Sega

Sega Corporation (株式会社セガ) is an international video game software and hardware development company currently headquartered in Ōta, Tokyo, Japan. Originating in the mid-1940s, Sega rose to fame towards the end of the twentieth century, establishing themselves as one of the largest game companies of its type in the world. "Sega" is an abbreviation of Service Games, a name used until October 1965 when it became Sega Enterprises Ltd.. In 2000, the company officially became known as Sega Corporation.

Sega is perhaps best known for its success in the video game arcade industry, creating a large number of pioneering games and concepts which have shaped the industry into what it is today. It is also famous for its home video game consoles and 1990s mascot, Sonic the Hedgehog. At its peak in the early 1990s, Sega were often seen as the second largest player in the video game marketplace, being neck and neck with its main competitor, Nintendo, especially in the west.

Sega currently has operations all over the world, though it is split into three main offices—Sega of Japan, Sega of America (headquartered in San Francisco, California, United States) and Sega Europe (headquartered in the Chiswick area of London, England, United Kingdom), each of whom oversee operations in Japan, North America and Europe respectively. Sega Corporation belongs as part of a holding company, Sega Sammy Holdings, formed after a merger between Sega and Sammy in 2004.

Formation and Early Successes

The original logo to Service Games.

Sega started off life under the name of "Service Games", originating in Hawaii in 1945 when Irving Bromberg and his son, Martin Jerome Bromberg, formed a partnership with James L. Humpert to manufacture and distribute slot machines and other coin-operated devices. They called the partnership Service Games and based their operation in Honolulu.

Irving Bromberg, the father, brought to the young company a reputation for being an innovator in coin-machine technology; as the founder of the Irving Bromberg Co. (established in 1933), he brought some of the first vending machines to Brooklyn, Boston and Washington, D.C. He also founded a business known as Standard Games Co. in Los Angeles, Calif., in 1934; this company was not related to Service Games, which targeted military bases for distribution instead of Standard Games' civilian markets. However, he was aging and his son assumed much of the management of Service Games. Bromley and Humpert were employed in the U.S. Navy Shipyard at Pearl Harbor during World War II. The two men also worked in coin-operated enterprises that called upon the technical competence of the senior Bromberg.

The Service Games organization was left with a surplus of slot machines in 1952 due to the passage by the United States Congress of the Gambling Devices Transportation Act of 1951. The measure banned slot machines on military bases within the territory of the United States, forcing the company to look into other avenues to market and sell their products. In February 1952, Bromley sent Richard Stewart, a Service Games salesman, and Raymond Lemaire, a mechanic, to Japan to promote and expand sales of Service Games machines on U.S. military reservations.

Sega Enterprises Ltd. Tokyo office, as seen in 1965.

Expansion proved successful. A plant was constructed in Japan and markets were opened in Japan, Korea, the US-occupied Okinawa territory, the Philippine Islands and on the Southeast Asian mainland—anywhere where American troops were stationed in the Orient. Service Games also began selling its machines to U.S. servicemen's clubs in England and western Europe.

Meanwhile, American businessman and former Air Force officer David Rosen returned to Tokyo to establish Rosen Enterprises, Inc., in 1954, having fallen in love with Japan while being stationed there during the Korean War. Though the company was originally set up to export art, it stumbled upon a surprise hit when the company began to import coin-operated instant photo booths from America. The booths were very popular in Japan, business was booming, and Rosen Enterprises expanded by importing coin-operated electro-mechanical games.

By the early 1960s, David Rosen had a presence in 200 arcades, his imported mechanisms from Chicago and elsewhere doing successful in Japan. Looking to have his company grow, Rosen looked at nearby competitor Service Games. Meeting with Bromberg, the two entered talks to merge into one company. With Service Games already having plants built and ready for production, and with Rosen's presence in the Japanese arcade market, it made perfect sense for them to join forces. Rosen Enterprises and Service Games merged in October 1965 to become Sega Enterprises. Soon after the administrative changes, Sega began producing its own coin-op titles, which were going up against the already established American companies from which Rosen had been buying from when he was in the import business. Within three years, the new company released a submarine-simulator game called "Periscope" that became a smash worldwide. The company continued to publish more and more coin-ops, and on May 3, 1969, Gulf+Western purchased Sega, though the Sega name remained intact. This opened the door for Sega to enter other arenas in the arcade field, including a division for manufacturing pinball games, starting with Winner in 1972.

Flyer for Sega's first original coin-op, Periscope.

Being a company involved in the business of entertainment, it was only a matter of time before Sega would look into video game development. Seeing the success of Atari Inc.'s Pong, the early-to-mid 70's was a time of experimentation for video gaming, with Sega jumping on the bandwagon. Early efforts such as being the distributor of Pong-Tron, creating the licensed motorcycle game Fonz, and making the first fighting game Heavyweight Champ were just the beginning, with Sega becoming a part of the arcade scene, taking advantage of the booming market as it existed in the late 70's and early 80's. Sega made a small name for itself through the minor success of games such as Turbo, Zaxxon, Frogger and SubRoc-3D, the latter also being the first game to give the player a three-dimensional view. At the same time, Sega started expanding into the home console video gaming market, developing for such machines as the Atari 2600 and ColecoVision, delivering ports of their arcade hits.

Sega's success prompted the opening of an American division—Sega Enterprises—in the early '80s. This section of the company primarily dealt with the development of console software. However, Sega Enterprises was sold to Bally (a large pinball and arcade producer) in 1983, though Rosen did remain as President. The shares of the company Bally held were bought back by Rosen only a year later when, in 1984, the rest of Sega—which then consisted wholly of Sega of Japan—was sold to an outside group of investors, which included Hayao Nakayama, Shoichiro Irimajiri and the chairman of CSK, Isao Okawa. After this purchase, Sega as a whole officially became Sega Enterprises Ltd.

Home Console Manufacturing

SG-1000

Main Articles: SG-1000, SC-3000, SG-1000 II

The SG-1000.

With their growing presence in the gaming market, Sega decided that, instead of simply being an arcade and third-party home gaming developer, they would attempt to throw their hat in the ring of the home console manufacturing arena. As they began development of their first home console, the landscape of the video game marketplace was about to forever change. In North America, gaming giant Atari was in a downward spiral, precipitated by the failures of their Pac-Man port and the licensed E.T. The Extraterrestrial for the Atari 2600. Along with the glut of sub-par software from numerous gaming companies, the “Video Game Crash of 1983” was in full swing. Though many doubted the viability of the gaming market in the U.S., both Europe and Japan were still growing, an opportunity arising for someone new to take Atari's crown.

The SG-1000 was released in July 1983, and though it was a marginal success, it was unable to compete with another home console that came out at the same time: the Nintendo Famicom. A far more powerful system with the strength of Donkey Kong behind it, Sega was unable to compete. Though the system was redesigned to try and better match the Famicom, it was an uphill battle Sega could not win with their current system. In the end, only 75 titles were released for the SG-1000, in comparison to the over 1000 titles the Famicom eventually amassed during its reign as the number one console on the planet.

Unlike the Famicom, however, the SG-1000 also had a computer counterpart. Known as the SC-3000, the computer was compatible with the SG-1000 software, with the added benefit of having a keyboard and being upgradeable to allow printer and floppy disk access. Because of these advantages, the SC-3000 ended up selling more units than its console-specific model.

The cartridge-based system was also distrusted in other regions of the world including Australia, New Zealand, South Africa, and parts of Asia.

Mark III/Master System

Main Articles: Sega Mark III, Sega Master System

Knowing that the SG-1000 had no chance of overcoming the Famicom, work on another, more powerful video game system commenced. Called the Sega Mark III, the system was technically superior to the Famicom: it boasted a greater color palette and superior video and RAM capabilities than Nintendo's console. Primarily a cartridge-based system, the Mark III was also backwards compatible with the SG-1000 software, increasing the amount of titles available at launch. In addition, the system could also play Sega Cards, credit card-sized media that were cheaper to produce than cartridges. The cards could slide into the console, a format that had previously been available on the SG-1000 II.

With such strong hardware, Sega was certain that this could be the system to topple Nintendo's dominance. However, by the time the Mark III was released in 1985, Nintendo had already acquired over ninety percent of the Japanese gaming market. Along with the release of Super Mario Bros., the system was able to strengthen their hold on the market. One important factor that also prevented the Mark III from gaining ground was the exclusivity agreements that Nintendo had with the majority of third-party developers at the time. By forcing companies to sign agreements with Nintendo to only produce content for the Famicom, very few game software developers were available to develop for Sega's 8-bit system.

Sega Master System Model 1

Regardless, Sega began to look towards the highly coveted markets of the west, including North America. The market, having a swift recovery due to the Nintendo Entertainment System (a renamed, redesigned Famicom), was ripe for competition. Knowing that the Mark III brand name would make little sense in that market, an effort was made to redesign the system, just as Nintendo had done for the Famicom. The result was the Sega Master System, released in June 1986 in the United States. Retailing for $200, it faced the same stiff competition from Nintendo as it did back in Japan, as the $159 NES had established itself for nearly a year at that point. With only two companies offering third party support, the only real draw to the system was the exclusive Sega software, along with such gimmicks as the 3-D Glasses peripheral.

Though the system fared better than any other competitor against Nintendo (such as the Atari 7800), slow and ever-declining sales forced Sega CEO Hayao Nakayama to withdraw funds from supporting the Master System in the United States, instead selling the distribution rights to Tonka. The toy company, who had never before been a part of the video game market, knew little of the ins-and-outs, and in the end continued to let the Master System flounder.

