Sega started out in 1940 under the name 'Standard Games'. This was changed in 1951 to 'Service Games' but when the company relocated from Hawaii to Tokyo, 'SErvice GAmes of Japan' was born. Initially creating mechanical coin-operated amusements for American Servicemen, Sega went on to create a number of now classic arcade games such as Frogger, Turbo and Zaxxon.

Sega's first entrant into the home console market was the little-known (at least outside Japan) SG-1000. This was followed by the SG-1000 Mark II and the SG-3000. However, Sega's first major success came with the release of the Master System in 1985 which although it did well, it was overshadowed by the success of the NES.

In 1989, Sega released their most successful console, the Mega Drive (known as the Genesis in the US), which managed to sell well enough to eat away at Nintendo's huge market share in the US but once Nintendo had released a number of key Super Nintendo titles such as Donkey Kong Country and Super Metroid, Nintendo quickly fought back. In a bid to prolong the life of the Mega Drive, two add-ons were developed, the Mega CD (Sega CD in the US) and the 32X. both of which sadly had limited success due to high costs and a lack of must-have titles.

In 1994/1995, Sega releasd the Saturn but although it fared well in Japan, it had a lukewarm reception in the West, particularly once the Sony Playstation was released. Sega's last attempt at the console market (for now at least) was the Dreamcast which was technically a very powerful machine with some first-rate releases such as Shenmue and Crazy Taxi. However, this wasn't enough to prevent the dominance of the Playstation 2 and in 2001 Sega announced that they were moving out of the home console to concentrate on producing software. Their fortunes were mixed with excellent games such as Super Monkey Ball and Out Run 2 shining through. In 2004, a Japanese company called Sammy bought a controlling share of Sega leading to a new company, 'Sega Sammy Holdings'.