Alternate History: Chinese SEGA

- Yes I have yet again returned, this time for a more serious Alternate History. This time, what if SEGA....was a Chinese company instead of a Japanese one? -
- Note for this timeline to work, China is not a communist nation, so the first section of this timeline is a summary of that. Just skip it if you don't care and want to get to Chinese AU SEGA. - 
- This is largely an exercise in Alternate History and in writing - 
== The Greater Scope ==
Point of Divergence: 1934-1935. A traitor within the ranks of the CCP divulges information on the CCP's movements to the KMT. This allows Chiang Kai-Shek's forces to intercept the CCP during the Long March and decimate their forces. By 1936-1937, the KMT had successfully won the Chinese Civil War, just in time to deal with the Japanese invasion. 
This results in a China ruled by the KMT Post-WWII.
Former Countries and Disputed Territories (In Scenario 1 - This may or may not change):
* Tibet: Annexed by the ROC in the 1950's. The Dalai Llama retains autonomous ruler-ship within the country, though it is largely nominal. 
* Xinjiang/East Turkestan: The ROC claims East Turkestan as part of it's territory, East Turkestan aims reunification with the rest of Xinjiang. East Turkestan, a state created and supported by the Soviet Union during the Cold War, is a member of the Central Asian Union, Economic Cooperation Organization, Economic Cooperation Organization Trade Agreement and Commonwealth of Independent States though receives little to no recognition beyond it's fellow member states. Chinese-controlled Xinjiang is increasingly Han Chinese.
* Manchuria: From 1946 to 1993 - 1995, Manchuria was a separate country known as the Socialist People's Republic of Manchuria from 1946 to 1993, and then the Republic of Manchuria from 1993 to 1995. Following a regime that proved far worse the Kuomintang at even their worst, the Manchurian people voted to peacefully reunite with China following the final collapse of the Manchurian government.
** In Scenario 2, Manchuria is maintained as an independent, yet fragile, nation. Either a monarchy under a restored Qing, or a Republic. 
== SEGA ==
The SEGA Corporation  is a Chinese multinational conglomerate headquartered at the Sega Tower in Shanghai, China. 
Founded by Martin Bromley and Richard Stewart in 1940 as Service Games supplied coin-operated machines to U.S. military bases before expanding into other countries -- initially Japan, though soon afterwards throughout Asia. Following an investigation into criminal business activities in the early 1960’s, Service Games of Japan was dissolved though soon after replaced by two new companies established by Bromley, which eventually merged with Rosen enterprises to form Sega Enterprises in 1965. Sega’s’ Chinese assets and operations became independent of the corporation as a whole and established the corporation of ZYG (Zhōngguó Yúlè Gōngsī) via a management buyout of Sega's Chinese assets while in charge of the company. 
In 1984, ZYG bought Sega Enterprises and all of it’s assets from Gulf and Western and established the modern conglomerate of The SEGA Corporation.
The SEGA Corporation is one of China’s largest private corporations, with over 100 thousand more employees than America’s own Walt Disney Company. It is considered an industry leader in China’s consumer electronics market, and also operates Casinos, Resorts and Amusement Parks throughout China as well as SegaWorld arcades in both China and Japan (with some former operations in Australia and the United Kingdom). SEGA also owns and operates cable & satellite television networks as well as online streaming services, predominantly in China, Russia and surrounding countries. In the late 1990’s they expanded into acquiring several film and animation studios, all based in China, adding that to their catalogue as well. SEGA’s most profitable business is the development, publishing and distribution of video games, arcade games/cabinets and video game consoles, which they have been partaking in since the 1980’s.
=== 1940 - 1982: Origins ===
Sega was initially founded in 1940 as Standard Games by Martin Bromley, Irving Bromberg and James Humbert. Based in Honolulu, Hawaii, they supplied military bases with coin-operated amusement machines. In 1951, following the U.S. banning of slot machines within their territory Bromley sent two of his employees -- Richard Stewart and Ray LeMaire -- to establish operations in bases located within Japan. By the following year, all five established Service Games Panama to control worldwide distribution. Over the course of the next seven years they also expanded in The Philippines, Korea, Vietnam and China.
