Sega courted by Namco

Japanese software maker Namco Ltd , known for its "Tekken" fighting games, said on Thursday it wants struggling fellow game maker Sega Corp, creator of "Sonic the Hedgehog," to reopen merger talks.

A deal would torpedo Sega's planned October union with pinball machine maker Sammy Corp, a move widely seen as a takeover of Sega by financially sound Sammy.

Sega said it is studying Namco's proposal but has not set any deadline for a decision.

The move underlines the intense rivalry and difficulty of making profits in Japan's $5 billion a year game software industry, and follows the April 1 merger of two popular videogame makers that created third-ranked Square Enix Co

A Sega-Namco merger would rank fifth in the Japanese market with annual sales of 350 billion yen ($2.9 billion) and market capitalization of $1.74 billion, similar to that of Square Enix.

"We are certain that consolidation of the two companies' operations in every business field would bring about maximum synergy effects," Namco said in a statement.

News source: Reuters - Gamemaker Sega Courted by 'Tekken' Creator Namco

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