However, Sega's decision to sell distribution rights in Europe was a completely different story. In early 1987, Frank Herman of budget software publisher Mastertronic spotted that Sega had no UK distributor for the Master System range. As a result, the company aggressively worked to sell the platform that year; as a result, they were then appointed as distributors in France and Germany and the modern incarnation of Sega Europe was born. It resulted in the Master System outselling its rival, the NES throughout the 8-bit era and was cited by some as Virgin Group's reason for investing in the company (and later buying it outright.) By 1991 nearly all of Mastertronic's turnover, and certainly all the profit, came from Sega-related business. Although staff recruitment actually rose, it was all for Sega operations. As a result, nearly all the staff moved over to Sega when they took over the business from Virgin and only a handful of games programmers stayed with Mastertronic's software publishing wing (quickly renamed Virgin Interactive Entertainment.) After the Sega takeover Frank Herman became deputy Managing Director of Sega Europe and Mastertronic co-founder Alan Sharam was named Managing Director of Sega UK.

Even though their attempts in the home console market were not as successful as they had hoped, Sega was able to do extremely well in the arcade market. OutRun, Shinobi, Space Harrier and After Burner were only a few of the titles that were cementing Sega's place in the video game world, accepting quarter after quarter with no qualms. Even though these games were released exclusively in the home market on Sega hardware, unfortunately the success on one front was unable to flow into the other. Even exclusive games such as the Alex Kidd series (Sega's first mascot and intended Mario-killer) were unable to draw in new users.

David Rosen (middle) meeting with Stefano Arnhold of TecToy.

While Nintendo had a stronghold on Japan and North America, the rest of the world was not quite as defined. In Europe, Nintendo had neglected to market their system as they had elsewhere, the gaming scene over there focused more on the home computer market, with such platforms as the Commodore 64 and the ZX Spectrum being dominant. Sega saw this opportunity and became heavily involved in an aggressive marketing campaign targeting regions where Nintendo wasn't selling anything. This allowed Sega to actually beat Nintendo in terms of number of units sold in the whole of Europe, having third party support from gaming companies that wouldn't dare release the same game in North America.

Perhaps as a result, Sega of Japan decided to rerelease the Mark III in Japan under the Master System brand, along with a built in FM Sound Unit originally released as a peripheral to the Mark III. Even so, the rebranded system was unable to penetrate the Japanese market, still being a distant second place to the Famicom. The only other region that emulated the success the Master System felt in Europe was Brazil, where Tec Toy gained the rights to distribute Sega's console in 1989. Once again benefited by the lack of competition from Nintendo, the Master System soon became the console of choice in South America, with new models of the hardware being released years after Sega stopped supporting the system in the rest of the world.

Mega Drive/Genesis

Development and Release

Main Article: Sega Mega Drive

Sega Genesis Model 1

Though the Master System had done well in Europe, it was clear that the system was not able to have the sort of presence across the rest of the world as Sega would have hoped, especially since most of their success was simply taking hold of markets Nintendo had neglected. Knowing that the age of the 8-bit generation was coming to an end, Sega once again looked into creating a successor to their home console system, hoping that this would not only put them on the map, but take it over completely.

Looking at the string of successes on the arcade System 16 platform, Nakayama decided that their follow-up system should also be based on 16-bit hardware. Initially codenamed “Mark V,” the name would eventually change to Mega Drive, the name meant to emphasize the positive aspects of the platform: “Mega” for the superiority of the console, and “Drive” for the speed it possessed. Knowing that Nintendo was taking its time in creating a 16-bit successor to the NES/Famicom, Sega hoped that the technological superiority of their system, along with an early lead, would be enough to knock Nintendo from the top spot and gain traction before the 16-bit wars would truly begin.

Released in Japan on October 29, 1988, the console launched with sequels to already established franchises: Space Harrier II and Super Thunder Blade. Though it wouldn't be long before the system would be host to some of their established home franchises from the Master System days such as Phantasy Star II, many early titles focused exclusive on trying to emulate their success in the arcade sphere. To people looking at the home market, though, it was clear that the Mega Drive's immediate competition was NEC's PC Engine (also known as the TurboGrafx-16 in the west). While Sega was winning the war for second place, the dominance of the Famicom still continued, superior hardware not being the key to reaching the top.

Gearing up for the launch of the system in the United States, Sega decided to walk away from their partnership with Tonka, looking elsewhere for an experienced member of the industry to help with distribution. Talks soon began with Atari but, in a move that echoed the aborted Atari/Nintendo partnership, Sega decided they would distribute the system themselves. Having to delay their initial announced release date, the company was also forced to change the name of the console, since the term “Mega Drive” was already trademarked in the U.S. In select markets on August 14, 1989, the Sega Genesis was finally released, with a nationwide rollout that September.

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Al Nilsen, Vice-President of Sega of America, showing off Michael Jackson's Moonwalker.

Knowing they had their work cut out for them, Sega hired Michael Katz as the new President of Sega of America, only one month after the console had come out. Given the set goal of selling one million Genesis units, Katz knew that their current line-up wasn't enough, especially since Nintendo still had their grasp on third-party support. Instead of relying on established names in the video game industry, he instead looked towards licensing deals with well-known personalities in pop culture. One of those approached was Joe Montana, who would become the face of the appropriately-titled Joe Montana Football. Though future installments of the series would be done by BlueSky Software, the first was worked on by none other than Electronic Arts, who was working on what would become the first successful John Madden Football at the same time. This partnership led to EA offering their support to the Genesis, making the system a powerhouse when it came to sports titles.

Soon, other prominent deals were forged, including Pat Riley Basketball, Tommy Lasorda Baseball, and Evander Holyfield's "Real Deal" Boxing. But perhaps the biggest coup was Sega getting the rights to create a game based on the biggest pop star of the era, Michael Jackson's Moonwalker. With these names in place, Sega began the first of their aggressive marketing campaigns, targeting their competition with the slogan “Sega Does What Nintendon't.”

In Japan, development to expand the Mega Drive's software lineup continued, knowing that people wanted more than just an arcade machine for a home platform. Creating such varied titles as Shining in the Darkness and Castle of Illusion Starring Mickey Mouse, the company wanted to prove that players could experience a variety of different genres on a Sega system. Sega also partnered with various home computer companies like Tecnosoft (Thunder Force, Herzog Zwei), Telenet Japan (Valis, Granada, among many others), and NCS (who would start their flagship Langrisser franchise and various other games like Shove It!) to give the console support from that market. By the time the platform was ready to be released in Europe for the winter of 1990, there were plenty of titles to insure a steady stream of quality software over the next few months. By building on to the success the Master System was able to achieve in the region, the Mega Drive was able to repeat that performance. Europe's success was fueled by their own unique advertising strategies, including the long-running “To be this good takes AGES / To be this good takes SEGA.”

Sonic the Hedgehog

Main Article: Game Development:Sonic the Hedgehog (16-bit)

Boxart to the original Sonic the Hedgehog.

Even though the Mega Drive was a hit in Europe, the system was still not able to pick up the steam Sega was hoping for in Japan and North America. Even though it was doing better than the other competitors of Nintendo, the house that Mario built was still the undisputed champion, made clear by the immediate success of the Super Famicom once it was released in Japan in 1990. Understanding the strength of a corporate mascot and how it could help define a brand, Sega began looking internally, starting a contest to come up with their version of Mario and Mickey Mouse. Though Alex Kidd was often thought of as Sega's mascot, the franchise did not define the company, as the games were always met with lukewarm success.

Making clear what they were looking for, the search was on, with numerous development groups within looking to create that iconic character that would thrust Sega into the stratosphere. One of the men who took up this call was Naoto Ohshima. Working within Sega's AM8 division, he came up with a number of character designs, including a Bart Simpson-esque human, a rabbit, a patriotic wolf, and a human character that would eventually be transformed into Dr. Eggman. However, it was a blue hedgehog originally named Mr. Needlemouse that would prove the favorite. Becoming Sonic the Hedgehog, Ohshima teamed up with programmer Yuji Naka, the two having previously worked on the Phantasy Star titles. Pitching their ideas to Sega of Japan, it wouldn't take long before the project would be approved and production went underway. With Hirokazu Yasuhara pulled in to help design and direct, all the pieces were in place.

When news reached Sega of America about the project, they immediately began to take steps to try and alter the course. Initially looking for an outside designer to create a character they felt better suited American tastes, they were afraid the game would bomb. Michael Katz, when he first learned of Sonic, couldn't fathom how to market a game based on a hedgehog, an animal that hardly anyone in the United States had heard of. Even though they looked for alternatives, the path was set at Sega of Japan, the company banking on the success of the game.

The original core members of Sonic Team, 20 years later.

In November 1990, Hayao Nakayama approached Tom Kalinske, former president of Mattel, to be in charge of SOA. Taking the job, Tom took some time to get his bearings, looking over the industry and determining the strengths of what Sega had to offer. In March, 1991, Tom, accompanied by Shinobu Toyoda, went to the Sega of Japan brass to present his plan. Knowing that Nintendo would come out of the pen with guns blazing, the first thing Kalinske wanted to do was drop the price point of the Genesis to $149.99, making it fifty dollars cheaper than how much the Super Nintendo would be released at. Combined with even more aggressive advertising directly attacking Nintendo, Kalinske also knew that Sonic, the way it was turning out, would be able to go up directly against Super Mario World. Because of this, he wanted the current pack in title—Altered Beast—to be replaced by Sonic come the holiday season. Nakayama, at hearing this plan, went mad, saying they were crazy to suggest to take a loss on the hardware while at the same time including the one game that would have such a high profit margin. Storming out of the office, however, he paused at the door saying that if they felt it was the only way to beat Nintendo, to go ahead and do it.