Service Games of Japan was dissolved in May 1960 due to investigations into criminal business practices, causing Service Games of China to begin servicing as the predominant asian branch of the brand, finding massive success by expanding from military business and beginning to produce games & machines for casinos such as in Macau. In Japan however, Bromley established two handle the assets of what had been lost, Nihon Goraku Bussan and Nihon Kikai Seizō.The two new companies purchased all of Service Games of Japan's assets. Kikai Seizō, doing business as Sega, Inc., focused on manufacturing slot machines. Goraku Bussan, doing business under Stewart as Utamatic, Inc., served as a distributor and operator of coin-operated machines, particularly jukeboxes. The companies merged in 1964, retaining the Nihon Goraku Bussan name
Bromley established two companies to take over its business activities, Nihon Goraku Bussan and Nihon Kikai Seizō. The two new companies purchased all of Service Games of Japan's assets. Kikai Seizō, doing business as Sega, Inc., focused on manufacturing slot machines. Goraku Bussan, doing business under Stewart as Utamatic, Inc., served as a distributor and operator of coin-operated machines, particularly jukeboxes. The companies merged in 1964, retaining the Nihon Goraku Bussan name.
David Rosen, an American officer in the United States Air Force stationed in Japan, launched a photo booth business in Tokyo in 1954.This company became Rosen Enterprises, and in 1957 began importing coin-operated games into Japan. In 1965, Nihon Goraku Bussan acquired Rosen Enterprises to form Sega Enterprises, Ltd. Rosen was installed as the CEO and managing director, while Stewart was named president and LeMaire was the director of planning. Shortly afterward, Sega stopped leasing to military bases and moved its focus from slot machines to coin-operated amusement machines. Its imports included Rock-Ola jukeboxes, pinball games by Williams, and gun games by Midway Manufacturing.
In 1969, Dai Luoyang, President of Sega's Chinese subsidiary, bought out his end up of the company in a management buyout and founded his independent corporation out of the situation - Zhōngguó Yúlè Gōngsī (Abbreviated as ‘ZYG’). While still focusing on the original business ZYG would under the leadership of Chinese businessman Dai Luoyang expand into becoming a massive consumer electronics company throughout China, competing with the likes of Panda Electronics, in addition to opening their own Resort Casinos in cities where doing so remained legal. Later in the same year, Sega was bought out by American conglomerate Gulf and Western Industries, though Rosen remained the CEO.  In 1974, Gulf and Western made Sega Enterprises, Ltd. a subsidiary of an American company renamed Sega Enterprises, Inc. Sega released Pong-Tron, its first video-based game, in 1973. Despite late competition from Taito's hit arcade game Space Invaders in 1978, Sega prospered from the arcade game boom of the late 1970s, with revenues climbing to over US$100 million by 1979. During this period, Sega acquired Gremlin Industries, which manufactured microprocessor-based arcade games, and Esco Boueki, a coin-op distributor founded and owned by Hayao Nakayama. Nakayama was placed in charge of Sega's Japanese operations. In the early 1980s, Sega was one of the top five arcade game manufacturers active in the United States, as company revenues rose to $214 million. 1979 saw the release of Head On, which introduced the "eat the dots" gameplay Namco later used in Pac-Man. In 1981, Sega licensed and released Frogger, its most successful game until then. In 1982, Sega introduced the first game with isometric graphics, Zaxxon. Despite the break in the company, Sega established partnerships with ‘ZYG’ in order to distribute their products & games within China.
=== 1982 - 1989: Entry into Video Game Market | Rise in China ===
Following a downturn in the arcade business starting in 1982, Gulf and Western sold its North American arcade game manufacturing organization and the licensing rights for its arcade games to Bally Manufacturing. Gulf and Western retained Sega's North American R&D operation and its Japanese subsidiary, Sega Enterprises, Ltd. With its arcade business in decline, Sega Enterprises, Ltd. president Nakayama advocated for the company to use its hardware expertise to move into the home consumer market in Japan. This led to Sega's development of a computer, the SC-3000. Learning that Nintendo was developing a games-only console, the Famicom, Sega developed its first home video game system, the SG-1000, alongside the SC-3000. Rebranded versions of the SG-1000 were released in several other markets worldwide. 
Due in part to the SG-1000's steadier stream of releases, coupled with a recall on Famicom units by Nintendo, the SG-1000 sold 360,000 units in 1983, which far exceeded Sega's projection of 50,000 in the first year. The majority of these sales came from China.
However, by 1984 the Famicom began to outpace the SG-1000. This was in part because Nintendo expanded its game library by courting third-party developers, whereas Sega was hesitant to collaborate with companies with which they were competing in the arcades.
Shortly after the launch of the SG-1000, and the death of company founder Charles Bludhorn, Gulf and Western began to sell off its secondary businesses. Catching wind of this, Dai Luoyang met with Gulf and Western as well as Sega executives in order to discuss a purchase by ZYG of Sega's Japanese subsidiary in addition to all of it's assets. ZYG purchased Sega for approximately $38 million. Rosen and Nakayama were kept in the company's leadership in America and Japan respectively.
