History of Sega in the United Kingdom
From Sega Retro
Sega's relationship with Europe has always been stronger than that of Nintendo's, but their relationship with the United Kingdom is particularly notable. The UK is the home of Sega Europe's head offices.
The concept of home video game consoles didn't really kick off in the UK until the mid-1980s. The country already had a booming home computer market, established primarily by efforts from Sinclair, Commodore and Acorn, but dedicated systems were far less common. Many second-generation consoles were available, but the Atari 2600, for example, was far less popular in the UK than it was in the US. The majority of UK developers were focused on home computers.
Due to some exceptionally poor planning on behalf of Nintendo and their UK distributor, Mattel, the Nintendo Entertainment System, popular throughout Japan and the US, initially struggled to make an impact in the UK. When Sega showed up in early 1987 with the Sega Master System, they were quickly able to make inroads, establishing the SMS as the most popular console of its generation in the country.
The Master System was distributed by Mastertronic, who marketed the system aggressively. Their actions caused Sega to give them distribution rights in France and Germany, effectively establishing Sega Europe. By 1991 nearly all of Mastertronic's turnover was a result of Sega products, and this is often cited as the reason the Virgin Group invested heavily in the company (eventually buying it out-right). Sega would eventually take over the distribution wing of Mastertronic from Virgin, giving its top executives control over Sega Europe and the smaller UK operations, Sega UK.
Despite a transition between hobbiest and home computers to video game consoles towards the end of the 1980s and early 1990s, Sega's success in the arcade business prompted various companies to bring these games to the home on non-Sega platforms. U.S. Gold, Elite Systems and Activision all played their part in bringing popular arcade games to home computers, starting with the likes of Zaxxon and Congo Bongo in the early 80s and ending with more advanced games such as After Burner and Turbo OutRun.
Many of these home conversions were top-sellers - even more popular than their Master System counterparts in some cases. For the most part, these ports were created by small teams dotted around the country, and several would later be shipped to the US to accomodate for the home computer market there.
Early 90s Boom
With limited competition to deal with, the launch of the Sega Mega Drive in the UK was equally successful, if not more so than the Master System's launch. The Mega Drive largely dominated the market up until the mid-1990s, and though Nintendo had begun to make more of an effort with its SNES console, Sega were far more successful, running an iconic Sega Pirate advertising campaign and releasing extremely successful games such as Sonic the Hedgehog.
As well as catering for the Mega Drive, Sega Europe chose to keep caring for the Master System. The Sega Game Gear was also a reasonable success, though not as popular as Nintendo's Game Boy. Experiments such as the Sega Mega-CD and Sega 32X were less successful - the Mega CD being outsold by systems such as the Amiga CD32, a direct decendant of the Amiga computer range by Commodore.
There were a large range of Sega-related magazines launched around the early 90s - more than most other countries in the world.
Sega were top of their game until the mid-to-late 90s, after the launch of the Sony PlayStation. Sega's rival console, the Sega Saturn was an initial success, but suffered a similar fate to that of North America, with a game library unable to compete with Sony's. The Saturn was never wiped off the map completely, though played a distant third after the PlayStation and the Nintendo 64. The N64 in turn was a great deal less popular than the original PlayStation - Sony would go on to dominate the industry for more than a decade.
Sega opened a London attraction, SegaWorld London in 1996.
The Sega Dreamcast was launched in the UK in late 1999, and like most of the rest of the world, appeared to be quite successful in the first few months of sales. Inevitably the PlayStation 2 forced it into second place.