In May 1984, a software company called CSK Corporation, led by a man named Isao Okawa, helped finance the purchase of Sega Enterprises from Gulf & Western for thirty-eight million dollars. Okawa became chairman. CSK held twenty percent of the shares. The acquisition was small enough that most of the press did not cover it. What followed was not small.
Under new management, Sega launched the Mega Drive in Japan in October 1988. In North America it was called Genesis. The console struggled in Japan but found an audience in the United States. Over its lifetime, it sold more than thirty million units worldwide. For a period in the early nineteen-nineties, Sega had something close to parity with Nintendo in the North American market. The company that had been a distant third became a rival.
The Saturn arrived in November 1994 in Japan, May 1995 in North America. It was announced for September but released in May without warning. Retailers were not prepared. The price was three hundred ninety-nine dollars. Sony announced the PlayStation at the same event for two hundred ninety-nine dollars. The Saturn used quadrilateral polygons where the PlayStation used triangles. Developers found the PlayStation easier to work with. The Saturn sold roughly nine and a half million units worldwide. The PlayStation sold over one hundred million.
On November 27, 1998, Sega released the Dreamcast in Japan. It was the first console of the sixth generation. It had a built-in modem. It supported online play. The entire stock sold out on launch day. On September 9, 1999, it launched in North America backed by a large marketing campaign. Initial sales were strong. Then Sony began building anticipation for the PlayStation 2, which would launch in March 2000 in Japan and October 2000 in North America. Interest in the Dreamcast declined steadily.
By late 2000, Sega's financial position had become unsustainable. The company had accumulated significant debts from years of hardware competition. On January 31, 2001, Sega announced that it would discontinue the Dreamcast after March 31 and restructure as a third-party software developer. In total, 9.13 million Dreamcast units were sold. The decision ended Sega's participation in the console hardware market.
During the Dreamcast years, Okawa had provided over forty million dollars in direct financial support to Sega. The company owed him personally. In early 2001, as Sega prepared to exit hardware, Okawa made two decisions that were not widely publicized at the time. He forgave the debts Sega owed him. And he donated his shares in Sega and CSK — valued at approximately six hundred ninety-five million dollars — to the company.
Isao Okawa died on March 16, 2001, at the age of seventy-four. The cause was heart failure. Two weeks earlier, he had handed the company the means to survive the restructuring. Sega became a third-party developer and continues to operate. The Dreamcast was discontinued as planned. The cost of that survival was not carried by the company alone.