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SEGA exits arcade business after 56 years

By Kara Santos Published Jan 31, 2022 4:57 pm

After more than 50 years, SEGA has pulled out of the Japanese arcade business.

SEGA Entertainment’s remaining arcades will be sold to arcade company Genda Inc. which operates locations under the GiGo brand, as reported by Nintendo Life. The rebranding of GiGO is an acronym for “Get into the Gaming Oasis”

Since the Japanese multinational video game and entertainment company’s first arcade game Periscope was launched in the late 1960s, SEGA has been a major player in the arcade industry. SEGA’s arcade classic hits include The House of the Dead, OutRun, Virtua Fighter, Virtua Racing, and countless others.

SEGA first signalled the move back in 2020 during the first year of the pandemic, a poor year for the arcade industry in terms of revenue. The company shifted 85 percent of its arcade shares to Genda, and has now completely pulled out of the arcade business.

Hisashi Kataoka, Chairman of GENDA announced via Twitter on Friday (Jan. 28) that they would be rebranding the SEGA stores in Japan to GiGO starting with Ikebukuro, Akihabara and Shinjuku. 

“We will switch the store names of SEGA stores nationwide to GiGO. We thank SEGA for its 56-year history and hope that it will be an oasis that will satisfy people's thirst with realistic entertainment. Jump into the oasis of the game! GiGO is an acronym for Get into the Gaming Oasis. First from Ikebukuro, Akihabara and Shinjuku. And to the whole country,” said Kataoka in Japanese (translated by Google).

The shift marks the steady decline of the arcade industry as more people move to gaming at home and mobile gaming. Since COVID-19 hit, the Japanese arcade industry has been severely impacted, with locations globally shuttered as part of lockdown measures.

SEGA was forced to close its famous Akihabara arcade in September 2020 and later split its video games and amusement divisions.

Last year, the video game publisher also closed one of its iconic Tokyo arcades after 28 years of operation, due to the expiration of the fixed-term building lease contract and plans to renovate the building itself.

In 2021, Namco Funscape London finally closed its doors after 25 years.

SEGA will reportedly be focusing more on its console and PC games business as it looks to the future of gaming.

As previoulsy reported by Engadget, the publisher teased a new “Super Game” strategy in relation to a cloud partnership with Microsoft, which will center around developing new and innovative titles with a focus on global, online, and community gaming.

“This proposed alliance represents SEGA looking ahead, and by working with Microsoft to anticipate such trends as they accelerate further in future, the goal is to optimise development processes and continue to bring high-quality experiences to players using Azure cloud technologies,” the company said.

According to NintendoLife, SEGA Entertainment only runs arcade locations, which is different from the arm of the company that manufactures and distributes its actual arcade machines, so hopefully, we'll still be seeing SEGA games in other amusement arcades.