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Industry History

Through a series of articles, I detail the history of the video game industry in regards to specific companies, consoles, and pieces of hardware.

Game Consoles

In this section I provide in depth reviews of game consoles, past and present, from my own collection. Included are details about the consoles' history, specs, and hi-resolution pictures.

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A lot of first- and third-party hardware and software items are released that don't get the recognition that they deserve. In this section, I highlight some of the best.

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Learn about me, my collection, how I got started colleting, and where I can see my collection going in the future. I also detail why I decided to make this site, and provide a means for you to contact me.

The History of Sega Part I

Sega's history can be called no less than "epic." It's a tragic tale of the rise and fall of a great company, divided amongst itself. In this series I will outline the history of Sega - from the company's begginnings in the home console market, to it's preceived victory in the 16-bit console wars, right through to the point where internal conflict and a total lack of direction ultimately ended up being the company's near demise.

Service Games and Rosen Enterprises

Marty Bromley formed a company in 1940 called Standard Games, which was founded to provide coin operated entertainment machines to military bases in Hawaii. Many of these game machines were gambling type machines, where coins would be inserted and a game would be played, which may or may not yield a monetary return. In 1952, the United States made coin operated gaming machines, including slot machines, illegal. Marty Bromley saw a business opportunity in this and created a new company based around the export of the newly outlawed coin gambling machines to Japan. This new company was called Service Games.

Meanwhile in Japan, David Rosen - a member of the American military who was stationed in Japan during the Korean War - started a business based around exporting Japanese art to be sold in other countries. This eventually led itself to other photo-related business, including photo booths designed to inexpensively produce photo IDs. As a result of World War II, a continuation of American support (and money) was continuously flowing in to Japan, and David Rosen saw an opportunity to make some of that his own by importing electromechanical arcade machines. Rosen Enterprises was born.

In 1964, Rosen Enterprises would merge with Service Games, resulting in a merged company with a new name - Sega Enterprises, Ltd. (SEGA coming from the first two letters of the words SErvice and GAmes). With this new found combination of Marty Bomley's ability to procure and export machines to Japan, and David Rosen's ability to market them with his great understanding of Japanese culture and business sense, Sega was a forced to be reckoned with. Their major competitor at the time was Taito - which would also later go on to produce popular video games like Bubble Bobble and Bust-A-Move.

In 1966, Sega would begin the manufacture of their own unique arcade machines, the first of which was called Periscope. Periscope was a physically massive machine, at nearly 10 feet deep, 6 feet wide and 8 feet tall. The popularity of the game was so immense that Sega began manufacturing and exporting units to America. Since the unit was designed as strictly an entertainment device and not a gambling device, US legality wasn't an issue. Periscope would sit in pinball arcades, which were at that time gaining quickly in popularity with American audiences.

The Rise of Video Games

The History of Sega Part IEventually, the popularity of electromechanical arcade machines, including pinball machines, would falter to the popularity of arcade video games. In 1972, Atari released PONG. While not the first video game by any means, PONG was the first arcade game to reach mainstream popularity. Throughout most of the mid 1970s, although they were growing in popularity, video games would remain largely a novelty. PONG would give rise to many clones, and even to home console systems like the Magnavox Odyssey which tried to do much more with the original "two paddles and a ball" design than was originally intended.

In 1978, Sega's main competitor Taito released the immensely popular Space Invaders. The game took the world by storm, and Taito had trouble manufacturing units to keep up with the demand of arcades who wanted to purchase them. The game would be responsible for a shortage of 100 yen coins in the Japan during its first year of release, and would eventually go on to gross US$2 billion worldwide by 1982.

Sega purchased an electronics company in California called Gremlin Industries to aid in the development in electronics and arcade hardware. In 1979, Sega and Gremlin released their first electronic game - Head On. In Head On, the player controls a car which drives around a maze picking up dots while attempting to avoid the rival cars which may attempt to crash in to the player. The game was fairly popular and would eventually be cloned by other companies, including Nintendo. Head On is often cited as being Namco's primary inspiration for Pac Man, and looking at screen shots of the game today, it's easy to see why.

The History of Sega Part ISega's hit game library quickly began to grow, and Sega became famous in the booming arcade industry for its complex and colorful games. Turbo was the first racing game to utilize the now common third-person 3/4 perspective that is common amongst racing games. Before this, racing games were top-down. Turbo was also the first game to utilize sprite scaling with full color sprites - a technique that has been common in 2D games for all platforms ever since. Zaxxon was another immensely popular game that would see ports on many home consoles in the future. It was easily Sega's most popular arcade title, and featured isometric 3D gameplay and very colorful graphics.

The arcade industry was booming, and Sega was one of the leaders.

