A red letter date is fast approaching! 15th July, 1983 basically marks the beginning of the established order of gaming. That was the day that Nintendo released the Family Computer. Soon after, it was the clear market leader in its homeland; every trace of competition that come before, like the Epoch Cassette Vision, was erased. Nintendo was the king of the hill, and it would remain this way for quite some time.
But it was not an out-and-out coronation. Sure, the Family Computer - "Famicom" for short - was popular from the start, but it did face competition from Sega, which also released its own hardware on the exact same day. Sure, we all know the fierce competition between the SNES and Mega Drive (aka Genesis) a few years later - now known as The Console Wars - but that wasn’t the first time that these two companies had battled for dominance of the living room.
Sega started development on a home video game in the early '80s and eventually produced two systems called SG-1000 and SC-3000. The SG-1000 was a standard home console priced on par with the Family Computer at 15,000 Yen ($65 in 1983). It packed a Z80 based processor; a very popular chip which also saw use in the ColecoVision and many home computers as well. It came with one hardwired controller and played game cartridges, but didn’t have many other features. The SC-3000 was essentially the SG-1000 in a computer case for twice the price. It had more RAM and a keyboard, but both machines played the same games. In the early 1980s, it wasn’t clear what kind of machine consumers wanted and so Sega covered both ends of the market.
The SG-1000 and SC-3000 were backed up with a strong marketing campaign. Multiple print and television ads were produced in 1983 and 1984 featuring famous Japanese celebrities. Sega also released 21 games in the first six months. Contrast this with Nintendo, whose television ads were mostly gameplay with an unknown person holding a controller in a first-person view, and released only 9 games in 1983. The launch and honeymoon period for the SG-1000 went well, with 160,000 systems being sold in its first year, way ahead of Sega's original projection of 50,000 units. The fact that Nintendo had to issue a recall on the Famicom due to faulty parts helped, too. However, it was not to last; after Nintendo started to break away with the lead and win over third-party publishers, Sega decided to update its system in the form of the SG-1000 II. The internals were the same, with the main change being a resigned controller that did away with the joystick.
Sega remained competitive, but the gap in sales widened over 1984 and 1985. By the end of 1985 the Family Computer was in 4.5 million homes, while SG-1000 group of systems were in about 2 million. Perhaps the sales numbers led Sega and Nintendo to apply different strategies to their home games business; Sega began releasing more powerful hardware, whereas Nintendo used chip upgrades in cartridges to extract more performance out of the Famicom. It led to Sega releasing five systems in Japan between the years of 1983 and 1988, while Nintendo released only the Disk System add-on and mostly stuck to cartridges.
The Family Computer may have beaten the SG-1000, but it didn't wipe out Sega. When it came to the Master System, Sega was dominant in virtually every market except for Japan and the U.S. The Genesis was extremely popular in the U.S. at the height of the Console Wars. As for Japan, The Saturn became the region’s best-loved Sega machine. All of this came from the early ventures that Sega embarked upon with the SG-1000.