The Sega Master System (SMS for short), is an 8-bit cartridge-based gaming console that was manufactured by Sega. Its original Japanese incarnation was the SG-1000 Mark III. This console launched SEGA onto the same competitive level as Nintendo, at least in the Japanese market. The Master System was released as a direct competitor to the NES/Famicom. The system ultimately failed to oust its competitor, but has enjoyed over a decade of life in secondary markets, especially Brazil.
The SG-1000 Mark III came after the SG-1000 Mark I and SG-1000 Mark II. It was released in Japan on October 20, 1985. The mascot of the system was Alex Kidd.
The system was redesigned and was sold in the United States under the name Sega Master System in June 1986, one year after the Nintendo Entertainment System was released. The console sold for $200. The Master System was then released in other places, including a second release in Japan in 1987 under its new name.
Though the Master System was more technically advanced in some ways than the NES, it did not attain the same level of popularity among consumers in the United States. Its lack of success in the U.S. has been attributed to various causes, among them the difference in game titles available for each platform and the slightly later release date of the Master System. The licensing agreement that Nintendo had with its third-party game developers may have had an impact as well; the agreement stated, in effect, that developers would exclusively produce games for the NES. The Master System sold 125,000 consoles in the first four months. In the same period, the NES would net 2,000,000.
Nintendo had 90% of the North American market at the time. Hayao Nakayama, then CEO of Sega, decided not to use too much effort to market the console in the NES-dominated market. In 1988, the rights to the Master System in North America were sold to Tonka, but its popularity continued to decline. The move was considered a very bad one, since Tonka had never marketed a video game system and had no idea what to do with it.
In 1990, Sega was having success with its Sega Mega Drive/Sega Genesis and took back the rights from Tonka for the SMS. They designed the Sega Master System II, a newer console which was smaller and sleeker but which, to keep production costs low, lacked the reset button and card slot of the original. Sega did everything in its power to market the system, but nothing came out of it.
By 1992, the Master System's sales were virtually nonexistent in North America and production ceased. Sales were poor in Japan as well, due to the dominance of the main competitor from Nintendo, the Nintendo Family Computer.
In Europe, Sega marketed the Master System in many countries, including several in which Nintendo did not sell its consoles. It had some success in Germany, where it was distributed by "ariolasoft" since Winter 1987. The Europeans had garnered lots of third party support for the SMS and as a result, it was able to outsell the NES in Europe. Nintendo was forced to get licensing for some popular SMS titles in that market. The Master System was supported until 1996 in Europe. It was discontinued so that Sega could concentrate on the new Sega Saturn console. Sales of the SMS in Australia were not as strong as the NES enjoyed there, however the SMS was able to gain greater market share than it had in North America.
