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Faltering COVID-19 Business Prompts SEGA to Sell Legendary Arcade Operations

If you talk to people who grew up comparing SEGA and Nintendo, they had definite ideas about what made each company great. A key entry in the SEGA column was its strong arcade background. The company owns several dominant arcades in Japan, stocked full of compelling SEGA arcade cabinets (and others too). At least, it did until this week.

As reported at Eurogamer, SEGA arcades no longer count SEGA Entertainment as their majority owner. SEGA Sammy Holdings has sold 85.1 percent of its ownership to Genda, an amusement machine company that will promptly take over operations. The arcades will continue to display the SEGA branding and SEGA will continue to manufacture arcade machines. That should minimize the obvious impact on consumers.

“As Amusement Center Operations area in Entertainment Contents Business is strongly affected by COVID-19, utilization of facilities has declined remarkably, and a significant loss was recorded at 1Q of the fiscal year ending March 2021,” SEGA said.

In other words, from April through June of 2020, the first quarter of fiscal year 2021, SEGA’s arcade centers took a beating. The company is uncertain customers will return in large enough numbers to turn the centers profitable anytime soon, and shareholders will not be pleased in the likely event the division continues to bleed yen. A quick sale puts that ball in someone else’s court.

The writing has been on the wall for some time. SEGA recently closed its iconic Akihabara Building 2 arcade, an action once unthinkable during thriving periods of years past. Consumers have already been losing interest in playing for tokens, and apparently the possibility of dying for their hobby enthuses them even less. People can be funny that way.

Written By

Jason Venter spends as much time as he can playing, writing, and talking about video games and entertainment. He often does so at HonestGamers, a niche site he founded after graduating high school in 1998. When exploring virtual worlds in games, film and literature starts to wear him out, Jason winds down by taking walks in the beautiful Pacific Northwest with his lovely wife. Meet up with him on Twitter on @jasonventer.

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