Game maker Namco Ltd. said Thursday it is in talks with Sega Corp. over a possible merger that would create the country's largest supplier of game software and arcade machines.

But some analysts are skeptical about the synergy between the creators of "Pac-Man" and "Sonic the Hedgehog," whose combined annual sales for the 2001 business year stood at 358.47 billion yen, saying there is little to gain from a tieup.

Sega confirmed in a news release it has received an offer from Namco and will consider the matter carefully.