Sega was established in Japan in 1951 under the name Service Games when Richard Stewart and Ray LeMaire went to Tokyo under Martin Bromley's request to gain a new distributor for the company. The company started to distribute slot machines to U.S. bases in Japan. During the 1960s, Service Games was renamed to Sega Enterprises Ltd. Sega Enterprises sold their first product, the electro-mechanical game called Periscope which became a worldwide hit. In 1969, Sega Enterprises was acquired by U.S. conglomerate Gulf & Western Industries Inc. In 1983, Sega launched the Sega Computer Videogame SG-1000, the first 8-bit video game platform. In 1986, the CSK Group acquired Sega Enterprises through capital participation. Sega Europe Ltd. was established in Europe, and in 1985, Sega Enterprises Inc. was established in the United States. These regional subsidiaries served as a marketing base for amusement arcade machines. During 1985, Sega released Hang-On, the world's first force feedback game. Sega Enterprises was registered stock on over-the-counter market. In 1988, Sega listed stock on the second section of Tokyo Stock Exchange. Within this year, Sega released the Sega Mega Drive/Genesis, a 16-bit home video game platform that solidified Sega's presence in the console market. During this year, Sega also launched the R-360, the world's first amusement arcade cabinet could rotate 360 degrees in all directions. In 1991, Sega released Sonic the Hedgehog as a competitor mascot to represent Sega against Nintendo'sMario, and with 15 million copies sold, Sonic the Hedgehog spawned multiple sequels over the years and became Sega's flagship franchise. In 1992, Sega released Virtua Racing in order to utilise polygonal 3D-graphics engines, and in 1993, Sega released Virtua Fighter, the world's first polygonal 3D fighting game. In 1994, Sega launched the Sega Saturn, a 32-bit home video game platform. In 1995, Sega launched Print Club Arcades in partnership with Atlus. In 1996, Sega released Sakura Wars, a Japan exclusive sim-based Strategy RPG that became a cultural phenomenon within Japan spawning a multi-media franchise. In 1998, Sega launched the Sega Dreamcast. In 2000, Sega Enterprises changed their name to Sega Corporation. During this year, Sega released Phantasy Star Online, the first networked role-playing game for home video game platforms. In 2001, Sega discontinued the Dreamcast and withdrew from the console hardware industry to become a third-party video game developer and publisher.
Sammy Corporation
Sammy Corporation was founded in 1975 as Sammy Industry Co., Ltd. by Japanese Business magnate, Hajime Satomi. It was formed from Satomi Corporation's manufacturing and marketing divisions for amusement arcade machines. In the 1980s, Sammy marketed and sold Pachislot machines, and in the 1990s, Sammy expanded their portfolio by marketing and selling Pachinko machines. These two business ventures have been the primary pillar of Sammy Corporations revenue. During 1997, Sammy Industry Co., Ltd. changed its name to Sammy Corporation. By 2000, Sammy Corporation was listed in the Tokyo Stock Exchange's 1st section, indicating it as a "large company". Outside of Pachinko and Pachislot industry, Sammy Corporation was also involved in the video game industry as a publisher for fighting games such as the Guilty Gear series, The Rumble Fish series and Survival Arts.
Merger
According to the first Sega Sammy Annual Report, the merger of the two companies happened due to the companies facing difficulties. According to chairman Hajime Satomi, Sega had been in the red for nearly 10 years and lacked a clear financial base. Sammy, on the other hand, feared stagnation and overreliance of its highly profitable pachislot and pachinko machine business, and wanted to diversify its business in new fields, using Sega's broader range of involvement in different entertainment fields. Together, as the Sega Sammy group, the company has grown and acquired and founded multiple companies. Until 2015, the group was structured in four areas:
The "Consumer Business", which contained video games, toys and animation.
The "Amusement Machine Business" which contained Sega's arcade business.
The "Amusement Center Business" which contained Sega's amusement centers and theme parks.
The "Pachislot and Pachinko Business" is the Sammy Corporation and is the main pillar of the group's revenue.
For the better half of the first decade of the holding's existence it has sought the arcade machine sales of Sega and the pachinko sales of Sammy, as its biggest financial incentive. A shift happened in the 2010s, leading to the "Group Structure Reform" in 2015. Casinos, resorts and digital games became the biggest financial incentives. Arcade sales and packaged games from Sega has softened, while growth in pachinko sales is not anticipated. On December 22, 2010, Sega Sammy Holdings acquired the remaining outstanding shares of TMS Entertainment, thus making TMS Entertainment a wholly owned subsidiary of Sega Sammy Holdings. In April 2017, Marza Animation Planet, Sega's CGI animation studio, was restructured into TMS Entertainment.
