Sega Sammy Closes Arcade, Sells Majority of Arcade Division, and Retires Employees Amid Financial Troubles

What once was a force in the Japanese arcade industry, Sega Entertainment, the arcade division of Sega Sammy has taken several drastic actions following significant losses. It’s been a whirlwind of unfortunate events, so consider this a summary of what has occurred:

The Akihabara Sega Arcade closed Spring through June in compliance with COVID-19 restrictions. In June, Sega hoped to give a boost to the ailing arcade industry with “Fog Gaming,” a process by which networked arcade cabinets can be used for cloud computing functions. Despite this, the Akihabara Sega Arcade permanently closed on August 30th.

A month after this closure, Sega Sammy Holdings proceeded to significantly reduce its stock, staff, and costs regarding Sega Entertainment, opting to sell the majority of the division to Genda Inc, a company specializing in arcade machine rentals. Sega Sammy will retain only 14.9% of their stock, and anticipates losing ¥20 billion following the sale by March. It is believed that this move equates to Sega Sammy leaving the industry of owning and operating arcades in Japan; however, Sega Games (the game development division) confirmed that surviving arcades can continue to use the Sega name.

As a consequence of the sale, Sega Sammy is offering voluntary retirement with “payment of extraordinary retirement allowances and reemployment support for applicants” to 650 full time employees, while management and executives across divisions will have a significant pay cut ranging from 10% to 30%.

Despite the slow decline of Japanese arcades over the last decade, Sega remained a strong and iconic presence throughout. Whether you’ve visited one of Sega’s arcades in person or through the Yakuza series, they stand as a reminder of Sega’s legacy across the history of gaming. Our sympathies go out to all those whose livelihoods are impacted by these events, and our hopes remain that Japanese arcades can weather these difficult times.

Sources: Sora News 24, Ars Technica, GameIndustry.biz, Anime News Network, Kotaku

Images from Google Maps

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GX

A podcaster since 2008, GX originally founded The Spindash podcast, until joining Sonic Stadium's monthly Sonic Talk. He currently co-hosts the show and runs weekly streams on Stadium's Twitch channel at https://www.twitch.tv/sonicstadium

7 Comments

  1. Really sad news to hear, one of my dreams when I finally made it out to Japan was to visit a SEGA arcade 🙁 I can only imagine the number Covid did to the industry, it’s disheartening to say the least.

  2. Can’t say I’m surprised. The Arcades are no longer as profitable as they once were.
    SEGA should start considering the idea of selling more retro-consoles, or even try to enter into the VR market.

      1. Unstable markets? The SEGA Genesis-mini was a success, and there was never a better time to start selling VR headsets.

  3. I’m so sad, I always wanted to visit Akihabara and enter a SEGA arcade. I hope you’ll be able to recover from this SEGA. 🙁

  4. Sega of Japan employees surely loves their arcades more to lived on their hearts more than the consoles of surely, other countries HQs Sega of America & Sega of Europe loves the opposite of consoles more than the arcades of their industry games type they liked working on.

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