By now, Nintendo's origin as a playing card company in late 1800s Japan is a major bullet point on gaming history's "Interesting Things" list, but lesser known are Sega's humble origins. In 1940, a company called Service Games (see where we're going with this?) began operations in Honolulu, Hawaii and in 1951 relocated to Tokyo to get into the jukebox and slot machine manufacturing business.
Then, in 1954, an American Air Force officer named David Rosen founded a company in Tokyo that would eventually evolve into Rosen Enterprises, which focused on photo booth production and importing coin-operated games into Japan. Rosen Enterprises' success lead it to own 200-plus arcades in Japan.
Rosen himself, recognizing a still-thriving Service Games as his only real competition, arranged a merger of the two corporations with himself as the new company's chief executive officer. That company's name, of course, was SEGA, a pseudo portmanteau of "service" and "games." Sega's focus shifted from importing to production, with its first title being a submarine game called Periscope. As it happens, Periscope was the first arcade game to ever cost 25 cents per play.
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