Most people in the Northern hemispheres of Japan, America, and Europe won’t know the name TecToy, but it’s still one of the most significant videogame companies in existence. Not because of its incredibly close partnership with Sega (one of the closest for a non-Japanese company), or because it’s the only company still manufacturing Sega hardware - it’s all of these things and the fact they struggled against the odds to create a successful and wholly legitimate company in a region rife with piracy.

To get a full and accurate account of events I spoke directly with the current president of this Brazilian company, Mr Stefano Arnhold, who joined only a few months after it started. He explained the early days, “TecToy was founded in Sept 1987 by Mr Daniel Dazcal and the two Kryss brothers, Leo and Abe, owners of Evadin, a traditional TV manufacturer under the Mitusbishi brand. I only joined the company in December 1987, invited by Mr Dazcal, my former boss at Sharp in Brazil.” As shown, the four gentlemen involved in the new start-up all had previous experience with electronics companies; future success seemed within their grasp. Their plan had been to create “intelligent toys” using modern technology, and catering them specifically to the local market.

Another factor of their success relates to an exceptional regional anomaly. The Brazilian government in 1967 created a Free Economic Zone in the state of Amazonas, called “Zona Franca de Manaus.” The region was intended to be exempt from several taxes, including importing and industrial tax, thereby enabling new industries to form and grow, hopefully boosting the economy. It was in this area that TecToy built manufacturing plants, and later also the Daniel Dazcal Foundation in Manuas city. Arnhold elaborated, “Basically all consumer electronics are assembled in the Industrial Pole of the Free Zone of Manaus, due to tax incentives, and TecToy chose to have its plant there for the same reason.”

They expanded quickly, opening several offices and warehouses throughout Brazil. Their steps towards partnering with Sega were tentative at first, involving not games but a laser-tag device. “In 1987 we contacted Sega and our first licensed product was a toy called Zillion, a laser tag game introduced in April 1988. The product was fully manufactured in Brazil.” It resembled the Master System lightgun and was originally marketed in Japan, based on the phaser featured in the Japanese anime of the same name, (which actually went on to become two licensed games for the Master System, resulting in several separate products all with the same name, Zillion).

After this came the jump to videogames. They had met all the prerequisites needed to represent Sega in South America but, as Arnhold explains, they’d already proven themselves capable in Sega’s eyes. “I think that after our success with Zillion, they saw that we were the best option for Brazil.” Indeed they were, going on to become the most successful legally endorsed games company in the country. He continues, “After the successful experience with Zillion we introduced the Master System in September 1989. Due to an aggressive marketing strategy Master System lead the 8-bit market in Brazil, beating Nintendo, and in 1990 we introduced Mega Drive, which also led 16-bit the market.”

They also created interesting variations of hardware, like the Master System Super Compact. This curious little device was a wireless handheld system, except instead of a dedicated screen it directly transmits visual information to the nearest TV via a small aerial. It was later re-released in neon pink as the “Master System Girl”, with a shift in the intended target audience. It was through TecToy that Sega’s 8-bit debut received its greatest success (remembering it had been beaten by the NES elsewhere), and it continued being marketed as the rest of the technophile world moved on. Nintendo only officially entered the region quite late, and was unable to both compete against the bootleg NES systems already available and also the might of TecToy, who had built up a strong following and a reputation for quality. This gives TecToy the rare honour of being the only hardware company to beat Nintendo in the 8-bit console market.

After partnering with Sega things got very interesting. TecToy started building relationships with other foreign companies such as Capcom, Tyco, Electronic Arts, Acclaim, Midway, Williams, and others. This gave access to many games released abroad which TecToy then translated into Portuguese (including several large RPGs like Phantasy Star), while adapting some using local cartoon characters. Ghost House became Chapolim vs Drácula: um duelo assutador, featuring characters from a Mexican TV show which was hugely successful in Brazil. Asterix became Adventuras da TV Colosso and Teddy Boy became Geraldinho. Interestingly, Psycho Fox, Kung Fu Kid, and Astro Warrior were all localised into a strangely-connected trilogy of Sapo Xule games, starring an environmentally conscious frog. Meanwhile, Wonderboy games had the main character replaced with a girl, Monica, and her friends from a famous Brazilian comic.

Gunstar Heroes on Master System TecToy released many exclusive oddities which are sought after by collectors. The most controversial though is the alleged SMS version of Gunstar Heroes which turned up on eBay several years ago (see image). The auction was stopped early, leading to speculation. We asked the president of TecToy, was such a game ever released? His unedited response regarding TecToy’s dealings: “Gunstar Heroes was only launched for 16-bit.” Of course the game was also ported to the Game Gear, by another company, but if the SMS version does exist, according to TecToy they didn’t do it.

