Sega Sammy Holdings Inc. announced that it has sold off 85.1% of Sega Entertainment, the company's arcade business located in Japan. The purchase was made by Amusement machine company Genda. According to Sega, the decision to sell came about as a result of the coronavirus pandemic, which has had a massive impact on profits from that side of the business. While the situation has been improving in the country, the overall uncertainty forced Sega to consider ways to adapt. Despite the change, Sega will continue to produce new arcade games, and the company's name will remain on arcade centers throughout the country.
The change is certainly a disappointing one. While arcades have mostly died off across North America and Europe over the last two decades, they remain a staple in Japan. New arcade games are consistently produced, and they remain a draw for players of all ages, as well as tourists. However, according to Sega "utilisation of facilities has declined remarkably" due to the pandemic. The sale is just the latest example of the impact the pandemic has had on the overall video game industry, and the ways that companies have been forced to make changes.
It's interesting to see the various ways that the video game industry has adapted since the pandemic began. From the start, video game publishers and developers were in a unique position to switch to work-from-home status, and it seems that many have been able to continue doing business with minimal issues. However, a number of games have seen significant delays this year, and it's clear that there has been a learning curve associated with developing from afar, as opposed to having a team under one roof. Unfortunately, there probably wasn't a way that Sega could adapt its arcade business to continue suffering these types of losses.
Sega expects to incur "extraordinary losses" this fiscal year as a result of the sale. Interestingly enough, most fans in the region likely won't notice a change, as the Sega branding will remain. It remains to be seen whether or not Genda will have better luck with the arcade business following the sale, but it certainly shows just how much industries around the world are still reeling.
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