With the game localized by Sega of America (much to the chagrin of Sonic Team), the original Sonic the Hedgehog was released in the United States on June 23, 1991. Almost immediately, the game became a success despite early efforts to downplay the game. Partnered with an advertising campaign in the fall and winter of 1991 that portrayed Sonic as the hip, cool alternative to Mario, units began moving at an incredible rate. Released in Japan a month later, the game was only a moderate success in its native country, unable to topple Nintendo's dominance. However, the strength of the game, along with the advertising strategy, was enough for Sega to begin taking the market by storm. Coupled with Nintendo being unable to make exclusivity agreements with third-parties anymore (a legal decision finding the practice to be unlawful), the market was able to open in a big way, with more companies deciding to develop games on the once-fledgling 16-bit console. By April 1992, Sega had secured sixty percent of the 16-bit market share in the west, and in November of that year, Sega would achieve its biggest success, with Sonic the Hedgehog 2 selling over six million units. Even in 1994, the Mega Drive was still responsible for over fifty percent of all 16-bit systems sold. Though Nintendo would catch up by the time the 16-bit console wars ended, Sega was always able to maintain a slight edge over Nintendo, at least in the United States and Europe, the two juggernauts being neck and neck through the mid-1990s.

Sega v. Accolade

Main Article: Sega v. Accolade

In 1992, Sega took game publishing company Accolade to court over what they called copyright infringement. Taking note of the game piracy rampant in Asia, along with systems that companies such as Nintendo had done in the past, Sega incorporated into the Mega Drive a failsafe to prevent unauthorized software from being played. In order for software companies to be allowed to develop for the system, each would have to pay a licensing fee, which would then grant them the string of code to allow the “PRODUCED BY OR UNDER LICENCE FROM SEGA ENTERPRISES LTD.” to appear on screen whenever a game was turned on, at the same time letting software publishers to, among other things, allow the Sega Seal of Quality to appear on the boxart. This was all done in an attempt to make sure that only authorized, compatible software was playable on the system, as opposed to a pirate copy of the game.

Wanting to develop software for the system but not wanting to go through the process of licensing, gaming company Accolade instead reverse engineered the code necessary to allow their software to run on a Mega Drive. Even though the start up message would appear when turned on, the packaging for each title made it clear that it was not authorized by Sega. When Sega sued Accolade, the gaming giant won the initial injunction, forcing Accolade to take their product off store shelves. In appeal, however, the court ruled in favor of Accolade. In response, the two companies reached an out of court settlement, which also resulted in Accolade becoming an official licensee of Sega. Even though it was determined that Sega could hold no legal right to bar people from releasing software without a license, the licensing requirement continued, and was standard practice not only for Sega's later systems, but also the systems of Nintendo, Sony and Microsoft.

Videogame Rating Council

Main Article: Videogame Rating Council

The original cover to Night Trap.

Enjoying the success and growing market share based on their hit franchises, Sega continued to expand their horizons, looking for ways to entice both consumers and developers to jump in on the Sega bandwagon. Knowing that Nintendo had a sometimes strict policy regarding the objectionable content allowed in their releases, Sega took a more liberal approach to what they allowed published on their various systems and add-ons. Games such as Splatterhouse 2 were allowed to maintain their violent content as long as they issued some sort of parental warning on the packaging. As family rights groups began to become more concerned about the content of gaming media aimed at their children, Sega took the liberty to create the Videogame Rating Council.

Based on the MPAA rating system, games were split up into three main categories—GA, MA-13, and MA-17. One of the first games to use this rating system was the port of the controversial arcade fighter Mortal Kombat. Though highly successful, the concept of porting the game to home consoles proved problematic, Nintendo forcing Midway to change all instances of blood into sweat, as well as removing the violent fatalities. While there was a level of censorship in the Mega Drive version, the game received an MA-13 rating, when at the same time it was revealed there was a secret code that allowed the violence to be restored. Even though the Super Nintendo version was better on a technical level, the Mega Drive version outsold it based on this one factor alone.

Controversy on video game violence reached a head, however, with the release of Night Trap, an FMV game released by Digital Pictures on the Sega Mega-CD. Full of vampires and women dressed in nightgowns, the game caused an uproar, prompting Congress to hold hearings on the matter even if they didn't fully understand what the player was meant to do in Night Trap. This prompted the entire game industry to look into regulating themselves with a rating system as Sega had already done. Though the company did try to make their system an industry standard, in the end it was decided that the independent Entertainment Software Rating Board would be formed.

Console Add-Ons

Main Articles: Sega Mega-CD, Sega 32X

The Mega Drive Model 2 With Mega Cd Model 2.

Looking to continue their success while also trying to revolutionize the gaming market, Sega began exploring numerous avenues as to how they could not only extend the life of the Mega Drive, but make any peripheral a must-have purchase. The most successful of these were the Sega Mega-CD, an expansion that would allow optical media to be played on a standard Mega Drive. Though audio CDs were more than common place by this point, and laserdisc-based games had been experimented with, the idea of having a CD-based gaming system were still largely unexplored.

Though a CD add-on existed for NEC's PC Engine, Sega wanted to make sure that the games on their system would demonstrate what could be done that was impossible with the Mega Drive on its own. FMV-based games such as Double Switch, Sewer Shark and the Make My Video series showcased the video and audio capabilities of the system, while games such as Sonic the Hedgehog CD demonstrated the opportunities existing franchises could take advantage of with expanded storage capacity and graphical enhancements. Even titles that had already been released on the Mega Drive, such as Earthworm Jim by Shiny, were rereleased with enhanced audio and additional levels. Along with being the starting point for such critically acclaimed franchises such as the Lunar series, on paper it seemed like the Mega CD should be a guaranteed success, in light of the heights the Mega Drive was doing. However, the system failed to catch on, partly due to the price and partly because of the game line-up. With most titles either being FMV games or simply “enhanced” ports of current Mega Drive titles with only marginal improvements in sound, many gamers didn't see the need to expand their current Sega console.

The American box to the 32X.

Even though the Mega CD stagnated in Japan and fared only slightly better in the rest of the world, ways to expand the capabilities of the core Mega Drive were always on the table. While most were released exclusively in Japan, such as the Mega-CD Karaoke and the Sega Mega Modem (the latter of which was used for the Sega Meganet, an early precursor to online console gaming), others were supported worldwide, such as the Sega Channel. Launched in 1994, the cartridge add-on allowed anyone with cable television to play games through the subscription service. With demos, full games, and even some titles exclusive to subscribers, the Sega Channel lasted in the United States until 1998, discontinued after Sega stopped supporting the console.

However, perhaps the most infamous add-on experiment to the Mega Drive was the Sega 32X. Conceived of in early 1994 by Hayao Nakayama, the CEO wanted something to be ready for Christmas of that year to serve as a transition between the Mega Drive and the 32-bit console that would ultimately become the Sega Saturn. During discussions with Tom Kalinske, his assistant Joe Miller, and various members of the Sega of Japan board, it was proposed by console designer Hideki Sato that a slightly enhanced version of their popular 16-bit unit be released, with an enhanced color pallet and an added 32-bit processor. Hearing this, Miller suggested an alternative—instead of having an entirely new system which was barely an evolution of the first, why not create a device that could be attached to current hardware to provide those features? Though at first resistant to the idea, Nakayama decided to back it, having Sato work with Miller and the rest of Sega of America to develop the system, this being the first time the two sides of the company collaborated on potential hardware.

The original Mega Drive with Sega CD, 32X, Modem and Karaoke peripherals.

Once released, the system fell into obscurity almost from the beginning. Though it did exactly what it advertised, the attachment cost far more than what was originally intended. That, coupled with the impending release of the Sega Saturn, soon found the hardware without a purpose, most third-parties ignoring it entirely to focus on development for the true successor to the Mega Drive. Because of its non-existent impact on the market, plans for the Sega Neptune were immediately scrapped. Similar to how the CDX was a combination of the Mega Drive and Mega CD, the Neptune was meant to combine the Mega Drive and 32X, at the same time being what Nakayama originally envisioned. Though working prototypes existed, the system would never see the light of day. In the end, only thirty-four games were released on the peripheral (six of those being for the Mega CD 32X), the failure of the system just the first of many obstacles Sega would face in the coming years.

Sega Saturn

Main Article: Sega Saturn

The 32-bit Sega Saturn.

Even as Sega basked in the success of the Mega Drive, both sides of the Pacific were looking ahead to the future, knowing that the 16-bit era, just as the 8-bit one beforehand, would have its time to end. Sega of America was the first to think about what the future would hold, having formed a working partnership with Sony during the Sega CD era. As the two would work together on producing titles for the CD add-on, it wasn't long before the two sides starting talking about the future of gaming. Mickey Schulhoff and Olaf Olafsson of Sony spoke with Kalinske about the possibility of a joint venture between the two companies to pool resources and create the next generation of consoles, though the plan was vetoed by Sega of Japan before it could fully get off the ground.

Instead, Sega of Japan's R&D division began their own internal efforts into deciding just what the next generation of Sega would provide. Exploring their options, work began on two separate consoles, though only one would reach a point where it was ready for the masses. The first of these, codenamed Project Jupiter, was intended to be a cartridge-based system, similar to what the Nintendo 64 would become. The second, known as Project Saturn, is what eventually evolved into the final Sega Saturn. Work on both of these projects began in 1993, and while Sega of Japan informed Sega of America of the Saturn's progress, they kept the existence of the Jupiter from their western counterparts.

This secrecy was just yet another example of the growing rift between the two sides of Sega Enterprises. Upset that their successes nowhere near matched their American counterparts, Nakayama began to constantly compare the two in upper management meetings. The CEO would ask his peers time and again why they couldn't replicate what the U.S. was doing, especially since they had been around longer. This animosity continued on, with those working at SOJ determined to prove themselves. At the same time, SOA was contacted by Jim Clark of Silicon Graphics Inc, who had just purchased a company with technology they felt would be perfect for a video game console. Interested, SOA contacted SOJ, telling them about the chipset SCI was working on. Flying over, they instructed the company to improve certain aspects, and once they did so a second meeting was arranged. Still deemed unsatisfactory by Sega of Japan, SCI turned elsewhere, eventually their hardware becoming part of the Nintendo 64.

