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The Sega Genesis, known as the Mega Drive[b] outside North America, is a 16-bit fourth generation home video game console developed and sold by Sega. It was Sega's third console and the successor to the Master System. Sega released it in 1988 in Japan as the Mega Drive, and in 1989 in North America as the Genesis. In 1990, it was distributed as the Mega Drive by Virgin Mastertronic in Europe, Ozisoft in Australasia, and Tectoy in Brazil. In South Korea, it was distributed by Samsung Electronics as the Super Gam*Boy and later the Super Aladdin Boy.[c]

Designed by an R&D team supervised by Hideki Sato and Masami Ishikawa, the Genesis was adapted from Sega's System 16 arcade board, centered on a Motorola 68000 processor as the CPU, a Zilog Z80 as a sound controller, and a video system supporting hardware sprites, tiles, and scrolling. It plays a library of more than 900 games on ROM-based cartridges. Several add-ons were released, including a Power Base Converter to play Master System games. It was released in several different versions, some created by third parties. Sega created two network services to support the Genesis: Sega Meganet and Sega Channel.

In Japan, the Mega Drive fared poorly against its two main competitors, Nintendo's Super Famicom and NEC's PC Engine, but it achieved considerable success in North America, Brazil, and Europe. Contributing to its success was its library of arcade game ports, the popularity of Sega's Sonic the Hedgehog series, several popular sports franchises, and aggressive youth marketing that positioned it as the cool console for adolescents. The 1991 North American release of the Super Nintendo Entertainment System triggered a fierce battle for market share in the United States and Europe known as the "console war".[4][5] This drew attention to the video game industry, and the Genesis and several of its games attracted legal scrutiny on matters involving reverse engineering and video game violence. Controversy surrounding violent games such as Night Trap and Mortal Kombat led Sega to create the Videogame Rating Council, a predecessor to the Entertainment Software Rating Board.

30.75 million first-party Genesis units were sold worldwide. In addition, Tectoy sold an estimated 3 million licensed variants in Brazil, Majesco projected it would sell 1.5 million licensed variants of the system in the United States and smaller numbers were sold by Samsung in South Korea. By the mid-2010s, licensed third-party Genesis rereleases were still being sold by AtGames in North America and Europe. Many games have been re-released in compilations or on online services such as the Nintendo Virtual Console, Xbox Live Arcade, PlayStation Network, and Steam. The Genesis was succeeded in 1994 by the Sega Saturn.

Nakayama received permission to proceed with this project, leading to the release of Sega's first home video game system, the SG-1000, in July 1983.[10] While it had sold 160,000 units in Japan, far exceeding Sega's expectations,[11][12] sales at stores were dominated by Nintendo's Famicom which had been released the same day. Sega estimated that the Famicom outsold the SG-1000 by a 10-to-1 margin.[10] The SG-1000 was replaced by the Sega Mark III within two years.[13] In the meantime, Gulf+Western began to divest itself of its non-core businesses after the death of company founder Charles Bluhdorn,[14] so 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 Sega Enterprises, Ltd.[15]

In 1986, Sega redesigned the Mark III for release in North America as the Master System. This was followed by a European release the next year. Although the Master System was a success in Europe, and later in Brazil, it failed to ignite significant interest in the Japanese or North American markets, which, by the mid-to-late 1980s, were both dominated by Nintendo.[16][17][18] With Sega continuing to have difficulty penetrating the home market, Sega's console R&D team, led by Masami Ishikawa and supervised by Hideki Sato,[19] began work on a successor to the Master System almost immediately after that console launched.[20][21]

In 1987, Sega faced another threat to its console business when Japanese computer giant NEC released the PC Engine amid great publicity.[22] To remain competitive against the two more established consumer electronics companies, Ishikawa and his team decided they needed to incorporate a 16-bit microprocessor into their new system to make an impact in the marketplace and once again turned to Sega's strengths in the arcade industry to adapt the successful Sega System 16 arcade board into architecture for a home console.[21][23] The decision to use a Motorola 68000 as the system's main CPU was made late in development, while a Zilog Z80 was used as a secondary CPU to handle the sound due to fears that the load to the main CPU would be too great if it handled both the visuals and the audio.[21] The 68000 chip was expensive and would have driven the retail price of the console up greatly, but Sega was able to negotiate with a distributor for a tenth of its price on an up-front volume order with the promise of more orders pending the console's future success.[10]