Sega of China became the company's dominant division in overseeing all of it's international products in addition to those within China, while Sega of Japan maintained the company's presence and operations within Japan. Sega Europe, the company's European division, was established in 1984. At the end of Sega's deal with Bally, Sega Corporation of America was established in 1985, becoming simply Sega of America in 1986. The release of Hang-On in 1985 proved successful in North America, causing Sega to struggle with the demand for the game. The introduction of UFO Catcher in 1985 also caught on, to a point that it still remains Japan's most commonly installed claw game.
In 1985, Sega began working on the Mark III, a redesigned SG-1000. For North America, Sega rebranded the Mark III as the Master System, with a futuristic design intended to appeal to Western tastes. In China, the system was branded as the Haowan.The system was released in Japan in 1985, though was unsuccessful at launch despite it's superior hardware. As Nintendo required third-party developers not to publish their Famicom games on other consoles, Sega developed its own games and obtained the 
rights to port games from other developers. Sales of the Master System in the United States were handicapped by ineffective marketing by Tonka, an American toy company who marketed the console there on Sega's behalf.
The Haowan was released in China in December - January 1986 during the Chinese New Year celebrations, with the Master System being released in September of 1986 and in Europe in 1987, Brazil in 1989.
However, the Master System/Mark III/Haowan was successful in three key markets - Europe, Brazil and China. In China, the system reached a popularity on par with the NES/Famicom in Japan and North America - selling a comparable number of units as well. This was because, as a Chinese corporation, Sega was not subject to import tariffs and taxes that foreign companies were exposed to, allowing the Haowan to be far more affordable to the Chinese public than it's competitors. Sega of China under Luoyang also seemingly either ignored or outright abused China's poor intellectual property system, creating a massive amount of software clones of Famicom games for the system. Nintendo meanwhile found itself in various legal battles against various distributors of what it considered to be copyright infringement. and hurtful to it's business. Nintendo attempted to take legal action against Sega of China, though due to the aforementioned property system they were largely unable to. 
Sega of China also employed aggressive marketing in China against their competitors such as Nintendo.
The Master System also proved to be successful in Europe and Brazil. Despite it's later release, it garnered a lifespan in Brazil that ultimately outlasted it's lifespan in all other regions - even in modern day the Master System is still sold under third party distributors and has garnered about 8 million units. Due to this the Master System is technically the longest-lived console in gaming history thus far.
Out Run, released in 1986, became Sega's highest selling arcade cabinet of the 1980's, and alongside Hang-On has been attributed as a potential cause for the 1982 downturn being lifted as well as the creation of new video game genres.
In 1987, Sega of China released the Haowan Chibi (or Haowan Mini), which came with a variation of built-in games and served as a budget product marketed to China's poorer families. This product boosted Haowan popularity throughout China and helped Sega compete with the rise of Nintendo console clones.
==== 1985 - 1994: Chinese Home Computer Lines ====
Concurrently with Sega's rise in the Home console industry, Luoyang also reopened Sega's interests in the manufacturing of Home Computers. Moving the manufacturing of these computers to offices in Shanghai, Sega of China introduced in 1986 the SC-4000, the successor to the SC-3000. It received an even more limited release than it's predecessor, being only released within China. However, it was a commercial success within the country. The computer was effectively a computer version of the Haowan with a level of technical improvements and some exclusive content due to said improvements. 
Later releases of the SC-4000 series include the SC-4500 and SC-4600 released in 1987, and the SC-4700 released in 1989. All were only ever released in China, despite their commercial success within the nation they were never released in other countries.
Modified computers of the 'Sega Computer'/'SC' line were installed at Sega-owned casinos in China and Sega-owned arcades internationally, having been redesigned and outfitted with altered hardware for said use and operations by employees at said establishments. 
In the 1990's, computers with enhancements based on Mega Drive technology were also released as upgrades of the 1980's models. The 16-bit SC-5000 was released in 1991, and was followed by the 32-bit SC-5500 in 1994. The latter was Sega's final home computer, due to the market for home computers declining in favor of personal computers. To release future games and services on computers Sega launched the 'Sega PC' line in 1995 and partnered with Chinese & American personal computer providers (i.e. Microsoft and Chinese corporation Kejida) for distribution. 
