Yoichi Wada
Nakamura resigned as company president later in the year, being replaced with Kyushiro Takagi. Anxious about the company's continuing financial struggles, Nakamura suggested that Namco begin looking into the possibility of merging with another company. Namco first looked to "Final Fantasy" developer Square and "Dragon Quest" publisher Enix, offering to combine the three companies into one. Yoichi Wada, the president of Square, disliked Namco's financial showing and declined the offer. Square instead agreed to a business alliance with Namco. Following this, Namco then approached Sega, a company struggling to stay afloat after the commercial failure of the Dreamcast. Sega's development teams and extensive catalog of properties caught Namco's interest, and believed a merge could allow the two to increase their competitiveness. Sega was already discussing a merge with pachinko manufacturer Sammy Corporation; executives at Sammy were infuriated at Sega's consideration of Namco's offer. A failed attempt to overturn the merge led Namco to withdraw its offer the same day Sega announced it turned down Sammy's. While Namco stated it was willing to negotiate with Sega on a future deal, Sega turned down the idea.