The appearance of the Mega Drive was designed by a team led by Mitsushige Shiraiwa that drew inspiration from audiophile equipment and automobiles. Shiraiwa said this more mature look helped to target the Mega Drive to all ages, unlike the Famicom, which was aimed primarily at children.[24] According to Sato, the Japanese design for the Mega Drive was based on the appearance of an audio player, with "16-bit" embossed in a golden metallic veneer to create an impression of power.[12]

The console was announced in the June 1988 issue of the Japanese gaming magazine Beep! as the Mark V, but Sega management wanted a stronger name. After reviewing more than 300 proposals, the company settled on "Mega Drive". In North America, the name was changed to "Genesis".[23] Rosen said he insisted on the name as he disliked "Mega Drive" and wanted to represent "a new beginning" for Sega.[25] Sato said some design elements changed, such as the gold "16-bit" wording, in case it was mistaken for yellow. He believed the changes represented different Japanese and American cultural values.[12]

Sega released the Mega Drive in Japan on October 29, 1988, though the launch was overshadowed by Nintendo's release of Super Mario Bros. 3 a week earlier. Positive coverage from magazines Famitsu and Beep! helped to establish a following.[23] Within two days of release, the console's initial production run sold out.[26] However, Sega only managed to ship 400,000 units in the first year. In order to increase sales, Sega released various peripherals and games, including an online banking system and answering machine called the Sega Mega Anser.[23] Nevertheless, the Mega Drive was unable to overtake the venerable Famicom[27] and remained a distant third in Japan behind Nintendo's Super Famicom and NEC's PC Engine throughout the 16-bit era.[28]

Sega announced a North American release date for the system on January 9, 1989.[29] At the time, Sega did not possess a North American sales and marketing organization and was distributing its Master System through Tonka. Dissatisfied with Tonka's performance, Sega looked for a new partner to market the Genesis in North America and offered the rights to Atari Corporation, which did not yet have a 16-bit system. David Rosen made the proposal to Atari CEO Jack Tramiel and the president of Atari's Entertainment Electronics Division, Michael Katz. Tramiel declined to acquire the new console, deeming it too expensive, and instead opted to focus on the Atari ST. Sega decided to launch the console through its own Sega of America subsidiary, which executed a limited launch on August 14, 1989, in New York City and Los Angeles. The Genesis was released in the rest of North America later that year.[30]

The European version of the Mega Drive was released in September 1990,[31] at a price of 189.99,[32][33] i.e. $337 (equivalent to $732 in 2023). The release was handled by Virgin Mastertronic, which was later purchased by Sega in 1991 and became Sega of Europe.[34] Games like Space Harrier II, Ghouls 'n Ghosts, Golden Axe,[33] Super Thunder Blade, and The Revenge of Shinobi were available in stores at launch. The console was also bundled with Altered Beast.[32] The Mega Drive and its first batch of games were shown at the 1990 European Computer Entertainment Show (ECES) in Earl's Court.[35] Between July and August 1990, Virgin initially placed their order for 20,000 Mega Drive units. However, the company increased the order by 10,000 units when advanced orders had exceeded expectations, and another 10,000 units was later added following the console's success at the ECES event. The projected number of units to be sold between September and December 1990 had eventually increased to 40,000 units in the United Kingdom alone.[36]

For the North American market, former Atari Corporation Entertainment Electronics Division president and new Sega of America CEO Michael Katz instituted a two-part approach to build sales. The first part involved a marketing campaign to challenge Nintendo head-on and emphasize the more arcade-like experience available on the Genesis,[48] with slogans including "Genesis does what Nintendon't".[23] Since Nintendo owned the console rights to most arcade games of the time, the second part involved creating a library of recognizable games which used the names and likenesses of celebrities and athletes, such as Pat Riley Basketball, Arnold Palmer Tournament Golf, James 'Buster' Douglas Knockout Boxing, Joe Montana Football, Tommy Lasorda Baseball, Mario Lemieux Hockey, and Michael Jackson's Moonwalker.[22][49] Nonetheless, Sega struggled to overcome Nintendo's presence in consumers' homes.[50] Tasked by Nakayama to sell one million units within the first year, Katz and Sega of America sold only 500,000.[23] At the Winter Consumer Electronics Show (Winter CES) in January 1990, the Sega Genesis demonstrated a strong line-up of games which received a positive reception for approaching arcade-quality graphics and gameplay as well as for providing non-arcade experiences such as Phantasy Star II.[51]

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