Sega brings the Master System to Western living rooms

What happened

On paper the machine matched or beat Nintendo's, with a slightly richer palette and crisp conversions drawn from Sega's own coin-operated catalog. The problem was software supply. Publishers who wanted access to the far larger Nintendo audience were bound by terms that discouraged releasing the same games elsewhere, so the Master System depended almost entirely on its manufacturer's output. American distribution was handed to a toy company with no experience in the category, and the console never established a foothold in the United States.

Elsewhere the story ran differently. Nintendo had little presence in Europe at first, and Sega's machine arrived through local distributors into markets where computers rather than consoles were the incumbent, selling well in Britain, France, Germany and Spain. In Brazil a licensing arrangement with a domestic manufacturer produced locally made hardware and software that stayed on sale for an extraordinarily long time, supported by an audience that remained loyal long after the system vanished everywhere else.

The world at the time

Nintendo's console was rapidly becoming the default in Japan and North America, and its licensing rules gave it enormous leverage over publishers. Western Europe still bought home computers for games, sold through high-street chains, and console makers had to build distribution from nothing in each individual country.

What it changed

European success gave Sega a base and a brand that its next console converted into genuine market share, and the company's frustration with exclusivity terms informed the combative strategy that followed. The Brazilian arrangement became one of the longest-running licensing deals in the industry, keeping the hardware in production for decades.