Sammy Corporation

• 1. Introduction

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  Sammy Corporation began its life not as a gaming company, but as a spin-off of an arcade division. On the 1st of November 1975, a manufacturing and marketing unit broke away from Satomi Corporation and set itself up independently in Japan. What emerged from that split would eventually absorb one of the most famous names in video games: Sega. How does a company that started selling slot machines and arcade cabinets end up purchasing a controlling stake in Sega for $1.1 billion? The answer runs through pachislot parlours, Tokyo back offices, a brief and restless experiment in video game publishing, and a CEO named Hajime Satomi who never ruled anything out.

• 2. Slot Machines and Early Growth

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  Sammy Industry, as it was originally called, built a factory in Itabashi-ku, Tokyo in 1978 to ride the wave of invader game popularity sweeping Japan at the time. That same year it entered game machine development. By 1981, the company had established a sales and marketing arm called Sammy Sales and Marketing Co., Ltd., based in Osaka City. Pachislot machines became a focus in 1982, when Sammy launched the Empire pachislot machine and began marketing these gambling devices across Japan. The Aladdin single-bonus pachislot machine followed in 1989, the same year the company relocated its headquarters to Sayama City in Saitama Prefecture. Each new machine represented a deeper commitment to the pachislot market that would define Sammy's core identity for decades.

• 3. Video Games and American Ambitions

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  In 1988, an American subsidiary took root in California. It sold video games from other companies in the United States and would eventually release redemption games, some of which originated with Banpresto in Japan. That same year Sammy Industry expanded into video game software sales and marketing back home. By 1990, a dedicated video game division called Japan Soft Technology Co., Ltd. had been established in Nagoya City, followed almost immediately by another gaming subsidiary, Nippon eicom Co., Ltd., in Itabashi-ku, Tokyo. The games that came out of this period included Viewpoint, Survival Arts, and The Rumble Fish. Sammy absorbed Japan Soft Technology back into the parent company in 1992, and by the mid-1990s these video game efforts were winding down. The American subsidiary shifted during this period too, relocating from California to Illinois in 1992.

• 4. Pachinko Machines and LCD Firsts

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  In 1997, Sammy launched Ultra Seven, which the company described as the first pachinko machine to use licensed characters. The pachislot side of the business was also innovating: later that year came Juoh, billed as the first pachislot machine with AT functions. Two years earlier, in 1995, a subsidiary called Techno Sammy Co., Ltd. had been created specifically to handle pachinko sales and marketing, and it launched the CR Gold pachinko machine. Then in 1999 came GeGeGe No Kitaro, described as the first pachislot machine to use an LCD screen. That same year, Sammy registered its stock on the OTC market and entered into a capital participation with Spike Co., Ltd., also creating a joint venture subsidiary called Vaill Co., Ltd. alongside Spike.

• 5. Sammy Entertainment and High Moon Studios

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  In 2001, Sammy listed on the first section of the Tokyo Stock Exchange. Also that year, Sammy hired a former Tradewest executive named John Rowe to launch Sammy Entertainment, a publishing label aimed at the niche American market. That venture went through two name changes before finding its final form: it became Sammy Studios and then High Moon Studios, the studio that still operates today. Sammy also established a European arm, Sammy Europe Limited, in London, and Sammy Entertainment Inc. in Los Angeles. Within the same year, Sammy aided in forming Joyco Systems Corporation, a company focused on developing equipment specifically for pachinko and pachislot machines. The 2D graphics display system Sammy developed in 2002 for its pachinko and pachislot machines showed that hardware innovation and publishing expansion were running in parallel.

• 6. The Sega Acquisition

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  Talks between Sammy and Sega began in 2003. Sega publicly declined the initial approach, stating the two companies lacked synergies. Despite that statement, Sammy purchased a 22.4 per cent stake in Sega from CSK, which had been Sega's one-time parent company. CEO Hajime Satomi said publicly that Sammy might take an additional stake in Sega and would not rule out making Sega a subsidiary. By mid-2004, the acquisition had moved far beyond a minority stake. Sammy bought a controlling share in Sega Corporation for $1.1 billion, and the two entities merged into a new holding company called Sega Sammy Holdings. Both Sega and Sammy became subsidiaries of this holding company, operating independently even as their executive departments merged. Sammy transferred its video game and arcade business to Sega and returned to its focus on pachinko and pachislot machines. The copyright to Sammy's back catalogue of video games now belongs to Sega, a quiet transfer that sealed the terms of that $1.1 billion deal. In 2018, Sammy's offices moved to their current address in Shinagawa, Tokyo.