SG-1000 in the context of "Light Phaser"

Sega Corporation is a Japanese video game company and subsidiary of Sega Sammy Holdings headquartered in Tokyo. It produces several multi-million-selling game franchises for arcades and consoles, including Sonic the Hedgehog, Angry Birds, Phantasy Star, Puyo Puyo, Super Monkey Ball, Total War, Virtua Fighter, Megami Tensei, Sakura Wars, Persona, The House of the Dead, and Yakuza. From 1983 until 2001, Sega also developed its own consoles.

Sega was founded by Martin Bromley and Richard Stewart in Hawaii as Nihon Goraku Bussan on June 3, 1960. Shortly after, it acquired the assets of its predecessor, Service Games of Japan. In 1965, it became known as Sega Enterprises, Ltd., after acquiring Rosen Enterprises, an importer of coin-operated games. Sega developed its first coin-operated game, Periscope, in 1966. Sega was sold to Gulf and Western Industries in 1969. Following a downturn in the arcade business in the early 1980s, Sega began to develop video game consoles, starting with the SG-1000 and Master System, but struggled against competitors such as the Nintendo Entertainment System. In 1984, Sega executives David Rosen and Hayao Nakayama led a management buyout, with backing from CSK Corporation.

In the history of video games, the 3rd generation of video game consoles, commonly referred to as the 8-bit era, began on July 15, 1983, with the Japanese release of two systems: Nintendo's Family Computer (commonly abbreviated to Famicom) and Sega's SG-1000. When the Famicom was released outside of Japan, it was remodeled and marketed as the Nintendo Entertainment System (NES). This generation marked the end of the North American video game crash of 1983, and a shift in the dominance of home video game manufacturers from the United States to Japan. Handheld consoles were not a major part of this generation; the Game & Watch line from Nintendo (which started in 1980) and the Milton Bradley Microvision (which came out in 1979) that were sold at the time are both considered part of the previous generation due to hardware typical of the second generation.

Improvements in technology gave consoles of this generation improved graphical and sound capabilities, comparable to the golden age of arcade games. The number of simultaneous colors on screen and the palette size both increased which, along with larger resolutions, more sprites on screen, and more advanced scrolling and pseudo-3D effects, which allowed developers to create scenes with more detail and animation. Audio technology improved and gave consoles the ability to produce a greater variation and range of sound. A notable innovation of this generation was the inclusion of cartridges with on-board memory and batteries to allow users to save their progress in a game, with Nintendo's The Legend of Zelda introducing the technology to the worldwide market. This innovation allowed for much more expansive gaming worlds and in-depth storytelling, since users could now save their progress rather than having to start each gaming session at the beginning. By the next generation, the capability to save games became ubiquitous—at first saving on the game cartridge itself and, later, when the industry changed to read-only optical disks, on memory cards, hard disk drives, and eventually cloud storage.