==== 1985 - 1994: Expansion into Chinese Entertainment Industry ====
In the 1980's, Dai Luoyang aimed to expand his corporate reach outside of technology and into the massive market of entertainment. Wanting a stronger hold on it than he had already, he negotiated with two major studio; The Wan Brothers' studio and Greater Shanghai Film Studios. In 1985, the negotiations resulted in an over $4 billion purchase of all the studios and their properties, in addition to the official employment of the Wan Brothers and many others under The Sega Corporation. Luoyang also purchased and merged together two smaller animation studios which had recently been established in Shanghai, for $5 million each. The Yellow River Productions studio and Long-Tang Animations. Luoyang then had all of the purchases merged into a division promptly dubbed Sega Film & Animation, which was on it's birth and still is one of China's largest film & animation studios. 
During the 1980's, Sega Film & Animation's major productions were inspired by the successes of Disney in America; feature films based on folklore. In Sega's case, their animated films were largely based on Chinese mythology and folk stories, occasionally drifting into the territory of other Asian countries as well as even Ancient Egyptian & Arabic tales. Sega's live-action films and television were largely varied. 
Sega's first major animated film was a 1986 adaptation of Journey to the West, which became China's highest grossing animated film for that year. It was distributed to Western Audiences for the first time in 1987 by Miramax, who partnered with Sega. This partnership allowed Miramax to become the first major distributor of Chinese animation outside of China itself, and began a competition of sorts between the Donghua and Anime industries. 
Sega's film studio remained a rising star within China throughout the 1980's and 1990's, earning for itself the western nickname of "Eastern Disney" due to it's replication of Disney's own success in America. 
Animated films released by Sega Film & Animation during this time period include (more comprehensive lists will be added later and on different sections): 
* Journey to the West (1986) 
* Ye Xian (1987) 
* The Water Mother (1987) 
* The Doomed Prince (1988) 
* Tale of Two Brothers (1989) 
* Ali Baba & The Forty Thieves (1989) 
* King of the Ants (1989) 
* Yang Gu Fe (1990) 
* Alaadin (1991) 
* The Fox, the Tiger and the Raven (1992) 
* The Mermaid & The Boy (1992) 
* The Canary Prince (1993) 
* The Eight Immortals (1994) 
* Mulan (1995) 
The 1991 Alaadin and 1995 Mulan films created by Sega would become the center for two major lawsuits struck against the Walt Disney Corporation based in North America, in 1992 and 1998 respectively. In 1992, Sega filed a lawsuit against Disney for alleged copyright infringement committed by the creation of Disney's Alaadin, and claimed that it had the rights to the intellectual property of "Alaadin" rather than Disney. The case was ultimately dismissed with no settlement from either corporation due to their shared inability to copyright the material of the 1,0001 Arabian Nights - their shared source material. This did however cause a falling out between Sega and Disney, as when Disney purchased Miramax in 1993 Sega cut all ties with the latter, and instead struck a distribution deal with Time Warner instead - resulting in all further distribution of Sega-related animation Post-1993 to be done under the Warner Bros. label.
This cut off Miramax from distributing major Chinese animation & films due to Sega being the only true supplier of top-selling material, and instead sent that designation to Warner Bros/Time Warner, granting the latter significant profits as a result.
1993 also saw the entrance of Sega into the television world, with the Chinese launch of Sega-TV, a Sega-based cable channel that provided various televised content. It would be followed in the later 1990's by multiple sister channels to supply more child friendly & adult friendly content alike. The channel also became available outside of China by the later 1990's as well, though was not available in America until the 2000's - in which it takes the form only of two Chinese-language channels of animation and live action content, respectively.
From 1992 to 1994, Sega also produced an impressively large series of animated shorts featuring their mascot Sonic the Hedgehog,, with gradual & recurring appearances from the other characters such as Eggman, Tails, Metal Sonic, Amy and eventually even Knuckles. These shorts would often be featured at the sort of certain major animated features in theatres, and would also air on animation-centric television channels throughout China. They were never released outside of China due to other animated Sonic media existing in such regions.
=== 1989 - 1994: The Mega Drive, Corporate Expansion, Mainstream Success ===
By the end of the 1980's, with the rise of a mainstream Arcade market in China pioneered by Sega and the resurgence of Arcades elsewhere, Sega emerged as one of the most recognizable names in gaming and it's leader Dai Luoyang as a major job creator and economy booster in China as a whole. Despite the company's widespread success in China - where it was not subject to the same legal restrictions as it's competition, the company's products struggled to find the same success in other regions of the world such as North America and Japan.
