Star Tech Journal

OCTOBER
STAR ...... TECH JOURNAL
1 998
SEGA ENTERPRISES ACQUIRES COIN-OPERATED GAME
SALES DIVISION FROM SEGA GAMEWORKS
Transaction Reflects a Strategic Business Decision by Both Companies
Sega Game Works and Sega
Enterprises, Inc. (U.S.A.) an-
nounced the transfer of Sega
Game Works' coin-operated
Game Sales Division to Sega
Enterprises U.S.A.
Sega Game Works assumed
control of its Game Sales Di-
vision from founding partner
Sega Enterprises Ltd. as part
of that company's investment
package
when
Sega
Game Works was formed in
March, 1996. The Game Sales
Division is a successful busi-
ness with more than 60 dis-
tributors and operators and
annual North American rev-
enues topping $80 million.
Montgomery, president and
CEO of Sega Game Works.
"Sega Enterprises' acquisition
of the Game Sales Division is
a strategic and mutually ben-
eficial arrangement for both
companies," said Al Stone,
president and COO, Sega En-
terprises, U.S.A. "The more
connected the sales function
is with the g~me creation
teams, the stronger we'll be at
hitting the mark with the hot-
test new arcade gaining expe-
riences that go beyond the
consumers' expectations."
Sega Enterprises is a partial
owner of Sega Game Works, a
company that has taken inter-
active game play to a new
level of fun and social inter-
action with its Game Works
flagship entertainment desti-
nations.
The transfer of the Northern
California-based Game Sales
Division to Sega Enterprises
U.S.A. will enable both com-
panies to grow their core busi-
nesses and enjoy a mutually
beneficial synergy between
distributor and operator. The
sale will have no negative im-
pact on Game Sales custom-
ers, operations or employees.
"By selling our Game Sales
Division, we are in a position
to truly focus our energies on
Sega Game Works' core busi-
ness - that of creating and
evolving location-based en-
tertainment where people can
enjoy a social experience
around games," said Michael
"This is a great business op-
portunity for both parties and
we are extremely excited to
grow our U.S. distribution
business. This transaction
provides further reinforce-
ment that our game creation
efforts will result in products
that meet and exceed con-
sumer demand," said Hayao
Nakayama, vice chairman,
Sega Enterprises Ltd. "We re-
main the largest shareholder
in Sega Game Works and the
Game Works entertainment
venues will be an important
customer for our products."
Under the direction of Steven
Spielberg, Game Works was
created as the quintessential
entertainment destination, de-
livering the best social expe-
rience around games. Adults
and families can play and in-
teract in dramatically-themed
neighborhoods that offer a va-
riety of high energy, visually
stimulating and relaxing en-
vironments. Five Game Works
are successfully operating,
with each offering a variety of
games, and full-service restau-
rants and bars, except in Se-
attle, where the Game Works
pub features fresh beer
brewed on site, in addition to
other beer & wine.
The managing members of
Sega Game Works L.L. C. are
wholly-owned subsidiaries of
Sega Enterprises, Dream-
Works SKG and Universal
Studios, Inc. Universal Stu-
dios, Inc. is a unit of the
Seagram Company Ltd., a
global beverage and enter-
tainment company.