The third generation home console is launched in Japan in 1985, with Alex Kidd as its mascot. The console is latter redrawn before being sold in the US as the Sega Master System in June 1986, one year after the release of the NES. Its selling price is then $ 200. Although the Master System is on one or a few points more advanced than the NES, it does not reach the same level of popularity in the United States. This deficit in popularity is amongst others attributable to the larger quantity of games on the NES and to its additional marketing year.
The Japanese firm then has 90% of the North American market. Hayou Nakayama (CEO of Sega) decides to not deploy much effort on the marketing side. In 1988, the rights related to the console in North America are sold to Tonka, but the popularity of the Master System continues to decrease.
In the 1990s, Sega is successful with the Sega Genesis and redeems the rights of the Master System from Tonka. Sega then launched a redesigned version of the Master System, the Master System II. This new more compact version, no longer has a “reset” button or port that accepts cartridges in card format. These last two changes are made to minimize production costs.