In 1990 , Sega ordered its in @-@ house development studio , AM8 , to develop a game featuring a mascot for the company . This was a position already held by the character Alex Kidd , but he was considered similar to Mario and deemed unsatisfactory ; Sega president Hayao Nakayama wanted a character as iconic as Mickey Mouse . Sega had competition from Nintendo and its mascot , Mario , in mind ; Nintendo was dominant at the time , particularly after the release of the successful Super Mario Bros. 3 , and Sega wanted a foothold in the industry . Although the company had some success with Genesis ports of its arcade titles , it knew this would not be enough .