In October of 1988, Sega released the Mega Drive in China, though the Japanese launch a week later was overshadowed by Nintendo's release of Super Mario Bros 3. While Chinese sales were yet again largely a success, Nintendo was beginning to catch up to Sega - and both Nintendo and NEC continued to leave the Mega Drive lagging in Japanese sales. In North America, where the console was rebranded as the Genesis, Sega had no sales and marketing organization. When Atari declined to market the console in the region, Sega launched it under their own Sega of America division instead on August of 1989. The Mega Drive would be released in Europe in 1990. Sega of America's CEO at the time, Michael Katz, developed a two-part strategy to build sales in North America. The first part involved a marketing campaign to challenge Nintendo and emphasize the more arcade-like experience available on the Genesis, with slogans including "Genesis does what Nintendon't". Since Nintendo owned the console rights to most arcade games of the time, the second part involved creating a library of recognizable games 
which used the names and likenesses of celebrities and athletes, such as Michael Jackson's Moonwalker and Joe Montana Football. Nonetheless, Sega had difficulty overcoming Nintendo's ubiquity in homes. Despite being tasked by Luoyang to sell one million units in the first year, Katz and Sega of America sold only 500,000. Katz was ultimately replaced in mid-1990 by Tom Kalinske, who knew little of the video game industry though surrounded himself with industry-savvy advisors.
During the 1980's, Sega had a lack of a predominant mascot. In Japan, Alex Kidd served as Sega's mascot - though the character did not catch on with the public nor impact Sega's lagging Japanese sales. Alex Kidd was also marketed as the mascot in Europe. In China, Sega had created a mascot separate from other regions of the world -"Shijia long", literally "Sega Dragon". The character was an azure blue dragon, borrowed from ZYG. The character often blended in with other dragons of Chinese symbolism and was only ever used for marketing and advertising, never having his own video games. Believing that the creation of a definitive mascot would help bolster Sega's sales against Nintendo, Luoyang had all divisions of Sega work on the creation of a mascot character.
Sega Game Gear in 1990, which was their competitor to the Nintendo Gameboy. Despite Sega's best efforts, it was still outsold by the Gameboy in the vast majority of world markets - even in markets where Sega outsold Nintendo in home console sales - and only gained traction in China where the handheld market was saturated by various legally dubious Gameboy clones competing against the actual official system which itself was often more expensive than the clones.
Sega of China proposed a monkey character. Sega of Japan proposed a Hedgehog character named "Mr. Needlemouse". Sega of America proposed a human character largely influenced by Mega-man and Astroboy, and Sega of Europe proposed a tiger or lion. Luoyang ultimately decided the Hedgehog held the most potential. Renamed "Sonic the Hedgehog", the character went on to become Sega's international mascot and one of their most successful video game franchises. The monkey character would still be used in his own series however.
The groundwork for the first Sonic the Hedgehog game was based on a tech demo developed by Sega of Japan developer Yuji Naka; a platform game involving a fast moving character rolling in a ball through a winding tube. With the character design being finalized, this was far more fleshed out. Matching Sega's logo was Sonic's blue color, along with a "can-do" attitude inspired by Bill Clinton and shoes inspired by that of Michael Jackson.
In China, Sonic the Hedgehog's 1991 release gave the Mega Drive a boost of momentum that allowed it to overcome Nintendo's surge and arguably solidified Sega's control over China's gaming market. In America, Kalinske's decision to replace the bundled game Altered Beast with Sonic the Hedgehog. Luoyang largely allowed Kalinske to make his own decisions when it came to America, and was greatly pleased when the Genesis began to outsell the Super Nintendo Entertainment System. Coupled with the continued success in China, Nintendo was dislodged from it's position as the console leader by Sega. While Luoyang was pleased and content with Kalinske's performance in America, he was increasingly less pleased with Nakayama and Sega of Japan's performance - sales in Japan continued to lag significantly behind Nintendo even with the introduction of Sonic the Hedgehog.
With success in the market achieved, and due to mounting legal trouble due to Nintendo's Chinese division, Sega of China began to impose stricter quality control on third party developers that hoped to mitigate the problem of software clones on the Mega Drive compared to that of the Haowan - where it was virtually an epidemic. In practice however, many games were simply turned into unlicensed games, and more unofficial consoles were released.
In 1992, Sega's development teams were divided for the second major Sonic the Hedgehog title; development on Sonic the Hedgehog 2 was done with involvement from both Japanese and American teams and took place primarily within America, while development on Sonic the Hedgehog CD involved both Japanese and Chinese teams and took place primarily within Chinese offices - the first Sonic title to be developed in China. Sonic the Hedgehog 2 would be finished by the end of 1992 and introduce Miles "Tails" Prower; Sonic the Hedgehog CD would be released for the Mega Drive's Mega CD Add-on in 1993. CD was also released as Sonic the Hedgehog PC for the SC-5000 and SC-5500 in China.
