is a Japanese businessman and was the former President and CEO of Sega Enterprises, Ltd from 1983 to 1999.
Early life and career
Nakayama was born into a family of doctors, and was expected to pursue medicine as a career. However, Nakayama decided to drop out of college and not to pursue medicine further. Through an advertisement in a newspaper, Nakayama found a job as a jukebox leasing salesman for the V&V Hifi Trading Company. He rose to head of a new sales department at V&V, but when the company would not take his advice to begin distributing arcade games, Nakayama left with four of his salesmen to form a company called Esco Trading in 1967. Esco served as a distributor of coin-operated amusements and represented both smaller domestic factories that did not have their own distribution network and foreign manufacturers looking to place their games in Japan. Sega Enterprises, Ltd. was one of its suppliers.
Career with Sega
In 1979, Esco Trading was purchased by Sega, then a subsidiary of Gulf and Western Industries. This brought Nakayama into Sega, where he became vice-president of distribution, and responsible for their Japanese operations. David Rosen, then CEO of Sega, acquired Esco Trading primarily for Nakayama's leadership. In the early 1980s, Sega was a leading arcade game manufacturer in the United States, but due to a downturn in the industry from 1982, Gulf and Western sold their American manufacturing facilities and the rights for its arcade games to Bally Manufacturing, while retaining the Japan-based Sega Enterprises.
Nakayama became president of Sega Enterprises in July 1983, and advocated for Sega to enter the still-growing Japanese home console market. This proposal was accepted, and the SG-1000 was released, selling 160,000 units in 1983, far exceeding the projected 50,000. Shortly after the SG-1000 launch and the death of company founder Charles Bluhdorn, Gulf and Western began to divest its secondary businesses. Nakayama and Rosen arranged for a group of investors to purchase Sega Enterprises in 1984 for $38 million. Nakayama became CEO of Sega Enterprises, and Isao Okawa of CSK Corporation became chairman.
While the company faced steep competition as its Master System competed with the Nintendo Entertainment System, with the arcade game market once again in growth at the end of 1980s, Sega was one of the most recognized game brands. For homes, Sega released the Master System's successor, the Mega Drive, in Japan on October 29, 1988, which remained a distant third in Japan behind Nintendo's Super Famicom and NEC's PC Engine throughout the 16-bit era. For the North American launch, the console, rebranded Genesis, was launched in a limited number of markets on August 14, 1989, and in the rest of North America later that year. The European version of the Mega Drive was released in September 1990. Nakayama tasked Sega of America CEO Michael Katz to sell one million units within the first year, using the rallying cry "Hyakumandai!". Katz and Sega of America managed to sell only 500,000 units. In mid-1990, Nakayama hired Tom Kalinske to replace Katz as CEO of Sega of America. Kalinske developed a four-point plan to boost Genesis sales: cut the price of the console, create a U.S.-based team to develop games targeted at the American market, continue and expand aggressive advertising campaigns, and replace the bundled game Altered Beast with a new game, Sonic the Hedgehog. The Japanese board of directors initially disapproved of the plan, but all four points were approved by Nakayama, who told Kalinske, "I hired you to make the decisions for Europe and the Americas, so go ahead and do it." In large part due to the popularity of Sonic the Hedgehog, the Genesis outsold the SNES in the United States nearly two to one during the 1991 holiday season. This success led to Sega having control of 65% of the 16-bit console market in January 1992. In 1993, Nakayama brought Shoichiro Irimajiri into the company. Irimajiri had previously been an executive at Honda. In 1992, Nakayama was also named chairman of the Japan Amusement Machinery Manufactures Association.
