Japanese giant SEGA will launch its first Western games development centre in Solihull today.
The move will see SEGA investing between £20-30 million in the Blythe Valley Business Park site over the next three years, creating 80 jobs within the next 12 months.
SEGA hopes the site will become a hub for the development of driving/racing games for the European and US markets.
Named the SEGA Driving Studio, it will concentrate on games for the new generation of consoles, including the new Xbox 360. The first game from the site, called Full Auto, is due to be released in December, in time for the launch of the Xbox 360.
Other game launches are planned for Spring 2007, Christmas 2007 and Spring 2008.
Each game produced at the site is expected to cost between $10 million (£5.8 million) and $20 million (£11.5 million) to develop.
The Solihull site is the first in an expansion drive by the Japanese company, which aims to take advantage of massive game sales and developer expertise in the West.
Mike Hayes, president of Chiswick- based SEGA Europe, said: "Video games developed by the Japanese
were massively successful in the 1980s and early 1990s, but over recent years Western developed PC games have been growing in popularity.
"Now a new generation of video consoles are about to be launched which will rival the pc and SEGA wants to take advantage of talented Western developers to catch up."
SEGA said it chose the UK because of its reputation for producing world-class driving games - the massively successful Grand Theft Auto game was designed by Dundee- based developer Rockstar.
SEGA, which will add to a number of established game developers in the region including Leamington Spabased Codemasters and Blitz Games, said the Midlands offered a great location.
"Great game developers don't just exist in London, but across the whole of the UK," he said.
"Having a base in the Midlands gives us greater access to this talent."
In March SEGA acquired Sussex-based developers Creative Assembly, known for their Total War strategy games.
"We plan to expand in both Europe and the US through acquisition but, where we feel the talent exists, we will be setting up centres similar to the Blythe Valley site," Mr Hayes said.
He confirmed that the majority of European sites were likely to be based in the UK and did not rule out the possibility of many being based in the region.
"It's still too early to tell where we will base future UK sites but it would make a lot of sense for them to be in the Midlands," Mr Hayes said,
SEGA shot to fame in the late 1980s with its range of arcade video games and the SEGA Master System.