Early 80's: The Home Console Market

The video game crash of 1983 could be its own entire article (and likely will be). Although arcade sales were still somewhat healthy in the early 80's, the home video game market hit a brick wall. Having flooded the market with so much garbage software, Atari saw dismal sales of its home gaming hardware and that was a real industry problem - since Atari was supposed to be the leader in the home console market.

In Japan, home video games had not yet reached nearly the success of the social arcade gaming scene. Even still, in 1982 - a year before the home market video game crash in the US - Japan's gaming industry was suffering. Two of the largest arcade market leaders, Sega and Nintendo, both needed to move fast in Japan. Fortunately, both of them moved in the same direction... toward gamers' living rooms.

Nintendo's Famicom vs the Sega SG-1000

The History of Sega Part IOn Friday July 15, 1983, Nintendo released the Family Computer (Famicom) which would later go on to become the Nintendo Entertainment System in the United States, for 14,800 yen. On the same day, Sega released the SG-1000 home console for 15,000 yen. The battle was on between Nintendo and Sega for the home console market - a battle which would rage on for almost 20 years.

The History of Sega Part IAlthough superior to the Famicom on paper in terms of raw processing power (Mhz), the SG-1000 was no match for the Famicom. Why? Software. SG-1000 games were largely the same as arcade games of the time; single-screen games with almost static sprites and reliance on replay value through high scores. The most successful Famicom titles took a different approach.

Even though the Famicom ran at 1.79Mhz compared to the 3.57Mhz CPU in the SG-1000, the Famicom allowed hardware scrolling through hardware. This allowed developers to do "more with less" on Famicom hardware. Some of the most successful games on the Famicom became more about the gamer's journey through the story of a game vs. a high score when it was all said and done.

The Famicom would go on to be released as the Nintendo Entertainment System in North America and in various incarnations would eventually be made available in nearly every country of the world. The SG-1000 would only see limited release in various parts of Asia, New Zealand, Australia, France, Italy, Spain, and parts South Africa. While somewhat successful in its own right, compared to the Famicom it was a failure.

The Sega SC-3000 and Sega SG-1000 II

Immediately following the video game crash of 1983, and before the Nintendo Entertainment System took the American market by storm in 1985, American and European gamers began to gravitate more toward home computers for their gaming fix. Platforms like the Commodore 64 and the ZX Spectrum were gaining immense popularity.

The History of Sega Part IIn July 1984 Sega released an updated version of the SG-1000 in order to try and get a piece of that market. The SG-1000 II was no more than a redesigned SG-1000 console. The SG-1000 II looked less like a toy than the first version of the SG-1000, and it added a keyboard option (the SK-1100). The SG-1000 II retained backwards compatibility support for all of the SG-1000 games, and the controller was re-designed to create a more Famicom-like two-button gamepad.

The History of Sega Part ISega also released a Commodore 64-style computer that ran on SG-1000 hardware - the SC-3000. The SC-3000 was compatible with all SG-1000 games and was essentially an SG-1000 and SK-1100 keyboard add-on in a single form factor. The SC-3000H was an upgraded version of the SC-3000 with more RAM and a higher quality keyboard. The SC-3000 could be fitted with an option SF-7000 add-on module which added 64KB of RAM and 8KB of ROM memory, an RS-232 serial port, a Centronics parallel port, and a 3-inch floppy disk drive.

The History of Sega Part IBoth the SG-1000 SG-1000 II and the SC-3000/SC-3000H saw limited success in New Zealand and Taiwan, but failed to catch on elsewhere - including Japan. The SG-1000, SG-1000 II, and the SC-3000/H would ultimately be only a small thorn in the side of the colossus phenomenon known to the world as the Famicom/Nintendo Entertainment System. This initial battle was not for naught, however, as Sega gained console research and design, and during the SG-1000's lifetime had unknowingly hired two individuals who would become legends in the industry - Yuji Naka and Yu Suzuki.

The Sega Mark III

Having failed to topple the Nintendo empire with the SG-1000 line, Sega was now playing catch-up. They knew that in order to stand a chance they needed one thing in particular - more powerful, specialized hardware - which would give rise to more complex and immersive games.

The History of Sega Part IThey had learned a lot from the hardware limitations of the SG-1000 and its siblings. Most notably that CPU speed wasn't everything, and that the video processor, which would allow complex graphics processes to be offloaded from the CPU and performed in hardware, was also very important to developers. The SG-1000 utilized an off-the-shelf Texas Instruments video processor, while competitors like the Commodore 64 and the Famicom were using specialized hardware. Sega had to make a change.

The History of Sega Part IThe Sega Mark III was released in Japan in October of 1985 for 15,000 yen - right around the same time Nintendo was starting to push the Famicom in to the US market as the Nintendo Entertainment System. The new Mark III contained a highly customized version of the SG-1000 graphics processor, which now supported hardware scrolling, larger and more colorful sprites, and a palette boost from 16 colors on the SG-1000/II to 32 on-screen colors from a palette of 64.