While Sonic the Hedgehog did not give Sega any boost in Japan's market, where Sega of Japan continued to lag behind Nintendo, it did make waves for the company in China as well as Europe and Brazil. In North America, under Kalinske's leadership, Sonic also rose in popularity and increased Genesis sales as well and was key in outpacing Nintendo & Super Mario Bros. at the time.
The success of Sonic did reach entertainment outside of video games; in China, Sega of China had created a donghua series featuring their mascot which started airing in late 1993 - in addition to Sonic appearing in other Sega-themed programs post-inception. At the same time, Sega of America worked with DiC Entertainment for the creation of two concurrently airing Sonic-based series, alongside partnerships with Archie Comics (USA) and Fleetway (UK) for Sonic themed comics. Sonic also saw books, manga and manhua released though these were not as popular.
The third major Sonic the Hedgehog title - Sonic the Hedgehog 3, was released in early 1994 while it's expansion Sonic & Knuckles would see release in October of 1994. Following that game's development, STI was left to work on Sonic X-Treme, while STIS worked on a separate Sonic project and the Japanese developers were also similarly left to their own devices. 
Sega also faced competition from both Atari - with the Jaguar, and 3DO - with the 3DO Interactive Multiplayer. Sega's response to the Jaguar and 3DO was the release of the Sega 32X add-on, released only in America and Japan. In China, the 32X was never released. The 32X was seen as a commercial failure.
Sega of China also faced legal disputes with Nintendo of China due to the epidemic of pirated software & hardware released on the Mega Drive, with Nintendo alleging that Sega was yet again allowing unlawful software to be released onto the Mega Drive. Sega denied the claims and denied knowledge of such games. Ultimately, Nintendo lost the dispute due to an inability to prove Sega had any prior knowledge of copyright infringement. Pirated Games and Pirated Console clones plagued Nintendo and other foreign companies in China, while Sega did not suffer the same fate due to being based in China. 3DO did not face this either however, having partnered with Sega's own competitor in consumer electronics, Panda Electronics, for the manufacturing & distributing of 3DO models in China - in addition to other partnerships with Panasonic, GoldStar and Sanyo.  While the 3DO was still expensive and faced piracy with it's software, it did not face any serious clones of it's hardware and as a result was able to compete in China.
During the early 1990's, Sega was outpacing Nintendo on a worldwide scale merely by outselling them in both games and consoles in China. Even while Nintendo retained it's control over Japan's markets and kept America competitive, Sega's dominance in China as well as Europe and Brazil gave them a technical victory in the overall world stage.
=== 1994 - 1998: Partnership & Betrayal of Sony; The Saturn; Rise of the Modern Market ===
It was also during 1992 - 1993 that deals between Nintendo and Sony as well as Sega and Sony took place. Nintendo and Sony fell into a dispute over disagreements regarding the licensing of games on the proposed PlayStation/SNES-CD, and after Nintendo turned to Phillips it was Sega that Sony went to instead: with Sega of America having working relations with them. When Kalinske arrived in Shanghai and informed Dai Luoyang of this decision, Luoyang reluctantly agreed to see where the partnership would go. In early 1993, it was solidified and announced at CES that same year - much to Nintendo's shock.
However, in the end the partnership fell apart by early - mid 1994. Luoyang cancelled the partnership, before revealing he had effectively stolen all of the hardware specifications for what Sony had for the PlayStation - even having it liscensed in Sega's name within China, via making minor technical & naming alterations. Outraged, Sony attempted to reclaim it's stolen technology but was legally unable to do so due to the Chinese legal system, forcing them to make alterations to their solo-created PlayStation in addition to thus having to delay the system's planned release.
The Sega Saturn released in China on November of 1994, followed by a launch in Japan the following week. The Sony PlayStation, due to Luoyang's betrayal, had been delayed for it's Japanese launch until January of 1995 with it's Chinese launch coinciding with it's American launch in September of 1995. This allowed the Saturn to be China and Japan's highest selling console during the 1994 holiday season, though the release of the PlayStation eventually caught up to it in Japan; Sony was unable to succeed in China.
During 1994 and 1995, the Sega Saturn and Sony PlayStation were competing heavily with each-other, with the Sony PlayStation in the end managing to outpace the Saturn in Japan. However, as said before Sony was unable to outpace Sega in China itself, though it did gain more market share in China than 3DO and Nintendo.
