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Sega threepeat as video game leader for Christmas sales; second annual victory; Sega takes No. 1 position for entire digital interactive entertainment industry.

LAS VEGAS--(BUSINESS WIRE)--Jan. 6, 1995--Strong sales of Genesis 32X, combined with an overall increase in sales of Sega Genesis software, Sega CD hardware and software, and Game Gear hardware and software, made 1994 the third straight year Sega won the holiday season sales battle and the first it has been able to claim leadership of the vast digital interactive entertainment industry.

Based on independent sales figures, Sega captured 55 percent of the overall market in October and 53 percent in November (most recent reporting period), and preliminary indications from retailers point to a widening lead for Sega at the close of the holiday sales season.

For all of 1994, Sega had 58 percent of all 16-bit hardware sales. Sega also beat Nintendo, and Atari, Phillips and 3DO combined, in overall annual video game hardware sales, with 56 percent of the market.

"This is a tremendous win for Sega," said Tom Kalinske, president and chief executive officer, Sega of America. "1994 was a transition year for us, and it's a great coup to introduce our new 32-bit platform successfully, while at the same time sustain our No. 1 position in the video game category and take the lead in the whole industry," Kalinske added.

Sega maintained its leadership position with a comprehensive hardware and software lineup: Game Gear, the best-selling portable system, with 53 percent dollar share; Sega CD, which grew 38 percent over 1993; the 32X add-on for Genesis, with nearly 500,000 units sold between its introduction in late November and Christmas; and Genesis, the overall home video game system leader, with substantial sales of over 4 million units.

"While our industry had sales that took a small slip last year, Sega grew its market share," Kalinske said. "Overall, the video game industry sold nearly 8 million 16-bit systems last year, while sales of the much-heralded home multimedia PC CD-ROM topped out at about 4 million units -- so even with a small dip, the video game industry significantly outweighed the computer industry."

Sega's growing hardware family paid off at the cash register and made the difference in leading the industry.

"In a very competitive year, our product strategy won out with consumers," Kalinske said. Sega of America's parent company, Sega Enterprises Ltd. in Tokyo, recently introduced the next-generation Sega Saturn system in Japan, where it has been outselling Sony's newly introduced PlayStation by a ratio of 5-to-3.

"1995 will be an outstanding year for us as Genesis 32X accelerates in the U.S. market, and as Saturn is introduced here late this year. We're very upbeat about 1995 after such a solid 1994," Kalinske said.

Sega bases its predictions on a combination of TRST data from the independent research company NPD Group which tracks video game sales, its own internal data, and sales and back-orders to date of 32X, the 32-bit add-on which gives Genesis 40 times more power, and strong software sales of hit titles such as "Sonic & Knuckles," "NFL '95," "World Series Baseball," "Ecco: The Tides of Time" and "Tomcat Alley."

Sega of America is the arm of Tokyo-based Sega Enterprises responsible for the development, marketing and distribution of Sega products in the Americas. Sega Enterprises is a nearly $3.5 billion company recognized as a leader in interactive digital entertainment media, with operations on five continents.

CONTACT: Sega of America
 Richard Brudvik-Lindner, 415/802-3658
 or
 Manning, Selvage & Lee, Universal City, Calif.
 Greg Chiemingo, Lee McEnany, 818/509-1840
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Date:Jan 6, 1995
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