The Japanese company Sega will undoubtedly be etched in video game history as a pioneering force in the industry and celebrated for its iconic titles and groundbreaking technological advancements. From classics like Frogger and Sonic the Hedgehog to many others, Sega has experienced remarkable successes, near bankruptcy, and a recent comeback while maintaining its legendary status. Interestingly, the company began manufacturing slot machines in the US in the 1940s and 1950s. Join us on a captivating journey through Sega’s rich and fascinating history for more amazing insights.
Level One: Pinball and Slot Machines
The early years of gaming were, in fact, the early years of automated gambling. The US-based slot machine provider Service Games established its operations across post-war Asian army bases and became Service Games of Japan after the USA outlawed gambling in the 1950s. During this decade, the Sega brand was linked to pinball machines, jukeboxes, photo booths, and slot machines. The slots at Japanese online casinos that are available today were modeled after these early slots and are now the most played games at online casinos.
This groundwork set the stage for Sega’s future ventures into electronic entertainment. In 1966, the company made its first foray into game development with Periscope, an electro-mechanical game in the popular genre of torpedo shooters, which became a hit across US, UK, and European penny arcades by the end of the 60s. It was hailed as the most profitable arcade game of the decade, allowing Sega to create more than 15 new games over the next few years.
Level Two: Video Games at the Arcade and Home
Video games were all the rage across arcades and shopping malls in the late 1970s, with Sega as a significant player in the booming market. Its titles were among the first of the era to use microchips for gameplay and control. The legendary Frogger became a great success, while their Head-On inspired the gameplay of the later Pac-Man franchise.
Competition is always a great motor of invention, and indeed, when Sega got wind that a rival was about to produce a video game console for home use, they did the same. Soon after, Sega’s SG-1000 launched and started their age-long rivalry with Nintendo. The 1983 console was a success, tripling the company’s initial unit sales estimates.
Its follow-up, the 1985 Master System, became a hit in Europe and South America but struggled in the North American market, faced with stiff competition by Nintendo. A year later, the company released its best-selling car-race simulation Out Run, one of the most memorable titles of the 80s.
Level Three: Mega Hits and Console Wars
Even as Sega dominated the arcade market at the end of the 80s and the beginning of the 90s, it struggled in the home console arena. Its 1989 console effort, known as Sega Genesis in the US and Mega Drive in the rest of the world, lagged against the competing 16-bit Atari and Nintendo products.
Nevertheless, the company began gaining ground in the markets under new leadership and with a more aggressive marketing strategy. Sega can be thanked for launching the trend of celebrity-branded sports games and endless franchises!
In 1991, Sega released Sonic the Hedgehog, a game symbolic of the console and a character that became its mascot. Record game sales saw the Sega Genesis outsell Nintendo 2 to 1, and things stayed that way for the better part of the early 90s. After the following two console models recorded much slower sales, Sega tried its hand at PC games with some success. However, its efforts to launch a chain of amusement parks are best left on the ash heap of history.
As Sony and Nintendo regained dominance in the console market in the late 90s, Sega began to struggle financially. During this time, Nintendo’s Pokémon franchise was also gaining immense popularity, further intensifying competition in the gaming industry. Sega saw Dreamcast, its next-gen gaming console, as a way out of the crisis. Initial interest in 1998 and 1999 was high, but sales soon began to lag, especially when Sony announced the PlayStation 2, undermining holiday figures. In 2001, Sega sold the last Dreamcast console and announced it would switch to creating games for the competing platforms.
Final Boss: Still Playing the Game
After several lean years, the company merged with the Sammy Corporation in 2006 and expanded under the new management. Japan remained a stronghold for its titles, while the Football Manager franchise, produced by a studio owned by Sega Europe, soon became a worldwide hit.
The early years of the next decade saw the company turn to the booming mobile gaming market and make significant inroads. The Covid crisis forced the company to shuffle the business and management deck yet again, but it’s titles still did well in creative terms. At the end of a difficult year, Metacritic put Sega at No. 1 in its game publisher rankings for 2020.
It’s impossible to imagine the landscape and development of the gaming industry without this Japanese giant. From its pinball and slot machine beginnings, the great arcade hits of the 1970s and 80s, and the speedy Hedgehog, this company has long entertained us. Long may it continue.