With SOA eventually learning of the Jupiter's existence, it looked for a moment that the system would be the way Sega was going to take things, even ordering the Sega Technical Institute to develop the next Sonic game on the proposed hardware, though no specs were even solidified. It wouldn't be much longer before the project was canceled, spurred by a hardware failure on the part of NVIDIA. Instead, all focus moved to the Saturn project.

File:VirtuaFighterJPArcadeFlyer1.jpg

'The original Virtua Fighter, which played a key role in the Sega Saturn's success in Japan.

The project was once again led by Hideki Sato, who was in charge of the 27-member “Away Team,” responsible for the design of the Saturn. Initially designed as a 2D powerhouse, the final version of the hardware sported dual Hitachi processors, to also allow 3D capabilities, supposedly come about by a demand from the Sega brass in response to what the Sony PlayStation was purporting to be. Either way, Sega wanted to make sure their console appealed to every region of the word, not satisfied with having their systems only succeed in specific regions, such as the Master System in Europe and the Mega Drive in the United States.

In November 1994, the Sega Saturn was released in Japan, only six weeks before the PlayStation and with very few release titles. Almost immediately, third party developers were put off by the difficulty of programming on the system. With no Developer's kit to speak of and having its design based on quadrilaterals as opposed to the industry standard triangle, many developers turned to Sega's competitors to design games. However, Sega still had a trump card up their sleeve, at least in Japan—the arcade market.

Even though their home systems hadn't made much of a dent in Japanese consumers, the string of arcade titles helped keep Sega relevant in their homeland. Though Virtua Racing was actually the first title on Sega's new Sega Model 1 arcade board, it was 1993's Virtua Fighter that became a cultural phenomenon in Japan. The brainchild of AM2's Yu Suzuki (who had been responsible for earlier titles like Hang-On and Space Harrier), it met with immediate success. Followed with Virtua Fighter 2 only a year later, Sega knew the best way to support their 32-bit system was to port their biggest arcade hit. Having Virtua Fighter be one of the launch titles, the Saturn was able to establish itself in Japan in ways the Mega Drive was never able to accomplish.

Meanwhile in the United States, Sega of America was busy planning the launch of the system stateside. Originally announced to be released on “Saturnsday” (September 2, 1995), the launch date was unexpectedly pushed up five months ahead of schedule, the move a direct response to Sony's PlayStation intending on being released only one week after the September release of the Saturn, with a price tag one hundred dollars cheaper. Though the pieces for a successful launch weren't in place, the Saturn was rushed out for select retailers, hoping the lead time would ensure Sega's place in the home gaming world.

Only 80,000 Saturn's were sold before the release of the PlayStation, while the release of Sony's console became an instant hit, beating the Saturn's share in the North American market in a matter of days. Ironically, the notion of using hip advertising aimed at a demographic that wouldn't otherwise have played a videogame helped out Sony, Sega's American marketing instead becoming a surreal mixture of imagery that attempted to stay cool and attack the competition, but instead had an almost creepy feel that no longer talked of the merits of the games.

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The greatest Sega Master, Segata Sanshiro.

Back in Japan, while the Saturn was not doing the numbers of the PlayStation, it was still doing phenomenal for a Sega console in the region. Because of Sony's preference for 3D over 2D, many two-dimensional games were able to find a home on Sega's system, including a number of RPGs that appealed to the Japanese market. Coupled with the continued porting of other AM2 franchises such as Daytona USA and Virtua Cop and original franchises including Sonic Team's NiGHTS Into Dreams, the Saturn was able to find its niche. Their appeal only grew when Sega found the perfect advertising pitchman—Segata Sanshiro. Played by Hiroshi Fujioka, the character was a Judo master who would seek out those who weren't playing a Sega Saturn, attacking them until they did so. For the first time that decade, Sega of Japan proved themselves, with the number of Saturn titles sold actually outnumbering the number of PlayStation titles for an extended period of time, in spite of the PlayStation's larger user base.

In 1996, Tom Kalinske left Sega of America, replaced by Bernie Stolar, who had previously worked with Sony and was involved in the PlayStation's success. Once in charge, Stolar prevented numerous titles from Japan's Saturn library to be released in the United States, the majority of those being RPG titles, believing they were too ingrained in the Japanese culture and would not appeal to American audiences. After looking over the state of the Saturn in the west, Stolar began to push Sega into looking towards the future, designing a new console to take an even bigger jump against the competition. In 1997, Stolar made an unexpected move, stating publicly that the future of Sega did not lie with the Saturn. Even though the Saturn was still doing well in Japan, Sega as a whole began the process to research and develop what would become Sega's last gaming console.

Sega Dreamcast

Main Article: Sega Dreamcast

Promotional imagery of a near-final Sega Dreamcast.

Though rumors of a new system had begun back in 1996, talk grew in 1997 even amid the backdrop of a failed merger between Sega and Bandai. Just as had been done before the Saturn was announced, Sega pursued two separate options—the Sega of America-led “BlackBelt,” and the Sega of Japan-led “Dural.” It was eventually decided to drop the “BlackBelt” and focus on the Japanese-developed system, which changed its codename to “Katana.” The goals of the system were simple: to be easy to develop, to be technologically superior, and to also regain the Sega brand trust in the United States, following the performance of the Mega CD, 32X, and Saturn.

Wanting to provide greater freedom with development, Sega partnered up with Microsoft, having a modified version of Windows CE be just one developing choice for games on the system, which would also allow easier PC ports for the platform. The system was officially announced by SOA's Bernie Stolar in May 1998, where it's final name was revealed to the world—the Sega Dreamcast. At the same time, some of the revolutionary details of the system were expanded upon for the gaming press, including the screened memory card known as the Virtual Memory System, which would later be renamed to the “Virtual Memory Unit” because of the pre-existing use of the VMS acronym.

With the Dreamcast gearing up for its Japanese debut that December, one move Stolar pushed was that Sega as a whole discontinue support of the Saturn, including in Japan where it was still a viable gaming option. Though Japan was resistant to the idea, they did throw their all into the production and advertising of the Sega Dreamcast, including ending the Segata Sanshiro advertising campaign, having the character sacrifice himself to protect Sega and the Dreamcast in his final television commercial. However, even with Virtua Fighter 3tb as one of the launch titles, the system arrived with lackluster sales, as both the consumer market and third-party software companies did not see the need for the system to be released just yet, echoing Sega of Japan's initial resistance.

With some analysis fearful of Sega's position, it was feared that the American launch would be a repeat performance. Having the western launch not happen until September 9, 1999, however, it gave plenty of time for Sega to prepare themselves. Moving away from the advertising they had done in the Saturn years, once again promotion focused on the games, offering them up as not only hip but technologically superior to anything out there. The date of the release was able to become a marketing ploy, as well as the “It's Thinking” tagline, meant to also emphasize the built-in online capabilities of the system, the first home console to be ready for the Internet right out of the box. Even though Stolar was let go right before the release of the system, the huge publicity push behind the Dreamcast allowed it to be an instant success. With games such as Namco's Soul Calibur, the continued legacy of Sega's sports division with NFL 2K and the return of the gaming icon that had allowed the Mega Drive to be a success in the first place, Sonic Team's Sonic Adventure, the system ended up taking in $97 Million USD on its first day, taking into account not just system sales but peripherals and games. This amount set the record for the most amount of money spent on entertainment in a single day, beating out the previous record holder, Star Wars Episode I: The Phantom Menace.

Promotional art from Shenmue.

However, the success was not to last. Even with a string of high quality arcade ports and new franchises being set up, the console was unable to completely overcome the Sony monolith. With no support from companies such as Square Enix and Electronic Arts, there was a gap in the system's library that was painfully noticeable. Newer game franchises such as Jet Set Radio and Space Channel 5, though critically acclaimed, failed to catch on new Dreamcast adopters. Things were made noticeably worse when Sega invested millions into Shenmue, a game designed from the start to have numerous sequels. Following the story of Ryo Hazuki, the game was a hybrid of different genre's with an incredible amount of attention to detail. The first game's budget alone was $47 Million USD, becoming the most expensive title produced in history. Headed by Yu Suzuki, Sega was willing to take the chance on the game, based on his numerous successes in the arcade market. However, while also a critic favorite, the title and it's eventual sequel ended up becoming a cult classic and not the phenomenon they were hoping for, unable to earn back its production budget.

The financial woes of Sega became more and more apparent, the company having suffered a loss back during the Japanese release of the Dreamcast that simply added to the losses they had been suffering through the 32-bit era. In an attempt to stall their financial woes, the decision was made for the various development studios to separate from Sega. While they would still create material for the Dreamcast, they would become semi-autonomous, with Sega as a whole becoming Sega Corporation.

Perhaps the final nail in the coffin for Sega's time in the hardware market was the impending release of the PlayStation 2. Though Sega briefly considered making the optical drive in the Dreamcast support DVD's, they opted instead to use the proprietary GD-ROM format, as it was a cheaper alternative. However, as the hype for the PlayStation 2 began, Sony started to make promises as to the technological capabilities of the system, promising the original PlayStation experience but far greater. Featuring a DVD-Drive, it was also poised to be the cheapest DVD player on the market. Soon, both consumers and developers across the globe started to back away from the Dreamcast, having a “wait and see” attitude, market speculation leaning once again to the electronics giant Sony.