The most exciting element about TecToy is not their localisations, but the games which were released by them only in South America. Several were ports of GameGear games (a system few could afford, while the architecture was nearly identical to the SMS), such as Virtua Fighter Animation, and Dynamite Headdy. They also snapped up the publishing rights to other companies games left in limbo, such as Fire and Ice (SMS) and Nightmare Circus (MD). They also developed their own games (mostly licenses) such as Street Fighter 2, Ferias Frustadas do Pica Pau (Woody Woodpecker Vacations), and Sitio do Pica Pau Amarelo which was based on a children’s book. They also created a 20-in-1 SMS multi-cart bundled with consoles.

Arnhold then picked up the story of how things progressed over the years, eventually moving beyond the Brazilian market and into neighbouring countries. Considering how long ago events happened, his astute memory impresses. “In 1988, after our first full year in the market, TecToy launched 45 products and became the number two toy manufacturer in Brazil. In 1991 the Game Gear was introduced and turnover reached US$ 100 Million, and by 1992 we were already the largest toy manufacturer in the country. Our promotional investment reached US$ 10 Million and we started operations in Argentina and Uruguay, as Sega gave us the task to coordinate all MERCOSUL markets.”

But then tragedy struck as the original founder, Mr Daniel Efraim Dazcal, sadly passed away in May 1992 at the age of 42; in the prime of life, and having built up one of South America’s most successful companies. Of course this didn’t hold them back, and the fiery passion of TecToy prevailed.

Stefano Arnhold finished by speaking about their peak, “In 1993 the company went public with shares traded in the São Paulo Stock Exchange and we also introduced PC Games. In 1994 our Sega Club reached 200 thousand active members (the Club now has more than one million members) and in 1995 we introduced the Sega Saturn. In 1996 we reached the mark of 2MM consoles sold and our hotline was answering 50 thousand calls a month. Over the next year we entered the internet market as a full internet and content provider under license from Compuserve. In 1999 Dreamcast was introduced.”

As for TecToy’s proudest achievements over the years? This question raised some surprises. Along with the expected comments on besting Nintendo and having market supremacy, Stefano revealed some amazing revelations regarding the internet and online banking. As he explains, “Having beaten Nintendo in the 8-bit market; very few people can make this statement. Having introduced in 1995 a Mega Drive accessory that brought people the internet (mainly e-mail), and in 1996 the same technology permitted head-to-head online gaming (with chat) and a Home Banking Product (both were for Mega Drive). In 1998 we reached 1000 software (products) published! Today we are still the number one Brazilian Video Game Manufacturer carrying Sega products.”

I then asked Arnhold why he feels they have been so incredibly successful. He smiles, reflecting on the past, before explaining that a lot was due to genuinely caring about customers. “Maybe the reason for our success was based on low cost, high quality, locally manufactured products, plus aggressive marketing and a good knowledge of our end consumer. We did not only sell them a product, we invited them to join Sega Club where they enjoyed a sense of participating in a community, received special promotions (discounts for everything from movie tickets to Formula 1 Grand Prix seats).”

Beyond this they also took part in several industry firsts, including ventures that had otherwise been limited only to Japan, and developed several world exclusives. “We had an excellent hotline for Tips and Hints, and even started to take [consoles] online before internet really went commercial. We developed games with local characters, localized RPG games, and always maintained the life of a console, even after Sega dropped them. Master System received most Game Gear exclusive, as well as new developments such as Street Fighter.”

I then challenged him, questioning if TecToy had ever considered acquiring a license from, for example, Nintendo. But he was resolute in his answer, “No, we were always faithful to Sega.” This is true since while Sega left the hardware market years ago, it’s still viable in Brazil and so TecToy continues to manufacture Sega systems. Best of all is they contain plenty of high-quality built-in games. As seen online they still market the “Master System 3”, with 120 games installed; these include four Alex Kidd games, Baku Baku Animal, three Fantasy Zone games, Penguin Land, Rainbow Islands, and too many other classics to list. Complementing this is their “Mega Drive 3” with 71 installed games, again featuring a very healthy selection of all your favourite titles (making the UK’s Radica pads look pathetic). Though sadly TecToy have ceased manufacturing new cartridges for systems, and development of post-Mega Drive machines has also stopped.

Much of TecToy’s success has come from being partnered with Sega when they were hardware manufacturers and so we asked, what is the future of TecToy now that Sega is software only, and no other company’s hardware (Nintendo, Microsoft, Sony) has such an established stronghold? Mr Arnhold was resilient and answered with a sense of pride, confident they would continue to succeed and hinting at great things to come. “Our main business today is the manufacturing of DVD products (Hardware under TecToy brand and Karaoke software using VCD technology). The future will come with Sega again through mobile games.”

TecToy and the market they helped to create are a fascinating alternative to what we have in Japan and the West. While acquiring their wares is not an easy task, and the hardware won’t work on non-Brazilian TVs, head over to www.tectoy.com.br to see what’s available to our Portuguese speaking cousins.

Special Thanks:

Special thanks to the president of TecToy, Stefano Arnhold, for answering questions and kindly donating photos. Thanks also to www.consolemad.co.uk for providing the Zillion laser-tag photo.