Sega-Bandai merger falls short of game day

TOKYO — Sega Enterprises and toymaker Bandai said Tuesday they will cancel a planned merger that would have created Japan’s largest game company.

The companies reportedly cited a difference in corporate philosophy as the reason for bailing out of the marriage.

The announcement came a day before the companies had planned to approve the merger pact.

The company that would have been born of the merger of Sega, the maker of the Sega Saturn, and Bandai, known for its Power Rangers toys and “Tamagotchi” virtual pet, was scheduled to be formed Oct. 1.

The real reason the merger failed may be differing balance sheets.

Sega has been losing money on its Segavideo game and is facing stiff competition from Sony’s Play Station and Nintendo’s 64-bit videogame.

Bandai, which has a number of failing product lines, also has the hottest toy on the globe. It has shipped about 5 million units of “Tamagotchi” virtual pet since it was released in November.

Both companies will announce their earning results for 1996 on Wednesday.

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