Unable to stay afloat if they continued as they were, Sega announced on January 31, 2001 that they were ceasing production of the Dreamcast. Though games were still being developed for the console by the company, the writing was clearly on the wall, with hyped titles such as Phantasy Star Online and Sonic Adventure 2 unable to save the system. With the PlayStation 2 becoming another instant hit and eventually one of the most successful consoles of all time, Sega bowed out of the hardware business, with NFL 2K2 being the last title released in North America. While new titles were still being published in Europe and Japan, Sega made it clear they had no plans to create another home console. With Puyo Puyo Fever being the last First-Party title released in 2004, what Sega had hoped would save them financially simply turned into the last factor forcing them to return to the world of third party software development.

Third Party Existence

On March 21, 2001, what was once unthinkable was finally a reality. Announcing their focus on software only two months prior, the first Sega game to be released on a Nintendo console became available. Being a port of the Dreamcast title Chu Chu Rocket on the Game Boy Advance, it was only the first of many titles to be released on hardware Sega once considered the competition. Any game early enough in development was moved from the Dreamcast to other hardware, and existing titles were quickly ported over to try and recoup the losses Sega had been incurring.

Only two days before, Isao Okawa, President of Sega Japan, passed away, only days after donating $695.7 million USD to the company in an effort to get it out of the red. Even still, the fiscal reports released in March 2002 still put the company below the line of profitability for the fourth straight year. Although not nearly as far in the red as it had been the year previous, it was still painfully obvious that even after dropping out of the hardware market, that company was still in serious financial trouble. Though Okawa had briefly talked with Microsoft about the possibility of having Sega merge with their gaming division before his death, nothing had come of those talks.

Also in early 2001, it was announced that Sega had plans to port Saturn games over to the original PlayStation. A GameWeek interview conducted with Charles Bellfield (Sega's VP of marketing) at Toy Fair 2001 in New York revealed that Sega would announce specific Saturn title ports in April to be released in summer 2001.^[1] The Saturn ports would be priced at $19.99.^[2]

Two games were eventually released by Sega on the Playstation (MiniMoni. Shakka to Tambourine! Dapyon! and Puyo Puyo Sun Ketteiban). Puyo Puyo games were released on several platforms over the years so it's presence on the PlayStation isn't that unusual. The Sega releases for the PlayStation did not come out until 2002-2003.

Though brief discussions continued on with former interests Microsoft, Bandai and even Electronic Arts, on February 19, 2003, Sega announced to the world their impending merger with Sammy Corp., an arcade rival who specialized in Pachinko machines. Only nine weeks after signing an agreement in principle with Sammy, gaming giant Namco made public their own intentions with Sega, making a counter offer to have Sega merge with them. Within a month, both talks fell through, with Sega withdrawing from the Sammy merger and delaying talks with Namco, which prompted that company to withdraw their offer, making it clear that it definitely was not the right time to merge if Sega did not know what it wanted to do with itself.

In August of that year, Sammy once again became interested in Sega, buying the holdings CSK still held with Sega. Once purchasing the 22 percent outstanding stock in the company, Sammy Chairman Hajime Satomi became the CEO of Sega Japan, announcing the company's main focus would be in the arcade sphere.

Sega Sammy Holdings

The Sega Sammy Group logo.

In the middle of 2004, Sammy bought a controlling interest in Sega, at the reported cost of $1.1 Billion USD. In the wake of this purchase, Sega Sammy Holdings was created, with Sega being a subsidiary of that company. Because of the company's restructuring, the development studios that had become semi-autonomous back in 2000 were remerged into Sega proper. One of those studios, Visual Concepts, would soon be sold to Take-Two Interactive.

By 2005, Sega was once again in the black, with the arcade side booming and new franchises such as the Yakuza series becoming successes in the home market. This trend continued into the first half of 2006, though profits began to slip as the company headed into the 2007 fiscal year. In the wake of the critical failure of Sonic the Hedgehog 2006, the Sonic Team as a whole was restructured to try and better focus their largest franchise. Meanwhile, Sega began to look toward the licensing market, creating partnerships with New Line Cinema and Marvel Studios to create games based on their movies, including The Golden Compass and Iron Man, all in an attempt to broaden their western audiences.

In 2009, yet another restructure of the company occurred when Mike Hayes was made president of Sega of America. Having previously worked at Sega of Europe, Hayes was moved to America to help the main western branches to cooperate more. Sega of America and Sega of Europe became part of a larger whole known as Sega West, in which Hayes was placed in charge. With San Francisco remaining the headquarters, the branch became focused on digital distribution, not only of rereleased titles from Sega's past but also brand new games.

Sega of Japan also found another hit on their hands with the release of a new licensed franchise, this time aimed squarely at Japan. Entitled Hatsune Miku: Project DIVA, the music rhythm game was created for Sony's PSP, using the image and vocals of a fictional character popularized by the Vocaloid program by Yamaha. Including not just official songs but having fan-made content, the series took off, along with the popularity of Hatsune Miku herself.

Currently, Sega is once again enjoying increased profits and marketability, even if they are not the culture phenomenon they once were within the context of the 90's. With a steady stream of games for the home and mobile gamer of both new and beloved franchises, coupled with strengthening itself in the arcade, the legacy of Bromberg and Rosen live on to this day, with no signs of stopping.

Consoles

• SG-1000 - Sega's first game console, which was adapted into the Sega SC-3000. Released only in Japan.
• Sega Mark III - Sega's follow-up, also released only in Japan.
• Sega Master System - A retooled Mark III released across the globe. Was also rereleased in Japan.
• Sega Mega Drive - Sega's 16-bit powerhouse. Was renamed the Sega Genesis in the United States.
• Sega Game Gear - Sega's first handheld system, with architecture nearly identical to the Master System.
• Sega Mega-CD - A CD-ROM peripheral for the Mega Drive. Was renamed the Sega CD in the United States.
• Sega Super 32X - A cartridge peripheral for the Mega Drive. Was renamed the Sega Genesis 32X in the United States and the Sega Mega 32X in Europe.
• Sega Mega Jet - A portable Mega Drive released for use on Japan Airlines aircraft. Only released in Japan.
• Sega Pico - An educational computer.
• Sega Nomad - A portable Genesis that played the same cartridges. Only released in North America.
• Sega Saturn - Sega's second 32-bit console, using CD optical media.
• Sega Dreamcast - Sega's final foray into the console market.

Unreleased Consoles

• Sega VR - 3D-helmet based home console system. Cancelled due to health concerns.
• Sega Neptune - A Sega Mega Drive/32X hybrid.
• Project Jupiter - A cartridge-based 32-bit system. Passed up for the Sega Saturn.

Sega of Japan

Production and Engineering Department

1964-1984

During the period when Sega was owned by a non-japanese company, Sega started development on games with electro-mechanical games and transitioned to microprocessor video games in the Production and Engineering Department. The first notable game from Sega, was the eletro-mechanical game Periscope, which was designed under the direction of Sega founder David Rosen.

Research and Development (First party company)

1984-1990

In 1984, around the time Sega was purchased by the CSK Holdings Corporation, Research and Development divisions were formed. The earliest documented Sega employee in game development is Hisashi Suzuki who joined in 1962 and worked on many electro-mechanical games for a number of decades.

Hideki Sato joined Sega in 1971 and was instrumental in introducing some of the first commercial videogames in the early 70s in Japan, and was also considered the "father of Sega hardware" which includes arcade hardware and home hardware. His first home hardware was the SG-1000, which he created along with Masami Ishikawa, who joined in 1979. Afterwards Hideki Sato and Masami Ishikawa became the forefront managers for Sega's home console engineering team. After the Mega Drive, Masami Ishikawa become exclusively involved with Sega's arcade manufacturing, which was the position he initially applied before. Hideki Sato would continue to supervise all subsequent consumer hardware. For software development, the most known senior employee was Yoji Ishii who joined in 1978 and designed and directed titles such as Fantasy Zone, Flicky and helped to design Hang-On and OutRun with Yu Suzuki. In the 1990's, he moved into a producer and a management role. Tomio Takami became an additional manager in 1988. From 1987 to 1990, Research and Development departments were expanding up to eight different departments. The departments had no clear distinctions between mechanical hardware development, amusement operations and home hardware creation. This would change beginning with the 1990's. The most standout products for Sega during this era were taikan arcades, which is literally translated from japanese as "body sensation", and refers to large cabinet set-ups with more than button and joysticks. Sega popularized the term and innovated this design through games such as Hang-On, OutRun, Space Harrier, and After Burner and the more eleborate set-up, the R-360. All the aforementioned games were created by Yu Suzuki who joined in 1984 and started to stand out the most among Sega's developers relatively quickly. Sega also picked up many licenses from other gaming companies for porting third-party games to their own systems.

1990-1998

From 1990 onwards the arcade and game console operations became their own divisions. Development teams became bigger and many of the planners, designers and programmers of the small teams of before, became producers and managers of their own teams and departments.

The Amusement Machine Research and Development Division (AM), was headed by Hisashi Suzuki (General Manager, previously Manager of R&D) and Naoki Aoki (Manager), and grew to 5 overall departments.

AM1 was headed by Rikiya Nakagawa (General Manager), who joined in 1983 and helmed the team behind arcade titles such as Altered Beast, Shinobi and Golden Axe. AM1 most notable games through their arcade line-up were The House of the Dead and Dynamite Deka.

AM2 was headed by Yu Suzuki (Manager), Toshihiro Nagoshi (Deputy General Manager) and Mifune Satoshi (Producer). The Model series of arcade hardware was introduced and spearheaded by Yu Suzuki and produced games considered generations ahead of home hardware, this would help lay the foundation for 3D fighting games (Virtua Fighter), 3D racing games (Virtua Racing), 3D shooters (Virtua Cop) and 3D sports games (Virtua Striker). In 1994, Yu Suzuki started to prototype early concepts of what would eventually become Shenmue.

