Dreamcast
Released in 1988, the Sega Genesis (known as the Sega Mega Drive in Japan, Europe and Brazil) was Sega's entry into the fourth generation of video game consoles. Selling 30.75 million units worldwide, the Genesis was the most successful console Sega ever released. The successor to the Genesis, the Sega Saturn, was released in Japan in 1994. The Saturn was a CD-ROM-based console that displayed both 2D and 3D computer graphics, but its complex dual-CPU architecture made it more difficult to program for than its chief competitor, the Sony PlayStation. Although the Saturn debuted before the PlayStation in both Japan and the United States, its surprise U.S. launch—which came four months earlier than originally scheduled—was marred by a lack of distribution, which remained a continuing problem for the system. Moreover, Sega's early release was undermined by Sony's simultaneous announcement that the PlayStation would retail for US$299—compared to the Saturn's initial price of $399. Nintendo's long delay in releasing a competing 3D console and the damage done to Sega's reputation by poorly supported add-ons for the Genesis (particularly the Sega 32X) allowed Sony to establish a foothold in the market. The PlayStation was immediately successful in the U.S., in part due to a massive advertising campaign and strong third-party support engendered by Sony's excellent development tools and liberal $10 licensing fee. Sony's success was further aided by a price war in which Sega lowered the price of the Saturn from $399 to $299 and then from $299 to $199 in order to match the price of the PlayStation–even though Saturn hardware was more expensive to manufacture and the PlayStation enjoyed a larger software library. Losses on the Saturn hardware contributed to Sega's financial problems, which saw the company's revenue decline between 1992 and 1995 as part of an industry-wide slowdown. Furthermore, Sega's focus on the Saturn over the Genesis prevented it from fully capitalizing on the continued strength of the 16-bit market.
History of Sega
Rosen continued to develop his relationship with Gulf and Western chairman Charles Bluhdorn, and in 1974, Gulf and Western made Sega a subsidiary of an American company renamed Sega Enterprises, Inc. During 1973, Sega would release "Pong-Tron", its first video-based game. Despite late competition from Taito's hit arcade game "Space Invaders" in 1978, Sega profited heavily from the arcade gaming boom of the late 1970s, with revenues climbing to over  million by 1979. During this period, Sega acquired Gremlin Industries, a manufacturer of microprocessor-based arcade games. In 1979, Sega also acquired Esco Boueki (Esco Trading), founded and owned by Hayao Nakayama. This brought Nakayama into the company, where he was placed in charge of Sega's Japanese operations. Rosen later admitted that he mainly purchased Esco Trading for Nakayama's leadership. In the early 1980s, Sega was one of the top five arcade game manufacturers active in the United States, as company revenues rose to $214 million. In 1979, the company released "Head On", which introduced the "eat the dots" gameplay Namco later used in "Pac-Man". During 1981, Sega licensed and released "Frogger", its most successful title up until then. In 1982, Sega introduced the first game with isometric graphics, "Zaxxon".