Sega is a Japanese company but it was started by an American named David Rosen in 1951. As the Japanese got out from under the crippling effects of World War II, they began to have some spare coins for amusement. Rosen formed Sega and imported mechanical arcade games from the USA. Sega originally imported cheaper games that had run their course in American amusement parlors but eventually it started importing current games. This, however, proved highly expensive, as the Japanese government levied large fees on imports that weren't tied directly towards the rebuilding efforts. Sega, capitalizing on the acquisition of a jukebox manufacturing company, was able to switch to producing its own games. Its first was called Periscope, released in 1966.

Periscope, designed by founder David Rosen, was a behemoth. It used chains to drive cardboard ships. The object was to spot the ships with your periscope, press a button, and hit them with your torpedoes. The torpedoes were actually beams of light. The game proved successful because of a realistic periscope interface and the best sound effects for a machine of that time. The game took Japanese game parlors and train stations by storm. Its fame quickly spread to arcade owners in Europe and the USA. Pretty soon Sega, previous an importer of arcade games, was in the game exporting business.

The one problem with Periscope was that it was an expensive piece of machinery for the American market. As well, it took up more floor space, crowding out other games. Sega fitted the export machines with quarter slots. Previous to Periscope, American arcade games charged ten cents. Periscope has the distinction of being the first arcade game to set the traditional quarter a play price. (FYI, Dragon's Lair was the first game to break the 50 cents barrier.)

Apparently a working version of Periscope is still in operation at Cedar Point in Sandusky, Ohio.

In 1976 Midway released an electronic, raster version of Periscope called Sea Wolf.