Toshihiro Nagoshi joined in 1989 and created the Daytona USA series, Virtua Striker series and Scud Race, and would set up his own studio by 1998, AM4.

Mifune Satoshi was the third most senior employee at AM2, who has worked wiith Yu Suzuki since Space Harrier, and is credited for Dynamite Dux, GP Rider, Turbo Outrun and F1 Exhaust Note.

Daytona USA was the first game using the palmtree AM2 logo, signaturing the department for being special among all the R&D Departments among Sega.

AM3 was headed by Hisao Oguchi (Manager), Mie Kumagai (Producer), Yoshiro Akate (Producer), Juro Watari (Producer) and Tetsuya Mizuguchi (Producer).

Hisao Oguchi joined in 1984 as a planner, with his very first work being Doki Doki Penguin Land for the SG-1000. Oguchi also was responsible for Super Monaco GP, contributed to the medal game area, and started research and development on the Derby Owners Club arcade machine since the early 90's.

Mie Kumagai joined in 1992, her first title was Rail Chase, and has since been responsible for variety of sports games (Decathelete) and rail-shooters (The Lost World: Jurassic Park).

Yoshiro Akate major contributions as a producer were Last Bronx and Baku Baku Animal.

Juro Watari started the Virtual-On series and also worked on rail-shooters.

Tetsuya Mizuguchi joined in 1990 and contributed to Joypolis attractions with his own Emotion Engine R&D Office. In 1995, he produced his first major game, Sega Rally Championship. After that game, the department spun off a seperate AM5 department which was managed by Tetsuya Mizuguchi, where he contributed further with racing games. He left arcade development however to set up a fourth consumer studio by 1998, leaving AM5 up to Kenji Sasaki who worked with Mizuguchi since the beginning.

In addition to software titles, a seperate AM department was also resonsible for the manufacturing and the technology of cabinets. This department also created cabinets that are lightly reliant on software, such as prize games, medal games and also photobooth related arcade machines. Alot of these machines were big hits in domestic markets.

The Consumer Research and Development Division (CS) was headed by Yoji Ishii (General Manager, previously Manager of R&D), Makoto Oshitani (Deputy General Manager) aMamoru Shigeta (General Manager), Takami Tomio (Deputy General Director, previously Manager of R&D), Koichi Nagata (Deputy General Manager) and Hiroshi Aso (Manager).

Makoto Oshitani was as assistant director on Super Monaco GP II, and then produced titles from 1993 to 1998.

Mamoru Shigeta was an executive producer from 1993 to 1995.

Hiroshi Aso started in 1986 and worked on various Master System and Game Gear versions of games, and became a producer since 1994.

CS1 was headed by Yoji Ishii (Manager), Noriyoshi Ohba (Producer) and Tomohiro Kondo (Producer).

Tomohiro Kondo took a variety of roles in game development since 1988, with the home conversion of Rad Mobile being his first game as director in 1994. After this, he switched to being producer. The departments major works were a variety of sports titles and the Panzer Dragoon series.

CS2 was headed solely by Noriyoshi Ohba (Deputy General Manager). Noriyoshi Ohba joined in 1988, and directed the Streets of Rage and the Super Shinobi series of games.

The department also became the definitive team for RPG games, with members of the development team being part of the team that created the latter half of the orginal four Phantasy Star games. A dedicated RPG Project Office was founded in 1993 which resulted into the Sakura Taisen series, and several other RPG's on the Saturn, which were mostly partnerships with external companies. The development of the flagship Dreamcast RPG, Skies of Arcadia, also started there.

Sonic the Hedgehog became Sega's biggest consumer success, elevating the creators Yuji Naka (Producer) and Naoto Oshima (Deputy General Manager), into lofty positions within the company being able to name their CS3 department into Sonic Team. Yuji Naka joined in 1984, and programmed several games such as his very first game Girl's Garden for the SG-1000, and the original Phantasy Star and it's sequel.

Naoto Oshima joined 1987 and has been involved as a designer, most notably the first two Phantasy Star games.

After the creation of the first Sonic the Hedgehog, Yuji Naka and Naoto Oshima split ways. Yuji Naka went abroad to San Francisco to develop games, however except for collaboration with American staff on Sonic The Hedgehog 2, the staff was almost completely Japanese throughout. Meanwhile, Naoto Oshima developed Sonic CD in Japan. When Yuji Naka arrived back in Japan in 1995, they both developed new IP such as Burning Rangers and Nights Into Dreams... which were promoted with the Sonic Team moniker. Naota Oshima last involvement with a Sonic tite, was Sonic Adventure as a CG Movie director. CS4 'was established by Tetsuya Mizuguchi who previously made games in the arcade division.

Deticated departments were founded for development of Mega CD games in 1992 by Takami Tomio (Manager) and 32X games in 1994 by Koichii Nagata (Deputy General Manager). There was also a PC conversion department in 1996 by Shun Arai.

1998-2000

In 1998 Sega launched the Sega Dreamcast and the NAOMI arcade platform. By then Sega's game software studios grew to 9 game development units, with the addition of own units for music production and mechatronic related arcade development. The process of Sega restructuring it's in-house studios into 9 independent subsidiaries lasted from 1998 to 2000. The arcade business during this time was headed by Hisashi Suzuki (General Manager, previously Manager of Arcade R&D), Akira Nagai (Deputy General Manager) and Yu Suzuki (Deputy General Director, previously Manager of AM2). Akira Nagai was one of the oldest arcade employees among Sega along with Hisashi Suzuki, having worked at electro-mechanical games.

The consumer business was headed by Yoshihiko Hirose (General Manager), Hideki Sato (Deputy General Manager, previously, Manager of Hardware R&D), Eichii Yukawa (Deputy General Manager), Hiroyuki Miyazaki (Producer), Takayuki Kawagoe (Producer) and Ryochi Hasegawa (Producer). They haven't been directly involved in game development, but more at coordinating and producing, a variety of games.

Ryochi Hasegawa, in particular, has been involved as a domestic localizer for japanese titles since 1992.

Around this point the consumer teams within Sega have changed significantly, with Yoji Ishii, Naoto Oshima, Tomohiro Kondo and variety of other producers and managers leaving the company and becoming affiliated with Artoon, cavia and AQ Interactive.Also significant creators such as the game director of the Sonic The Hedgehog trilogy, Hirokazu Yasuhara, and creator of the very first Shinobi game, Yutaka Sugano, became affiliated with overseas branches of Sega. Afterwards they left Sega as well.

Subsidiary Era (First Party and Third Party)

2000-2004

By 2000 all of in-house Sega's R&D departments were separated from the main company and established on 9 semi-autonomous subsidiaries, with each subisidiary getting an elected president as a studio head. This was done with an eye on Sega eventually becoming software only.

WOW Entertainment Ltd. was headed by Rikiya Nakagawa (President & CEO, previously General Manager of AM1). In addition of an continued arcade line-up, WOW Entertainment made efforts on the consumer market with the SEGA GT racing series, an effort to compete against Sony's Gran Turismo. Tthey also made efforts on the GameBoy Advance. In 2003 it was renamed to SEGA WOW and absorbed Overworks. The line-up of action games Blood Will Tell, Nightshade and the RPG Sakura Taisen became part of SEGA WOW. Around this time, personell has changed significantly, with Noriyoshi Ohba, previous head of Overworks, and Rikiya Nakagawa, previous head of WOW Entertainment, retiring from Sega.

Kazunari Tsukamoto then took the presidency position at the company. He joined in 1987 and produced and programmed Phantasy Star III, and did arcade games such as OutRunners, The Ocean Hunter and The House of the Dead III.

A significant employee at Sega, Makoto Uchida, has produced and directed games since 1988, which include Altered Beast, Golden Axe, Alien Storm, Wing War, Dynamite Deka series and Alien Front. Since 2002, he has managing been the chinese division at Sega, called Sega Shanghai R&D, providing development support for a variety of Sega titles. Which includes the 2005 Altered Beast game, which started development around the end of the SEGA WOW existence.

SEGA-AM2 was established as an indepedent studio but has held it's name, and features the palmtree logo prominently. It was headed by Hiroshi Kataoka (President & CEO), Hisashi Suzuki (President & CEO; previously General Manager of Arcade R&D), Yu Suzuki (Manager, previously Manager of AM2 and Deputy Director of Arcade R&D) and Makoto Osaki (Manager). After numerous arcade successes by Yu Suzuki, he released Shenmue in 1999 in Japan, a game that was in development since 1994. The game was famous for it's highest development budget at the time, and pioneering gameplay for home gaming. Hiroshi Kataoka joined in 1991 and worked with Yu Suzuki since Virtua Racing. He then became a director with the Fighting Vipers series, Sonic The Fighters, Fighters Megamix and then produced Outrigger. Makoto Osaki joined in 1993 with his first titles as director being Virtua Fighter Kids, Daytona USA 2, and the cancelled Propeller Arena.

After the completion of Shenmue 2 and the studio becoming more of an indepedent unit, Yu Suzuki stepped down as head of the studio. Virtua Fighter 3 was Yu Suzukis last game as director in the series, leaving sequels of OutRun, Virtua Cop and Virtua Fighter up to Hiroshi Kataoka. Hiroshi Kataoka is credited for the very first internet infrastructure in japanese arcades with Virtua Fighter 4, which spawned many more networked arcade games by Sega and other companies. By 2003, Yu Suzuki has left the studio to form his own studio Digital Rex. Towards the tail end of the indepedency of SEGA-AM2, they released their last orginal console game, Virtua Quest.

Hitmaker was established from the AM3 department which created many popular arcade favourites in past, such as Virtual-On, Derby Owners Club, Crazy Taxi and Virtua Tennis. It was headed by Hisao Oguchi (President & CEO, previously Manager of AM3), Mie Kumagai (Assistant President, previously Producer at AM3), Kenji Kanno (Manager) and Junichi Tsuchiya (Producer).