The advancements of gaming technology and increased copy protection measures made direct hardware clones increasingly difficult, meaning that the 1996 Nintendo 64 did not have as many direct copies of it as the predecessors did - however the large loss in third party support and the horrible press for the Virtual Boy weakened the 64's capabilities. In Japan, it was beaten by Sega for the first time in Nintendo's history and in China it fell behind 3DO in sales. It was however able to gain high popularity in North America. 
Sega and Nintendo also made gaming history in June of 1996, when both of their systems sported 3D renditions of their characters: Super Mario 64 and Sonic Saturn, namely. In America, Sonic X-Treme was released though did not sell as much as Sega had projected it to, and did not receive the critical acclaim that it's competitor did. Sonic Saturn however, was massive success in China and plans to make it exclusive were were quickly scrapped - however it's release to Japanese markets was met with lukewarm reception - it's American and European launch in 1997 did increase sales, though did not have the impact Sega had been counting on.
The Saturn actually was a commercial success, though it helped highlight to the gaming world the illusion of Sega's power. In China, it sold about as much as the PlayStation did worldwide. Internationally though, it was either a commercial failure or a 2nd place success. This failure largely came down to marketing, third party support, and software. Due to legal issues, not every Chinese Saturn game could be ported overseas, and Sega of China was selective about which ones were - often due to concerns over the legal troubles. Sega of Japan was similarly "stingy" about it's own games, though for more benign reasons. In addition, Sony had managed to snipe many third party developers from Sega, which robbed the Saturn of potential software. Albeit, most of the Chinese third party developers remained with Sega. Nintendo's decision to remain with cartridges also drove more to Sony.
In other markets, Sega largely continued moving along as usual in China, though also began expanding their reach. They continued to largely dominate China's film and television industries, with competition not being as aggressive on that front. They also began to renovate many of their Resort-Casinos throughout China to include arcades, in addition to officially opening the Joypolis Arcade-Department Store-Theme Park brand in 1995, with locations in Shanghai and Yokohama. Joypolis would take the form of both a stand-alone Aracade/Park and also an addition to Sega-owned Resort-Casinos, with locations being opened across China and Japan. 
In Australia and the United Kingdom, a similar enterprise known as Sega World was opened. However, both of these locations would ultimately be commercial failures and cease operating by the end of the 1990's.
== 1998 - 2001: Dreamcast, reclaiming international awareness, increased competition ==
== 2001 - 2006: Lingxin's Leadership; Financial Decline ==
== 2006 - Present: Current Leadership; Growing Success & Company Expansions ==
== Console Sales ==
SG-1000 (Mark I) 
* Japan - 160,000 
SG-1000 II (Mark II)
* Japan - 160,000 
* China - 260,000 
Master System
* North America - 2 million
* Japan - 1 million 
* China - 35.2 million
* Brazil - 8 million 
* Europe - 6.8 million 
Haowan Chibi
* China - 30 million
Mega Drive
* China - 61.91 million 
* North America - 22.1 million 
* Europe - 9.6 million 
* Brazil - 3 million 
* Japan - 3.5 million
== Sega (1984 - Onwards) Leadership ==
SEGA OF CHINA (Headquarters: Shanghai, China)
* Dai Luoyang (b. 1917, d. 2001)
** Chairman: 1984 - 2001 
** CEO: 1984 - 2001 
* Dai Lingxin (b. 1919, d. 2007)
** President: 1984 - 2001
** CEO: 2001 - 2006
** Chairman: 2001 - 2006
* Dai Wuying (b. 1946, d. 2020)
** President: 2001 - 2020
** CEO: 2006 - 2020
* Qian Jingyi (b. 1948)
** Chairman: 2006 - 2020
* Dai Xiulan (b. 1977)
** President: 2020 - Present
** CEO: 2020 - Present
* Dai Guanting (b. 1962)
** Chairman: 2020 - Present
SEGA OF AMERICA (Headquarters: San Fransisco, CA, USA)
SEGA OF JAPAN (Headquarters: Tokyo, Japan)
SEGA EUROPE (Headquarters: London, United Kingdom)
SEGA FILM & ANIMATION (Headquarters: Shanghai, China)
SEGA MUSIC GROUP (Headquarters: Shanghai, China)
SEGA PUBLICATIONS (Headquarters: Shanghai, China)
SEGA PARKS & EXPERIENCES (Headquarters: Shanghai, China)
SEGA CASINOS (Headquarters: Macau)
== Sega Properties ==
* Sonic the Hedgehog
* Yakuza
* Triad
* Shenmue
* Dragonborn
* Alex Kidd
* Space Channel 5
* Puyo Puyo Pop
* Chu Chu Rocket
* Altered Beast
* Shinobi
* Phantasy Star
* Skies of Arcadia
More to be added...
