became Sega's best-selling arcade games ever. Sega also partnered with Atlus to create Print Club (purikura) machines in 1995, which let people take and print photo stickers. These became very popular in Asia.
By 1997, Sega's financial situation was getting worse. They stopped making the Saturn in North America to get ready for their next console. The Saturn sold about 9.26 million units worldwide, which was not enough to be a big success.
The Dreamcast and Becoming a Software Company (1998–2001)
Sega's last home console was the Dreamcast, launched in Japan in 1998 and in North America in 1999. It generated a lot of excitement, and games like Sonic Adventure were big hits. The Dreamcast was known for being ahead of its time, with features like online gaming.
However, Sony announced the PlayStation 2 in 1999, which created a lot of buzz. Nintendo and Microsoft also announced their next consoles. Despite good sales at first, Dreamcast sales began to slow down. Sega was losing a lot of money.
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In January 2001, Sega made a big announcement: they would stop making consoles after March 31, 2001. Instead, Sega would become a "third-party developer," meaning they would make games for other companies' consoles, like PlayStation and Game Boy. This was a huge change for Sega.
Isao Okawa, the head of CSK Corporation, had loaned Sega a lot of money. Before he passed away in 2001, he forgave Sega's debts and gave them his Sega stock, which helped the company survive this big change.
Sammy Takes Over and Business Grows (2003–2015)
In 2003, Sammy Corporation, a company that makes pachinko and pachislot machines, bought a large part of Sega. In 2004, Sega and Sammy merged to form Sega Sammy Holdings. Both companies continued to operate separately, but they were now part of the same big group. Sammy wanted to grow beyond its main business, and Sega needed financial help.
Sega continued to innovate in arcades, creating unique games like Derby Owners Club, which used memory cards and took a long time to play. They also focused on making games for Western arcades that appealed to casual players.
In the 2000s, Sega started to do better financially. They bought other game developers like Creative Assembly (known for Total War) and Sports Interactive (known for Football Manager). Sega also found success with games like Yakuza and Hatsune Miku: Project DIVA in Japan.
In 2008, Sega released its first mobile app, a version of Super Monkey Ball. As packaged game sales declined, Sega started to focus more on digital games for PCs and mobile devices. They also bought studios that specialized in mobile game development.
To make things simpler, Sega created separate companies for its different businesses. Sega Networks handled mobile games, and Sega Entertainment managed arcades.
Modern Sega: Mergers and New Directions (2015–Present)
In 2015, Sega Corporation was reorganized. Sega Games Co., Ltd. became the name for the home video game business, and Sega Interactive Co., Ltd. handled the arcade division. In 2020, these two companies merged again and were renamed Sega Corporation.
Sega Sammy Holdings also moved its main offices to Shinagawa-ku, Tokyo, to bring all its different companies closer together.
In recent years, Sega has seen good sales for games like Yakuza 6 and Persona 5, thanks to their efforts to bring these Japanese games to Western audiences. In 2019, Sega released the Sega Genesis Mini, a smaller version of its classic console.
In 2020, Sega announced "Fog Gaming," a platform that uses the unused power of arcade machines in Japan overnight to help power cloud gaming.
During the COVID-19 pandemic, Sega's arcade business faced challenges. In 2020, Sega Sammy sold most of its shares in its arcade division, though Sega's arcade games are still used.
Sega's home console games have been doing very well. In 2020, Metacritic named Sega the best publisher of the year. Many of their games received high scores. In 2023, Sega bought Rovio Entertainment, the company behind the Angry Birds series.
In 2023, some Sega of America employees formed a labor union called AEGIS. This was a big step for workers in the video game industry in the United States.
Sega also announced plans to bring back many of its classic game series, like Crazy Taxi, Golden Axe, Jet Set Radio, Shinobi, and Streets of Rage. This shows Sega wants to return to its "edgy" and "rebellious" spirit from the 1990s.
How Sega Works (Corporate Structure)
Since 2004, Sega has been part of Sega Sammy Holdings. Sega's main office is in Shinagawa, Tokyo, Japan. They also have offices in California (Sega of America) and London (Sega Europe). In other countries, Sega works with local companies to sell its games.
Sometimes, there have been disagreements between Sega's offices in Japan and other countries. Some people believe the Japanese executives made all the decisions, while others say the American executives had more influence.
Sega's Different Companies
Sega Corporation now develops and publishes games for major video game consoles. They have said they don't plan to make their own consoles again. They believe that selling hardware isn't the future for them.
Sega Fave Corporation (formerly Sega Toys) makes toys for popular children's shows. They also make products like the Homestar, a home planetarium. Sega Fave also develops and sells arcade games.
Sega used to run many arcades and bowling alleys in Japan. While they sold most of their arcade business in 2020, the Sega brand is still used in many arcades. Sega also has a company called DartsLive, which makes electronic darts games.
Sega has also partnered with an advertising company to create movies and TV shows based on Sega's games. They are working on projects for Shinobi, Golden Axe, and Crazy Taxi.
Making Games: Research and Development
Sega creates games through its own research and development (R&D) teams. One of their most famous teams is Sonic Team, which makes the Sonic the Hedgehog games.
Sega has also bought many other game studios, including Atlus, Creative Assembly, Hardlight, Relic Entertainment, Sports Interactive, Two Point Studios, and Rovio Entertainment.
In the past, Sega's arcade and console game development teams were separate and even competed with each other. In 2000, Sega reorganized its teams into nine smaller, independent studios. This allowed them to be more creative and try new things. Later, these studios were brought back into the main company.
Today, Sega still has first-party studios as part of its R&D division. Sonic Team is one of these. Other teams work on games like Phantasy Star Online 2 and mobile games.
Sega's Impact and Legacy
Sega is known for making a huge number of arcade games. They have developed over 500 games and 70 game series since 1981, which is a world record!
The Sega Genesis is often considered one of the best consoles ever. It helped break Nintendo's strong hold on the market and made sports game series popular. Sega also helped create the idea of a "street date" for games, where a game is released at the same time everywhere.
Even though the Saturn console didn't sell well, it is remembered for having many great games. The Dreamcast is also remembered for being ahead of its time, with features like online play and motion controls that later became common.
Some people have criticized Sega's business choices in the late 1990s. However, Sega has always been known for its creativity and for trying new things. In 2015, Sega's president, Haruki Satomi, said that Sega had "betrayed" the trust of older fans and hoped to rebuild the brand.
Sega has faced many challenges, but it has always found a way to continue. Today, Sega is in a strong financial position. The company has shown that it can adapt and keep making fun games for players around the world.
See also
In Spanish: Sega para niños
- List of Sega video game franchises
- Lists of Sega games
- Sega, S.A. SONIC
- Sega Technical Institute
