The news from the Bank of Japan turned out exactly as predicted.
Barely a week after Yasushi Mieno took office, a new round of interest rate hikes arrived right on schedule.
On December 29, the final trading day of the first year of the Heisei era, the Nikkei 225 index surged to an unprecedented peak of 38,915 points in a final burst of madness.
Since the 1985 Plaza Accord, the index had soared by an astonishing 270%.
Looking at this sky-high market value, all of Tokyo—no, all of Japan—was lost in the ecstasy of a capital-driven carnival.
But after the New Year, the Nikkei 225 began to slide.
Countless ordinary citizens, who had followed the stock boom into the market, watched the small pullbacks in their accounts and thought it was just a normal technical correction in a bull market.
Yet, the professionals who had been immersed in the market for years smelled the scent of doom.
They knew the five-year-long game of musical chairs had come to an end.
The final note had stopped—leaving the last baton in the hands of those still trapped inside.
And thus began a silent exodus.
At first, institutional investors hoped to exit gracefully, to salvage as much of their paper profits as they could.
But by January 12, 1990, the Nikkei index suddenly plummeted off a cliff without warning, shattering every illusion.
Panic spread through the market like a plague.
Desperate sell orders poured in, like the first flake of snow that triggers an avalanche—setting off a flood that consumed everything in its path.
The next day, SEGA urgently convened a board meeting.
Even before the meeting began, the room was filled with thick cigarette smoke. The atmosphere was heavy and oppressive, like the air after a summer storm.
On the long, expensive mahogany table lay not triumphant reports but sheets of stock charts glowing a sickly green.
The room buzzed with anxious chatter—fears for their personal fortunes, and worries for family and friends.
"My God, this is the end of the world! My in-law's company lost three billion yen in one day yesterday!"
"My brother-in-law's company was celebrating a New Year contract yesterday—this morning the bank came knocking to pull their loans!"
"I just came from the brokerage—people were crying everywhere. A few even fainted right in the hall!"
"Forget about others—what's going to happen to SEGA now?"
Anxiety, fear, despair—every emotion blended into one, turning the boardroom into a collective confessional.
Directors Hoshino and Sugiura from the Asset Management Department exchanged uneasy glances. Both were pale with regret.
Just six months ago, the two of them had been the loudest opponents of the Nakayama father and son's proposal to liquidate domestic assets.
Back then, those in favor of the Nakayamas' plan were either close allies—or just eager to watch Hoshino and Sugiura fail.
Most didn't truly believe in the Nakayamas' reasoning. They assumed it was just an excuse to push for SEGA's overseas expansion.
Some even thought it was a ploy by the young heir to consolidate power and suppress dissent.
"Hoshino…" Sugiura rasped, his voice dry as sandpaper. "We— we actually laughed at him back then…"
Hoshino didn't answer. He just stared blankly at the tabletop.
Laughed? It was worse than that.
They hadn't just mocked him—they had done everything possible to prove that young man wrong.
And yet, every piece of "evidence" they dug up had come back to slap them across the face.
That young man had offered them a "Noah's Ark"—a lifeboat they had almost torn to shreds themselves.
Just then, the conference room doors swung open.
Nakayama Hayao and his son, Nakayama Takuya, entered.
Hayao took the main seat, while Takuya sat slightly behind him.
He wore the same calm, composed expression as always, as if the financial tsunami outside was nothing more than a ripple in his garden pond.
He looked around the table, meeting each of the directors' terrified eyes, and spoke softly.
"It seems everyone knows what's happening."
The room fell silent.
All eyes turned toward the father and son—no longer with suspicion or doubt, but with something close to reverence.
Director Hoshino could no longer hold it in. He shot up from his chair and bowed deeply to Hayao Nakayama.
"President! I apologize for my stupidity and short-sightedness six months ago!"
"If it weren't for your insistence, SEGA would have been torn apart in this market crash like everyone else!"
His words acted like a switch.
One after another, the other directors joined in.
"Yes! The president and managing director's foresight is nothing short of divine!"
Hayao raised a hand, signaling them to stop the flattery.
He said calmly, "Gentlemen, as for this 'stock market crash,' I don't think there's any need to panic."
"As you all know, we began shifting our investments and funds toward the European and American markets half a year ago. By last November, the transition was complete. Our holdings now include diverse investments within the gaming industry, as well as high-quality, flexible blue-chip stocks."
"For the rest of the arrangements, I'll let Takuya explain. Please share any additional suggestions afterward."
Takuya stepped forward and projected his report.
"Beyond investment and capital transfer, our North American president, Tom Kalinske, has expanded our U.S. market share through aggressive discounting strategies. Meanwhile, our European market is growing steadily through cooperation with Ubisoft. So even as domestic consumer power weakens, our overall game sales shouldn't shrink—at least not as much as Nintendo's, whose business relies mostly on Japan."
The room relaxed a little.
"Of course," Takuya continued, "we're not abandoning Japan. I've adjusted some upcoming development schedules to shift resources toward arcade and handheld games. During an economic downturn, affordable entertainment will become mainstream. Let our games be a source of joy for players in hard times."
"Also, all year-end titles were released before December, ensuring they covered the Christmas and New Year sales cycle and recouped costs early."
"In addition, I've discussed with Director Hattori from SEGA Galaxy about launching collaborations with low-cost consumer brands. The goal is to maintain brand visibility and steady cash flow during this recession."
Hattori nodded. "Yes. The cheaper the economy gets, the more valuable these partnerships become. We've already reached a preliminary deal with Uniqlo this week, and several other fast-moving consumer brands are interested."
"Lastly," Takuya said, "we're pushing our used SG-1000 consoles and handhelds to Eastern Europe to develop new markets. Meanwhile, we'll buy back old consoles and cartridges in Japan for discounts—helping players while keeping them loyal to SEGA during tough times."
"For now, that's the main outline of our strategy. I welcome any feedback."
He bowed slightly and returned to his seat.
The atmosphere in the room had transformed—from shock, to awe, to pure admiration.
Those decisions that once seemed "pointless" or "strange" now appeared precise, calculated, and prophetic.
By the time the meeting ended, most of the board's additions were small—monitoring supply chains, partners, and adjusting as needed.
The "crisis meeting" that should have been a tense emergency session had instead turned into something entirely different—
Takuya Nakayama's personal victory showcase.
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