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Sega Sells Its Arcade Business Due To COVID-19 Pandemic

Source: Pola Damonte via Getty Images / Getty

It should come as no surprise the arcade gaming industry has taken a hit due to the COVID-19 pandemic. One of the biggest names in the arcade game business, Sega, is officially taking its quarters and going home.

Eurogamer is reporting that Sega Sammy Holdings Inc, the parent company of Sega Entertainment, has felt the sting of COVID-19, like many other companies that rely on human foot traffic. In a statement, the company revealed it has sold 85.1 percent of its Japanese arcade business to the amusement machine company Genda.

Per Sega:

“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.

“In addition, despite the recent recovery trend, the situation remains uncertain. We have been considering various options in order to adapt to these changes in business, aiming for the improvement of the profitability and early recovery of sales of the Amusement Center Operations area.

“In this process, we have been discussing the transfer of SE shares to GENDA, a company that has a strong desire to expand the Amusement Center Operations business and has decided to conclude the share transfer agreement at Board of Directors meeting held today.”

This isn’t shocking because an arcade is the last place anyone would want to be in the middle of a pandemic, being that people touch the same arcade machines, and it would be very hard to maintain distance. In an interview with Famitsu, Sega confirmed that customers will still be able to visit the locations, and it will still develop arcade games and will retain the Sega name when the sale to Genda is complete.

That’s interesting being that Sega did close its Akihabara Building 2 arcade, which is considered one of the most iconic video game arcades, back in August. While this pandemic still rages on and so safe vaccine is available yet, we expect more locations to shutter.

Photo: Pola Damonte via Getty Images / Getty