President and CEO · Sega Enterprises · b. 1932 · 16-bit / 32-bit
The aggressive Sega president who bought the company in 1984, drove it to 60% of the US console market with the Genesis — and then destroyed that lead by abandoning it too early for the Saturn.
Hayao Nakayama took control of Sega in 1984, when he and David Rosen assembled a group of investors to purchase Sega Enterprises for $38 million. The opportunity arose after the death of Gulf and Western's Charles Bluhdorn, as the conglomerate began divesting its secondary businesses, and it left Nakayama as CEO of a company he would run with combative, risk-hungry conviction for the next fourteen years. His defining bet was consumer hardware. Nakayama advocated aggressively for Sega's entry into the home console market, driving the development and launch of the Master System and then the Mega Drive, released in Japan on 29 October 1988 and rebranded as the Genesis for its North American launch on 14 August 1989. Combined with the marketing aggression of Tom Kalinske's Sega of America — the "Genesis does what Nintendon't" campaign and the creation of Sonic — the strategy worked spectacularly. By the mid-1990s Sega commanded as much as 60 percent of the American console market, an achievement no one had thought possible against Nintendo. Then he threw it away. Nakayama made the fateful decision to shift Sega's focus from the Genesis to the Saturn, a judgement based on the systems' relative performance in Japan rather than in the West — where the Genesis was still thriving. It is widely cited as the crucial miscalculation that undid Sega's position, abandoning a dominant, profitable platform and its loyal American audience for a successor that would fail. The chaotic surprise launch of the Saturn, the simultaneous existence of the 32X and Sega CD, and the resulting collapse of retailer and consumer trust all flowed from this strategic incoherence. As Sega's finances deteriorated, Nakayama resigned as president in January 1998 in favour of Shoichiro Irimajiri, becoming vice-chairman of the arcade division. His departure has been linked in part to the collapse of the proposed Sega-Bandai merger and to the company's dismal 1997 performance. He is remembered as the man who made Sega a genuine rival to Nintendo and then, through impatience and a misreading of his own markets, presided over the destruction of everything he had built.