Kenji Kanno joined in 1993 and has since directed the Jurassic Park arcade game, Funky Head Boxers and Top Skater. His defining game would come however with the release of Crazy Taxi. Due to the Crazy Taxi and Virtua Tennis sequels having more of a console than arcade focus, the overall company was less arcade focused than the previous AM3.

Junichi Tsuchiya was a significant employee within Sega, who joined in 1987, and has developed a variety of Master System and Mega Drive titles, which include sports games and arcade conversions. His last role before joining Hitmaker was being a production coordinator for the AM2 title, Shenmue. At Hitmaker however he produced the World Club Champion Football arcade machine, the very first arcade game with a trading card aspect. Similar to network features in Virtua Fighter 4, trading card aspects would become an important aspect of Sega's arcade strategy.

In 2003, Mie Kumagai replaced Hisao Oguchi as the company president, when Hisao Oguchi was promoted to President of the entire Sega company. Also in 2003, the studio absorbed Sega Rosso, making Initial D Arcade Stage part of it's line-up.

Amusement Vision (AV) was headed by Toshihiro Nagoshi (President & CEO, previously Deputy General Manager of AM2 and Manager of AM4). AV was most known for it's Nintendo partnership on the exclusivety on the orginal two Super Monkey Ball games, and development collaboration of F-Zero GX. In 2003, Toshihiro Nagoshi gained more power within the Sega company being appointed to the group of executive officers, alongside Yuji Naka. AV also absorbed the non-sports staff of Smilebit in 2003.

Sega Rosso was headed by Kenji Sasaki (President & CEO, previously Manager of AM5), the company was short-lived before being absorbed by Hitmaker. It contributed to Sega's arcade line-up with Cosmic Smash and Initial D Arcade Stage. With the latter becoming a major franchise. It was absorbed by Hitmaker in 2003.

Smilebit was formed from CS1, which contained staff from the Panzer Dragoon series, sports games and PC conversion staff. It was headed by Shun Arai (President & CEO, previously Manager of PC R&D) and Takayuki Kawagoe (Assistant President, previously General Manager of Consumer Business). While continuing sports-related games, the studio became more known for it's high-end console games. Which includes Jet Set Radio and Hundred Swords for Dreamcast, and the Xbox trio of Jet Set Radio Future, Panzer Dragoon Orta and GunValkyrie. Due to the teams experience with converting games to the PC since the mid 90's, the team was quickly able to get high perfomance of the Xbox. Non sports-staff was converted into Amusement Vision in 2003.

Overworks was formed from CS2, and headed by Noriyoshi Ohba (President & CEO, previously Manager of CS1 and CS2) and Yasuhiro Nishiyama (Producer). Out of the gate it came out with Skies of Arcadia for Dreamcast and GameCube, and also continued the Sakura Taisen series. In 2002, it came with the Shinobi reboot on PlayStation 2. Yasuhiro Nishiyama produced the Atsumare! Guru Guru Onsen series. Overworks was absorbed by WOW Entertainment in 2003.

Sonic Team was established as a subsidiary with the same name as it had before, and was headed by Yuji Naka (President & CEO). Like in the era of the Mega Drive, it had staff in San Franchiso to develop Sonic The Hedgehog games. Sonic Team USA was managed by Takashi Iizuka.

Takashi Iizuka joined in 1992 during development of Sonic the Hedgehog 3, and spearheaded the design and concept of 3D Sonic games, with Sonic Adventure in Japan, and went later on to work on Sonic Adventure 2 and Sonic Heroes at Sonic Team USA.

After the release of Sonic Adventure, the japanese Sonic Team mainly focused on making new IP. This ranged from Samba de Amigo, Chu Chu Rocket and Phantasy Star Online for the Dreamcast, Billy Hatcher and the Giant Egg for the GameCube and Feel the Magic for theNintendo DS. In 2003, Yuji Naka was promoted to the group of executive officers similar to Toshihrio Nagoshi. In the same year, the studio absorbed United Game Artists.

United Game Artists was established and headed by Tetsuya Mizuguchi (President & CEO). After having his own Emotion Engine R&D Office, and making arcade racing games, his final contribution at Sega were the cult classic Space Channel 5 games and Rez. In 2003, staff on UGA was absorbed by Sonic Team. Tetsuya Mizuguchi has since left. Both Sonic Team and United Game Artists shared the same employee Mineko Okumura (Producer).

Sega Mechatronics was established in 1999 as it's own group. It was involved into purely mechanical side of arcade, which were the UFO Catchers and medal games, but also the arcade cabinets of sotware based titles.

Mushiking Team was formed after the release of Mushiking: The King of Beetles developed by the New Business Division in 2001. The game became a huge success opened the market for games at the arcade for young children. The team was headed by Hiroshi Uemara (Manager) who joined Sega in 1990 and worked on Joypolis

The sound production unit at Sega became its own label as Wave Master in 2000. In addition to producing music, the firm also has created games. It was headed by Yukifumi Makino

Sega Mobile was established in 2000 and covered games developed for cell phones.

Research and Development (Third Party)

2004-2009

Due to financial difficulties, Sega began consolidating it's studios in 2003, when instead of 9 subsidiaries, Sega reformed them into 7. At this point Sega had SEGA WOW, SEGA-AM2, Digital Rex, Hitmaker, Amusement Vision, Sonic Team and Smilebit. In the same year Sega was bought by the Sammy Corporation. Presidents of WOW Entertainment and Overworks, Rikiya Nakagawa and Noriyoshi Ohba respectively have left Sega. UGA president Tetsuya Mizuguchi left also. Conversely Hitmaker president Hisao Oguchi was promoted to president of the Sega company, and then to chief creative officer of the newly formed Sega Sammy Holdings in 2005.

In 2004, the teams were moved into a uniform R&D structure again as it was in the 80's and 90's. The Process was fully completed in 2005, when the individual divisions got new names and Sega Sammy Holdings came into effect.

By 2005, overall software management was handled by Hideki Okamura (General Manager), Yuji Naka (General Manager, previously President & CEO of Sonic Team), Hiroyuki Miyazaki (Manager, previously General Manager of Consumer Business), Ryochi Hasegawa (Producer, previously Producer for Consumer Business), Yukio Sugino (General Manager) and Takayuki Kawagoe (General Manger, previously President & CEO of Smilebit Corporation).

Hideki Okamura joined in 1987, and by 1997 was the deputy division manager of the consumer business as well as in charge of the Saturn business division. He also was in charge of the Dreamcast business division right after.

Yukio Sugino has been part of Sega since 1993, being one of the executive officers since 2003.

The General Entertainment Research and Development Division (GE) contains members of Sonic Team and SEGA WOW. It was headed by Yuji Naka (General Manager), until 2006, when he left Sega to form Prope, where his first game was still published by Sega in 2008, Let's Tap.

GE1 was headed by Akinori Nishiyama (Manager), Takao Miyoshi (Manager), Takashi Yuda (Producer), and Masahiro Kumono (Producer).

Akinori Nishiyama joined in 1987 and had various writing and design roles at the CS2 and CS3 divisions. For the original four Phantasy Star games, he wrote and directed Phantasy Star II and Phantasy Star IV, and also did the art direction on the fourth installment. On Phantasy Star Online he directed the design and the script. For the Sonic the Hedgehog franchise, he took his writing experience from RPG's and was scenario writer on Sonic Adventure. Afterwards he would direct the handheld outings for the Sonic the Hedgehog and Puyo Puyo franchises. Nishiyama also assembled the team of Yoshihisa Hashimoto and Sachiko Kawamura as creative producer in 2008, to develop Sonic Unleashed.

Takao Miyoshi joined in 1990 and first worked on the Sega Meganet minigames. Before his debut as director on Phantasy Star Online, he had design roles for Formula One World Championship: Beyond the Limit, Sonic 3D Blast, Burning Rangers and Sonic Adventure. He was responsible for Phantasy Star Universe. In similar fashion to the Sega Meganet minigames, he produced a smaller scale downloadable game called Pole's Big Adventure for the WiiWare, in 2009.

Takashi Yuda joined in 1988, and has been involved as as an artist for Sonic the Hedgehog 3 and Knuckles Chaotix, and the Disney licensed titles for the Mega Drive. Since then he has directed the Space Channel 5 games and Puyo Puyo Fever. He then produced the Sonic Riders series.

Masahiro Kumono started in 1993, who went from miscallenious artist roles, to directing the PlayStation 2 action games, Shinobi and Nightshade. He produced Sonic the Hedgehog 2006. Takashi Iizuka at Sonic Team USA, now called Sega Studio USA, developed Shadow The Hedgehog and NiGHTS: Journey of Dreams. In 2008, the studio merged back into Japan.

GE2 was headed by Akira Nishino (Manager), Kazunari Tsukomoto (Manager, previously President of SEGA WOW) Ryutaro Nonaka (Producer) and Shinji Motoyama (Producer).

Akira Nishino started as a game designer in 1993 on Sonic CD and then directed Ristar, since he had a variety of roles at SEGA WOW, such as directing and support.

Ryutaro Nonaka started as a main planner for the 32X game Metal Head in 1994, since then he worked at SEGA WOW, with directing the Dreamcast entries of the Sakura Taisen franchise, as well as producing Nightshade. Nonaka then produced Valkyria Chronicles.

Shinji Motoyama got his start at SEGA WOW, doing design work on Nightshade and Blood Will Tell.

