A Sanrio employee displays a 15cm-tall porcelain Hello Kitty doll

Sanrio and Sega Sammy Holdings said in a statement that they had agreed to form a strategic business alliance.

"Under the agreement, for example, Hello Kitty may appear in our video game software," a Sega Sammy spokesman said.

The companies will also discuss jointly developing new products based on their stable of characters and look at potential new services and online businesses, the spokesman said.

Sega Sammy is the holding company for video game developer Sega and pachinko slot machine maker Sammy, while Sanrio is the toymaker behind the "Hello Kitty" line.

Sega Sammy and Sanrio will also study the possibility of enhancing their capital relationship.

Sega Sammy is currently the largest shareholder in Sanrio, with a 13.98 percent stake.

Hello Kitty, which started in 1974 in Japan as a moon-faced cartoon cat on a coin purse, has emerged into a global phenomenon with more than 50,000 different products on sale in 60 nations.