Sega also replaced the NEC 780C CPU, a clone of the Zilog Z80 CPU, with a real Zilog Z80. The result was a slight bump in speed from 3.57Mhz to 3.58Mhz. More importantly, the new CPU would allow the system to address more memory. 2KB of RAM on the SG-1000 to 16KB on the Mark III. In a brilliant move, Sega retained all backwards compatibility with the SG-1000 cartridge and Sega Card games - a move that Atari had neglected with the Atari 5200, which was a factor in that console's quick demise.

A Mark III for the World: The Sega Master System

Even with the upgraded hardware, Sega's Mark III failed to put a dent in Nintendo's stranglehold of the Japanese home console market. Upon release in Japan, sales were not nearly as good as Sega had hoped. Still, Sega would not give up and decided to turn its sights on the American market. The Mark III was given a quick visual refresh and released in the North American market in 1986 as the Sega Master System.

The History of Sega Part IThe Master System, Sega model 3010, was released in the US for $199 and came bundled with two controllers, Hang-On and Astro Warrior. For a bit more, players could purchase a higher-end package which came with the Sega Light Phaser light gun packed in, along with a combination cartridge containing Hang-On and Safari Hunt.

Sega would go on to release several great games for the Mark III and Master System in all markets. Yu Suzuki produced two great ports of Hang-On and Space Harrier on the Mark III hardware. Other hits like Fantasy Zone, Wonder Boy, Choplifter, Zaxxon, After Burner, Shinobi, and the Alex Kidd series (Sega's unofficial mascot for a time) surly didn't hurt the Master System's cause.

The History of Sega Part IBy the end of 1987, Nintendo held 90% of the home console market in North America. Here, Sega had all but given up on the Master System, and sold all marketing and production rights to Tonka Toys. In Europe, however, the Master System saw great success against Nintendo's NES, and continued to be supported for many years. The Master System also so great success in Brazil, which is often attributed to Brazil's close ties with production of the Master System hardware. In Brazil, Sega would ultimately sell marketing and production rights to a company called Tectoy, who is still producing Master System hardware today.

In 1987, Sega made one last ditch effort in Japan to move remaining Master System hardware. A re-designed Mark III, which looked similar to the North American Master System was released in Japan. The console featured a slightly different cartridge and Sega Card slot than the North American version to accommodate the SG-1000 and Mark III cartridges and Sega Cards, which were a different shape than North American variants (Sega used this as a type of region lock). Also, the upgraded FM Sound Unit hardware, which was available as an add-on for the Mark III for Japan but was never released in any other market, was integrated in to the Japanese version of the Master System.

Further upgrades for the Japanese Master System included a built-in adapter for the 3D Glasses add-on as well as built-in rapid fire capabilities for both controller ports. Both of these were add-on only features for Master System consoles elsewhere in the world.

The History of Sega Part ISega would go on to later release stripped-down versions of the Master System, including the Master System II, as budget alternatives to future consoles. It would see only limited success with these in most markets, largely with the exception of Brazil, who would go on to receive a Master System III and other future reincarnations of the Zilog Z-80-based Master System hardware.

Learning from the Master System's Failure

The battle between the Master System and the NES was up-hill the entire time. Getting a foothold in the Brazilian and European markets would eventually mean that Sega would be almost guaranteed great success in those markets with its next console, but falling far behind in Japan and North America really hurt.

Being late to the game with a solid competitor was Sega's first mistake in attempting to de-throne Nintendo. Though the Master System was released only a year or so after the NES in North America, the Mark III was released 2 years after the Famicom in Japan, where it was considered a failure. This ultimately meant that good first-party game titles that could have originated from some of Sega of Japan's best developer talent would be lost on the rest of the world. Sega would take this mistake to heart and never repeat it again.

Another point against the Master System was a lack of third party support, which resulted in a smaller number of quality titles than was available on the NES. Due to extremely restrictive development contracts with third parties, which basically stated that third parties would not develop a given title for a competitor's game system if it was developed for the NES initially, Nintendo had a stranglehold on some great third party companies. As a result, the Master System never got ports of excellent games from companies like Konami and Capcom. Fortunately for Sega, third party developers were getting tired of these restrictive contracts by the end of the 1980's, and were beginning to defect to other consoles, effectively forcing Nintendo to re-think the restrictiveness of its contracts.

After the Master System battle, Sega was battle scarred and bruised - but ultimately experienced. They had thrown a total of five major console releases (SG-1000, SG-1000 II, Mark III, SC-3000/H, and the Master System) at the NES and not managed to make a dent. They knew that the NES was getting very long in the tooth by the late 80's, and saw that Nintendo had been resting on its laurels for too long. They knew that if they were going to beat Nintendo in the next generation of the home console war that they needed to strike first, and strike hard.


 
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