Japan’s famous gaming company: Sold core business when it incurred losses; Now gaming company Sega sells software to its rival

1993, some scientists at Harvard discovered a gene extremely important for human embryonic development and named it ‘Sonic Hedgehog’. The name was named after the Sega comic book character ‘Sonic’. This is the same Japanese game, which has sold more than 177 crore units by 2024. Today, Sega is among the top companies in the world in terms of gaming software, but between 1997 and 2001, there came a period when Sega’s existence was on the verge of extinction. Sega’s console ‘Saturn’ was badly defeated by Sony’s PlayStation. Then in 1998, Sega went all out and launched a revolutionary console ‘Sega Dreamcast’. It was the world’s first console to have an in-built modem for Internet and online gaming, but in 2000, Sony announced the ‘PlayStation 2’ with an in-built DVD player. This completely wiped out the Dreamcast market. The company remained immersed in huge losses for five years. The situation became so bad that in January 2001, Sega had to announce that it was ceasing to make gaming hardware (consoles) forever. The company started making gaming software. Current situation- Around Rs 30 thousand crores. Sega is a company of Sega. Sega is currently a company worth around Rs 30 thousand crores. In 2023, Sega acquired Finnish Angry Birds maker Rovio for about Rs 7,000 crore, thereby strengthening its hold in the mobile gaming segment. The company operates its business through regional headquarters in the United States and Europe – Sega of America and Sega-Europe. The company has entered into a strategic partnership in India with NSE listed company Pramara Promotions. Under this, Sega’s licensed characters including Crayon Shinchan will now be made in India as well. Yun was stuck in trouble… Unnecessary experiments – After the successful console ‘Sega Genesis’ launched expensive but low quality peripherals like Sega CD and 32X. This angered the game developers. Even common customers were confused. Disastrous launch of the Saturn console – In 1995, the console ‘Sega Saturn’ was suddenly launched. Retailers did not have stock. Then Sony dropped the price of the PlayStation by $100 less than Sega’s. Sony PlayStation 2’s failure to anticipate the tsunami – Sony had also provided the facility of DVD player in PlayStation 2. Customers preferred the PlayStation 2 rather than purchasing Sega’s Dreamcast. Severe financial losses and cash crunch – the company was losing millions of dollars every month. The debt became so much that bankruptcy was considered certain. Such a comeback… Shift to pure software publisher model – Sega established itself as a third-party software publisher. The advantage of this was that it now started selling games on the platforms of its former rivals. Sega-Sammy’s historic merger – In 2004, Sega merged with Japanese gaming and pachinko giant ‘Sammy Corporation’. Sammy had a huge stock of cash. This eliminated the debt burden. Chairman Okawa’s sacrifice – When Sega was sinking in 2001, the then Chairman Isao Okawa gave about Rs 3200 crore to the company. ₹ personal loan waived off. Donated the shares. Acquisition of Global Studios – Sega purchased the best gaming studios around the world instead of relying solely on ‘Sonic’. Expanded reach. Beginning – American businessmen laid the foundation of this gaming company. In 1940, 3 American businessmen – Martin Bromley, Irving Bromberg and James Humpert laid the foundation as ‘Standard Games’ in Honolulu, USA. The purpose was to provide coin-operated slot machines for the entertainment of American soldiers. In 1951, when these machines were banned, the founders shifted the business to Tokyo. Heritage – Preparation to expand the traditional premium consoles The company’s entire focus is on expanding the traditional premium consoles only. Under this, Sega has canceled the much-awaited one billion dollar ‘Super Game’ project in May 2026. Also announced to return focus on premium console-PC games. Rs 30 thousand crore in the financial year 2026-27. Sales are estimated to exceed Rs. This is how it got its name – After reaching Japan, it was named service games of Japan. Then the name was changed to SEGA by combining two words each of service and games. Biggest Rivals – Its biggest rival in gaming history has been Nintendo. Sony’s PlayStation also pushed the Sega Saturn and Dreamcast out of the market.