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In the meantime, Gulf & Western is beginning to cede its non-strategic activities following the death of its founder Charles Bluhdorn7, as well as Nakayama and former CEO of Sega David Rosen, are organising a takeover of the management of the Japanese subsidiary in 1984 with the Financial support from CSK Corporation, a leading Japanese software company. This first essay is not successful and the console is quickly replaced by the Sega Mark III in both ans. Nakayama received permission to work on this project, leading to the release, in July 1983, of Sega's first video game console, SG-1000. Nakayama advocates that the company takes advantage of its material experience acquired by years of work in the arcade industry to enter the market of salon consoles in Japan, an area that is then in its infancy.

With its declining arcade activity, Gulf & Western executives are turning to the president of Sega of Japan, Hayao Nakayama, for advice on how to Procéder. The company retains the management of Sega's North American Research and Development department, as well as its Japanese subsidiary, Sega of Japan. A slowdown in the arcade from 1982 weakened the company seriously, and led Gulf & Western to sell its North American structure of arcade manufacturing and licensing rights for its arcade games at Bally Manufacturing. In the early years of 1980, Sega Enterprises, Inc., a subsidiary of Gulf & Western Industries, is one of the five largest manufacturers of arcade games operating in the United States, the company's revenues amount to 214 million million to this époque.

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