David Rosen, a Brooklyn-born entrepreneur who transformed his photo booth business in Japan into Sega enterprises, the video game giant that dominated arcades, basements and dorm rooms with blockbusters like Mortal Kombat, Sonic the Hedgehog, and N.H.L. ’94, died on Dec. 25 at his home in Los Angeles. He was 96.

During a four-decade career that began in the 1950s with coin-operated machines and culminated with the introduction of cutting-edge home gaming systems, Mr. Rosen was a visionary figure who helped shape what is now a $200 billion industry.

To Mr. Rosen, gaming represented an entirely new category of entertainment. “Activities such as television, movies and sporting events all have a valid place in our society, yet these forms of entertainment lack an important factor in satisfying a fundamental need,” Mr. Rosen wrote in Play Meter. “That need is active participation, which is, of course, what computer video games are all about.”