Sega is to concentrate on software

The unprecedented step follows last week's announcement that Sega is ending production of Dreamcast.

The resulting one-off loss of 80bn yen will be more than covered by Mr Okawa's gift.

Correspondents say it is not clear just why the president has made such a generous move.

In recent years, several prominent Japanese business figures have publicly apologised, often tearfully, when their companies have hit problems.

Mr Okawa's gift is thought to stem from that same tradition of honour in Japanese society.

Shares up

Sega says it has no plans to sell the shares returned by Mr Okawa immediately.

In announcing its decision to end the production of Dreamcast, Sega said it would be concentrating on the software side of its business.

Sega has suffered from intense competition, with its Dreamcast console failing to match the popularity of its best-selling rival, Sony's Playstation.

Following the end of production, net loss estimates in Sega have increased to 58.3bn yen ($502m) from 23.6bn yen ($203m).

However, the move sent Sega shares up 7% so far this month, outperforming a 3% fall in the benchmark Nikkei 225 average

On Wednesday, Sega shares ended down 2.05% at 1,812 yen.