== CHINA ==
China in this timeline is essentially a non-communist democratic nation. It's details are in the info box to the side, as it is not really related to SEGA or Sonic at all, though is important to this timeline as it's the only way this scenario is remotely possible. 
In this timeline, Chinese Manhua & Donghua would likely compete heavily in Western Markets against the Japanese Manga & Anime industries - and whereas the likes of Toei & Viz media dominate Anime/Manga, Sega would dominate Manhua & Donghua distribution in the west and thus be major Anime/Manga distributor's primary competition besides other Anime/Manga companies. Sega also would compete with Japanese companies in Japan itself, as obviously they would want to market their properties there as well.
China as a market in general would be both easy and difficult to find success in - as in this timeline, the Chinese themselves would be producing & selling content just as the westerners are; sooner or later, there would be the development of mighty Chinese industries that in individual size would likely eclipse that of their American counterparts. Chinese entertainment would be a completely different world compared to western or even Japanese entertainment, similar in some ways though different in others. While obviously there would be distribution to the west, it wouldn't be entirely necessary due to the sheer size of the Chinese markets alone (especially as the populations become more urbanized). However, distributing to the west would still be vastly beneficial of course.
For example, Sega in this timeline still fails with the Saturn in the west - though stays alive in gaming due to the power they have over the market share in China, allowing them to survive failing in other regions of the world. Thus, as a rival Sega is a fearsome beast for any gaming company - as none of their rivals were able to outmatch them in China, they were unable to truly weaken Sega's ability to just keep releasing consoles.
Unlike in our timeline, China would not necessarily be a sinister force - they would be akin to an oversized Taiwan that has no reliance on the United States in modern day. They would be rivals to the United States, and could very well eclipse it economically, but the rivalry would be more cultural & "friendly"/"civil" than anything else - unless of course the USA falls to socialism or something like that. Which is assumed to NOT have happened in this timeline. At least, not yet anyway.
It is possible that Sega's success in this timeline would be somewhat impeded by nationalism and/or patriotism against China in countries they try to market in (such as Japan). 
With Chinese communism being defeated, it is possible that the surviving descendants of the Qing Dynasty actually do still live in China as non-communist citizens that are wealthy and respected, though politically powerless - akin to the prior nobility of other countries that no longer have monarchies. It is doubtful though possible that they would still live in the Forbidden Palace, though it is likely that with the capital at Nanjing the city/palace is largely a museum and the Qing dynasty members live primarily in wealthy estates in post-communist Manchuria or other parts of China.
The early years of the ROC would be largely dominated by the KMT Party, though by the late 80's and early 90's following Chiang Kai-Shek's death and the growing desire for reform, it is inevitable that some form of democratic reform would come to China. This is reflected in my decision to change the flag away from the traditional ROC/Taiwan/KMT flag and instead made my own flag unique in design from that (though I had multiple ideas besides that one).
== Trivia ==
* The Sega Corporation's Chinese division, Sega of China, which serves the primary corporate division and thus the head of the company, is known and meme'd for it's near absurd level of nepotism when it comes to it's leadership; nearly all of it's executive board are either related to or descended from Dai Luoyang in some way, shape or form:
** Dai Luoyang was considered the original patriarch of the family.
** Dai Lingxin was the younger brother of Luoyang.
** Dai Wuying is Luoyang's oldest son.
** Qian Jingyi was Lingxin's son-in-law, and thus Luoyang's nephew-in-law.
** Dai Xiulan is Wuying's daughter, and thus Luoyang's granddaughter.
** Dai Guanting is Lingxin's youngest son, making him Luoyang's nephew.
*The size of the non-communist Chinese market means that a lot of corporations can stay in business just so long as they are successful in China, even if they fail in virtually all other world markets. Sega in this timeline, for instance, still has commercial decline within western markets over the 1990's yet is still considered a major player in gaming due to retaining dominance over China. In general, this is a timeline where in East Asia Sega has influence on par with Disney though hasn't yet breached Western shores yet - it also competes heavily with the major Japanese Anime & Manga producers.
**Sega's strongholds would likely be China & Korea as well as India, Nepal & Southeast Asia.
**Sega would be competitive in Japan, though not dominant.
* Sega in this timeline would be predominant source of most mainstream manhua & donghua in western markets, due to them being the first & largest producer to begin distribution.
** Sega's initial partner for distribution was Miramax, until 1993. Due to animosity between Sega and Disney, they switched primarily to Warner Bros. As a result, in the 2020's it would be HBO Max that has access to most of the "mainstream" Chinese equivalents to anime.