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In 1940, Marty Bromley formed Standard Games and operated slot machines in Hawaii, but it was outlawed 12 years later and Bromley decided to move his business to Japan and rename it Service Games. It was during that time that David Rosen, an American Air Force Officer, began importing coin-operated machines to Japan under the name Rosen Enterprises. The two companies negotiated a merger to become SEGA Enterprises and soon after, they designed and manufactured their first arcade machine, Periscope.
The 70’s saw a total transformation of the arcade industry, so to keep up with the market, Sega began building video arcade games and acquired a distribution company run by Hayao Nakayama, who would later serve as Sega’s CEO. Sega became a leader in the arcade market, but the video game crash of 1983 would force Sega into uncharted territory; the living room. Sega entered the home console market with the SG-1000, which was largely a failure compared to Nintendo’s Famicom, but it helped ignite a creative renaissance within the company.
After the lackluster launch of the SG-1000 Mark II, Sega decided to try its luck in the American market with the Mark III, which they redesigned as the Sega Master System. This time, Sega delivered hits like Space Harrier, Outrun, and Shinobi, and an original game exclusive to the console, Alex Kidd. in Miracle World. Still, Sega couldn’t contend with Nintendo and it was back to the drawing board. The third time around, though, Sega had a plan - or more accurately - a Mario-killer. Sega launched the Mega Drive, rechristened it as the Genesis for the West, and packaged it along with its new mascot, Sonic the Hedgehog. Sonic went on to sell 15 million copies worldwide and drive Sega to capture over half the market share from Nintendo, sparking a fierce rivalry for years to come.
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