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History
The story of the Sega Mark III does not begin in Japan, nor even in video games. In 1940, three American businessmen, Martin Bromley, Irving Bromberg and James Humpert, formed a company called Standard Games in Honolulu, Hawaii. Their business was simple: place coin-operated amusement machines, mostly slot machines and jukeboxes, on the military bases that were filling up with American servicemen. After the war, the partners wound down Standard Games and set up a new company named Service Games, a name that nodded to its military clientele.
The company soon moved its operations to Japan, and in May 1952 “Service Games of Japan” was registered. It is from this name that Sega takes its own: SErvice GAmes. The early years were not smooth. Service Games ran into trouble with authorities over alleged bribery and tax evasion, and between 1959 and 1960 it was banned from US air bases in Japan and the Philippines, which were its main customers. On May 31, 1960, Service Games of Japan was formally dissolved. A few days later, on June 3, 1960, a successor company called Nihon Goraku Bussan (“Japan Entertainment Products”) was founded, and it took over the assets of its predecessor.
Meanwhile, a second American in Tokyo was building a very different business. In 1954, David Rosen moved to Japan and founded Rosen Enterprises, originally to export Japanese art. When Rosen imported coin-operated instant photo booths, they became a surprise hit with the Japanese public, and the company expanded into importing coin-operated electro-mechanical games. In 1965, Nihon Goraku Bussan acquired Rosen Enterprises, and the merged company became Sega Enterprises, Ltd. Rosen took the lead of the new company. A year later, Sega released Periscope, a submarine-simulation game that became a worldwide arcade hit.
In 1969, Sega was sold to the American conglomerate Gulf+Western, although Rosen stayed on as head of the Sega division. In 1974, Gulf+Western made Sega a subsidiary of a newly created American company, Sega Enterprises, Inc. In 1979, Sega acquired Esco Boueki (Esco Trading), an arcade distribution company founded and owned by a Japanese businessman named Hayao Nakayama. That acquisition would prove to be one of the most important of the company’s history, because Nakayama would soon become its leader.
By the early 1980s, Sega was one of the top five arcade game manufacturers active in the United States, and its revenues had climbed to $214 million. Then came the arcade downturn of 1982. Hit hard, Gulf+Western sold Sega’s North American arcade manufacturing business and the licensing rights to its arcade games to Bally Manufacturing in September 1983, keeping only the North American R&D operation and the Japanese subsidiary, Sega Enterprises, Ltd. Nakayama, by then president of the Japanese company, argued that Sega should use its hardware expertise to enter the home console market in Japan, which was still in its infancy.
The result was the SG-1000, released on July 15, 1983. By a famous coincidence, Nintendo launched its Family Computer (Famicom) in Japan on exactly the same day. The comparison was unkind to Sega. The SG-1000’s three launch games were ports of arcade titles that lacked the name recognition of the Famicom’s launch lineup, which included Donkey Kong, Donkey Kong Jr. and Popeye. The SG-1000 sold only about 160,000 units in its first year.
Shortly after launch of the SG-1000, Gulf and Western began, the parent company of Sega, decided to divest itself of its non-core businesses after the death of company founder Charles Bluhdorn. Hayao Nakayama and former Sega CEO David Rosen arranged a management buyout of the Japanese subsidiary in 1984 with financial backing from CSK Corporation, a prominent Japanese software company. Nakayama was then installed as CEO of the new Sega Enterprises, Ltd. Following the buyout, Sega decided to update the SG-1000 with the release of the SG-1000 II.
Release
On July 31, 1984, Sega released the SG-1000 II. The difference between it and the SG-1000 were mostly cosmetic. The new model featured two detachable joypads instead of the hardwired joysticks. The SG-1000 II controller (SJ-150) was also slightly updated and could now be housed on the sides of the console, a design concept inspired by Nintendo’s Famicom. Finally, the expansion port was moved to the front of the unit.
Demise
Ultimately, even if with a great game catalogue, the SG-1000 II was not able to compete with the Nintendo Famicom which was more powerful. Sega realized that they would need a serious hardware upgrade and not just cosmetic change to become a serious contender to the Famicom. With this in mind, Sega worked on developing their new console, the Mark III (also known as the Master System).
Games
All the games released for the SG-1000 are also compatible with the SG-1000 II. See the SG-1000 games section for more information.