Rosen Enterprises

Rosen Enterprises
Founded: 1953
Defunct: 1965-07-15
Merged with: Nihon Goraku Bussan (1965-07-15)
Merged into: Sega Enterprises, Ltd.

Rosen Enterprises, Ltd. was an import business founded by David Rosen which ran from 1953 to 1965.

History

From 1949 to 1952, Rosen was deployed with the U.S. Air Force in eastern Asia for the Korean War, traveling to China and South Korea before being stationed in Okinawa. After the war, Rosen returned to New York for a short period of time, as he had actually established "Rosen Enterprises" in Japan before he was discharged and had the idea of furthering that company's interest in the United States. However, he returned to Japan before having such an opportunity.

Rosen Enterprises focused on art; he hired artists who were unemployed by the post-War recession in Japan to create portrait paintings based off photographs. A company in the United States was established to do this as a business whereby the photos would be sent back to Japan, the portraits would be done and the company would send the photo. That business met with mixed results. However, Rosen noticed a problem in the Japanese market: the need for identification photos.

Photorama

At the time, citizens virtually needed an ID photo for school applications, for rice ration cards, for railway cards, and for employment. Photo studios in 1953-1954 generally charged 250 yen and it took 2 or 3 days to have the photos taken. To contrast, in the United States, automated "photomat" studios where people could go sit in a booth and pay 25 cents for four photos were popular. In testing those photos, Rosen found that they would not be suitable for ID photos because after a year or two years, the photos would fade due to a lack of good temperature control. The machines didn't have the temperature control because people really weren't interested in getting a photo that was going last for two years. Therefore, he determined that if the process had better temperature control, a photo could be made that would last for several years. His solution was to make a semiautomatic photomat where the machine would take the photo, but would have somebody in a booth behind the photomat who would develop the film with the proper temperature controls.

Therefore, Rosen took some of the older photomat booths that were in the United States, redesigned them, and brought them into Japan in the beginning of 1954. Called "Photorama," these booths charged from 150 to 200 yen—less than the 250 photographers charged, and had photos developed in two to three minutes. In Japanese, these booths were called "nifun shashin" or "two minute photo." The Photorama booths were successful and within a year over 100 booths had been installed throughout Japan. It was not unusual at different times of the year—there were different times when people would go through school applications, etc.—that the line to get into the booth would be an hour long.

Photorama booths were successful to the degree that the conventional photo studios became unhappy about the success that they were having because it was affecting their business. One day, Rosen got a call from the American Consulate saying that there was a minor demonstration going on regarding what they considered to be American unfairness in this particular business. After this even, Rosen worked out one of the earliest franchising deals in Japan by agreeing to make the system that he had developed available. Rosen Enterprises would supply the film to them on a franchise basis and they could use the Photoramas. Roughly another 100 booths were opened on that basis.

Later, with increased competition in the photo booth industry, Rosen Enterprises shut down their Photorama division in the early 1960s.

Coin-Op Imports

Around 1956-57, the Japanese economy had recovered to the point where most people had some form of disposable income, and for the first time, there was a little time for entertainment. Up until the mid-1950s, most Japanese companies worked a full six days, and in smaller companies it wouldn't be unusual to work 6 1/2 days. This free time made Rosen consider entering the entertainment business; the popular entertainment at that point in time in Japan was Pachinko and dance studios and bars and cabarets. Given Service Games' cornering of the slot machine and jukebox markets, Rosen Enterprises turned to coin-op games.

At the time, electro-mechanical coin-operated games were limited, as there were only a handful of manufacturers and nearly all were centered in Chicago; it was a stagnant industry in the United States. Each manufacturer produced 4 to 6 non-pinball games a year. Rosen came to the United States with the idea he would find coin-op games suitable for Japan, who at the time had a cultural interest in hunting and shooting. He then returned to convince the Ministry of International Trade and Industry of Japan to give him a license to import the machines, which were classified as luxury items. After a year of negotiation, he was granted a license to import $1000,000 worth of merchandise.

Rosen became known as a very live customer in the United States, because most distributors had warehouses filled up with used equipment that they really had no marketplace for. In those years trade-ins were a very big part of any distributors business. So when the operator buy a game, two years later he would trade it in. At that time games primarily new were, distributor price to the operator was around $700-750. However, distributors would do trade-ins where they took older machines along with cash, and these used machines just sat in warehouses. The average machine from the United States, when purchased used, cost roughly $200, but duties in Japan, which included shipping costs, were around 200 percent.

Right off the bat, the machines were tremendously successful, with gameplay priced at 20 yen. Given the exchange rate of the time, this equaled a nickel a play. At that time play in the United States was 10 cents, so the parity was 2 for 1. Return on a machine generally were within two months. Popular imported games included Seeburg's "Chicken Sam", "Shoot the Bear" and "Coon Hunt", which all focused on shooting targets. The company stripped the cabinets off the machine, just keeping the mechanisms, and creating the jungle environment and trees and such. They would take one into the arcade and do this, and put these mechanisms behind so all that could be seen was the bear running in the jungle or the raccoon running up and down the trees.

Based on Rosen Enterprises' initial Photorama experience, they worked out a very good relationship with various movie studios, primarily Toho and Shursheko, so that they made their locations available for the company to place their games in. In the case of Toho, the company had an arcade either adjoining or in the lobby of every one of their theaters. At that point, Rosen had the civilian marketplace exclusively for 18 to 24 months before other companies learned how they were importing and under what classification because every importation has certain classifications. They applied under the classification Rosen used and became competitors. The two companies that were most involved were Taito and Nihon Goraku Bussan, or Service Games. Taito had a fair-sized jukebox operation going when they entered the arcade business. Nihon Goraku Bussan had a very very large jukebox operation going on at that time, possibly the largest and had a factory for manufacturing slot machines that were sold to the military.

In 1964 going into 1965, the owners of Nihon Goraku Bussan and Rosen had discussions about merging. They were the larger company based on their jukebox operation. They also owned property and a factory, which Rosen did not. In fall 1965, the two companies decided to merge. In trying to establishing the name of the company, they Sega was the best known name cause it was their brand name and took Enterprises from Rosen Enterprises, because Rosen wasn't a brand name, it was just a company. The company became known as Sega Enterprises Ltd.