Sega's chinese division, Sega Shanghai R&D, established in 2002 and managed by Makoto Uchida, continued to provide development support for a variety of Sega titles

The New Entertainment Research and Development Division (NE) contains members of Amusement Vision and Smilebit. It was headed by Toshihiro Nagoshi (Manager), Takaya Segawa (Manager), Osamu Ohashii (Producer), Masamitsu Shiino (Producer) It was there when the Yakuza franchise began. They also continued to develop and supervise the continued releases in the Super Monkey Ball franchise. Takaya Segawa, Masamitsu Shiino and Osamu Ohashii joined Sega in the mid 90's and have worked on sport related games since. They countinued to do so, with the Mario and Sonic at the Olympic franchise in collaboration with Nintendo being a significant one. Masamitsu Shiino was not only behind sports games but also The Typing of the Dead.

The Amusement Machine Research and Development Division (AM) contains members of SEGA WOW, SEGA-AM2, Hitmaker, Sega Mechatronics, Mushiking Team and Digital Rex.

The arcade division was headed by Hiroshi Kataoka (General Manager, previously President at SEGA-AM2).

AM1 was headed by Atsushi Seimiya (Manager), and Yasuhiro Nishiyama (Deputy General Manager, previously Producer at Overworks). Atsushi Seimiya joined in 1990 and was designer on E-SWAT: City Under Siege and Streets of Rage games. Then he would direct Advanced World War: The Last Millenium and be one of the directors for Skies of Arcadia. At SEGA WOW, he would further manage all their releases. The most successfull release of AM1 was the launch of the Sangokushi Taisen franchise. It also continued the mainline The House of the Dead franchise with HoTD4.

AM2 was headed by Makoto Osaki (Manager). AM2 continued the Virtua Fighter franchise and also brought back After Burner, with After Burner Climax.

AM3 was headed by Mie Kumagai (Manager, previously President of Hitmaker Corporation) and Kenji Kanno (Producer; previously Producer of Hitmaker Corporation). AM3 continued the World Club Champion Football, Virtua Tennis, Derby Owners Club and Initial D Arcade Stage franchises.

AM+ was headed by Yu Suzuki. Previously called Digital Rex, Yu Suzuki spend time developing Shenmue Online and Psy-Phi, which ultimately got cancelled. At 2008, his single release as a producer was Sega Race TV.

2009-current

Another restructuring took place from 2008 to 2010, with the major purpose being the merger of GE and NE to a uniform CS (Consumer) division, and merger of arcade departments.

Previous department managers Toshihiro Nagoshi, Akira Nishino, Osamu Ohashii and Akinori Nishiyama became senior producers and oversee all software development. Similar to Yuji Naka, Yu Suzuki and Toshihiro Nagoshi, Hiroshi Kataoka, has become one of the company's executive officers. Yu Suzuki would leave this position however in 2009, and retired from Sega, leaving as a special advisor. Currently Toshihiro Nagoshi and Hiroshi Kataoka hold the highest creative role within the Sega company.

CS1 is headed by Toshihiro Nagoshi (General Manger), Masayoshi Kikuchi (Deputy Manager), Riichiro Yamada (Manager), Daisuke Sato (Deputy General Manager), Yojiro Ogawa (Manager), Masayoshi Yokoyama (Manager) and Yasuhito Baba (Producer).

Masayoshi Kikuchi joined Sega in 1995, and started out as a planner for Panzer Dragoon Zwei and Panzer Dragoon Saga, and then directed Jet Set Radio, Jet Set Radio Future and the Ollie King arcade release. Kikuchi has become the second authority for the Yakuza franchise next to Nagoshi. After producing Binary Domain, he became the head of mobile development at the consumer division of Sega.

Riichiro Yamada, Masayoshi Yokoyama, Daisuke Sato and Yasuhito Baba have worked under Masayoshi Kikuchi and Toshihiro Nagoshi since Amusement Vision and Smilebit.Masayoshi

Yokoyama wrote the story for the Yakuza games since the PS3 entries, and became the producer for the series after Kikuchi became involved in mobile development.

Yojiro Ogawa was a planner on Panzer Dragoon Saga, but afterwards has been involved with games at Sonic Team, with Sonic and the Secret RIngs being his defining game as director. At CS1 he produced the Kurohyō: Ryū ga Gotoku Shinshō spin-off games.

CS2 is headed by Takashi Iizuka (Manager, previously Director of Sega Studio USA), Shun Nakamura (Producer) and Mizu Hosoyamada (Producer).

Takashi Iizuka replaced Akinori Nishiyama as the general manager of Sonic Team. Since Sonic the Hedgehog 4: Episode 1, he has become the main producer of the franchise.

Shun Nakamura has been working on Sonic titles since Sonic Adventure, with the addition of directing new IP Samba de Amigo and Billy Hatcher and the Giant Egg. After almost a decade, he would return into directing a new IP, Rhythm Thief & the Emperor’s Treasure. Mizu Hosoyamada main responsibility has been the Puyo Puyo franchise, being involved since Puyo Pop Fever.

CS3 is headed by Takao Miyoshi (Deputy General Manger, previously Manager of GE2), Yochi Shimasato (General Manager), Takaya Segawa (Manager, previously Manager of NE), Satoshi Sakai (Producer), Shuntaro Tanaka (Producer), Shinji Motoyama (Producer, previously Producer at GE#2), Tsuyoshi Sawada (Producer), Seiji Hayashi (Producer) and Yosuke Okunari (Producer).

Youichi Shimasato directed the 32X title, Shadow Squadron in 1995, and since became a producer at Smilebit, Amusement Vision, and then GE2. Shimasato most notably produced various modern Shining titles and most recently produced Hero Bank.

Satoshi Sakai started in 1995 as an artist eventually becoming art director for Phantasy Star Online, and then director and scenario Planner of Phantasy Star Universe. Sakai succeeded Takao Miyoshi, in producing the Phantasy Star Portable games and Phantasy Star Online 2. An Online R&D Department was specifically established for PSO2. The continued success of PSO2 inspired Sega to restructure it's CS division into an "Consumer Online" company in 2015.

Shuntaro Tanaka is credited for being the director on both Skies of Arcadia and Valkyria Chronicles. Before Skies of Arcadia, Tanaka was involved in game planning for titles. After Valkyria Chronicles Tanaka managed and supervised games released at his current department. Tsuyoshi Sawada joined in 1992 in marketing, he produces the modern Shining entries.

Seeiji Hayashi is the producer for the Hatsune Miku: Project DIVA series. Yosuke Okunari started at Sega in 1994 for marketing.

Since 2003 Okunari was been responsible for the Sega Ages 2500 series. Afterwards he has been responsible for downloadable and archive relases at Sega, most recently 3D Classics.

Sega's chinese division, Sega Shanghai R&D, established in 2002 and managed by Makoto Uchida, continues to provide development support for a variety of Sega titles

The Amusement Machine Research and Development Division was renamed to the Research and Development Division (R&D).

The arcade division faced various challenges due to economic pressure, and the increasingly smaller japanese arcade market. The three AM software game studios, mechatronics department and family entertainment department, got merged into two R&D groups. According to AM2 manager Makoto Osaki, networked games and standard cabinets are more affordable to arcade facility managers than the large eleborate arcade set-ups such as Hang-On. The ALL.Net arcade network service from Sega consists most currently of 22 games, 6 games of which shut down network service.

R&D1 is headed by Yasuhiro Nishiyama (General Manager, previously Deputy General Manager of AM1), Takashi Oda (General Manager), Kenji Arai (Producer), Ryuchi Taki (Producer), Tomohiro Kashiwada (Producer). Takashi Oda joined in 1992, and has developed a variety of arcade games, with his most major credit being director of The House of the Dead games. Kenji Arai has been involved with racing games as a graphic designer since Sega Rally Championship, and became an assistant producer with Sega Rally 2. Then he would become fully a producer with NASCAR Arcade, Initial D Arcade Stage and Sega Rally 2006. Ryuchi Taki main responsibility has been the Maimai arcade game. Tomohiro Kashiawada main responsibility has been the World Club Champion Football franchise.

R&D2 is headed by Hiroshi Kataoka (General Manager, previously General Manager of AM2 and Arcade R&D), Noriyuki Shimoda (Producer), Makoto Osaki (Manager, same position) and Mie Kumagai (Producer, previously Manager of AM#3). Noriyuki Shimoda has been working at AM2 since Virtua Fighter 4, his main responsibility is Border Break.

A new department in the Arcade division called the N. Pro R&D Department was formed in 2013, which is located in Yokohama, while Sega's R&D is traditionally housed in Tokyo. The mission statement according to department head Yuji Sugimori is "To make products with a new play experience that can become the future standard". Masami Ishikawa, currently the most senior employee at Sega of Japan who designed the Mega Drive along with Hideki Sato before moving into arcades, also is part of the department. Their first release is Edel Sunaba.

Sega Networks Co. Ltd.

Sega released it's first smartphone and tablet app on the iTunes store through an American developer with a version of Super Monkey Ball. However the acceleration of mobile development truly began in 2010, when Sega Japan established mobile studios internally at both the console and arcade divisions. Sega Networks deploys various producers and resources from consumer and arcade divisions. The mobile department (Mobile New Media Division) in the consumer division is headed by Masayoshi Kikuchi (Manager, previously Deputy Manager CS1). In the arcade division, the mobile department (MOBILE WORKS) is headed by Jun Matsunaga (Manager) from R&D1. In 2012 an official mobile firm was established, and since has been a major growth driver for Sega Sammy. Contributing to this growth were a variety of Sonic releases, the Puyo Puyo franchise, Japanese sports franchises and new franchises such as Chain Chronicle and Kingdom Conquest. According to Sega, about a third of their development force is currently in mobile development. In addition Sega has been acquiring, investing in partners both in Japan and overseas.

External Links

• Sega of Japan
• Sega of America
• Sega Sammy Holdings