Isao Okawa, the man credited with expanding Sega's video-games business only to see it fall behind rivals Sony and Nintendo died Friday. He was 74. Okawa, who was president and chairman of the video-game company, died of heart failure at a Tokyo hospital, company spokeswoman Miyako Shimizu said. In 1984, Okawa became chairman of Sega Enterprises Ltd. after the computer services company he founded purchased a stake in the video-games machine maker. He took over as president in June 2000, when Shoichiro Irimajiri stepped down to take responsibility for poor sales of the Dreamcast game machines.

Sega, which said it would stop making the Dreamcast console on March 31 but will continue to make games for Sony Corp. 's PlayStation 2 and Nintendo Co.'s Game Boy Advance, predicts a consolidated net loss of $180.3 million in the fiscal year ending March 31. Okawa said in January that he would contribute $730 million of his own money to help the company.
Charles Bellfield, a spokesman for Sega of America, said there is no change in its business plans for both Sega Japan and Sega America.

Bellfield would not comment on a replacement for Okawa. He noted that Hideki Sato continues as the representative director and chief operating officer, acting now as the most senior official responsible for day-to-day activities for the company.

Industry followers do not see Okawa's death as a major setback for Sega in the long term.

``The company's direction will not be affected,'' Shahed Ahmed, news editor for Gamespot.com, a video game related site, based in San Francisco. ``They are going to go forward in developing their software games.'' Sega declined to provide details about survivors or funeral arrangements. The company plans a memorial service later.