The Sega merger: announced, then undone in four months (1997)

An eight-year reckoning with the problem of scale

The explanation Makoto Yamashina gave in 1997 — a “gulf between corporate cultures” — appears to have been only half the truth. The gap between the public words and the inside story revealed twenty-three years later mirrors the state of Bandai’s corporate governance at the time, in which the will of a single founding family could decide the fate of a management decision. The board’s wandering — reversing its policy back and forth within the month of May alone — can be read as arising from that same structure.

In exchange for calling off the merger, Yamashina stepped up to chairman, pushed his father and the dissenting directors away from the centre of management, and concentrated authority in himself; one could see it as a move to give up the name and take the substance. Bandai then spent the next eight years pursuing, on its own, the path of a “comprehensive entertainment company,” and after the joint Gundam development of 2004 it merged with Namco in 2005 to take up the challenge of scale once more. That it realised, eight years later and with a different partner, the merger it could not achieve in 1997 tells us how long securing scale remained an unsolved problem for this company.