Sega Entertainment Sells Most of Its Arcade Business, But the Infamous Sega Branding Will Survive

You've probably noticed that arcades are in an interesting place these days. Long, long ago people flocked to these dark, smoke-choked holes to play Pong, Donkey Kong, Street Fighter 2, and Dance Dance Revolution. Home consoles have taken a big bite out of arcades, but Sega's games are still a familiar presence thanks to management by Sega Entertainment, a subsidiary of Sega Sammy. However, COVID-19 has made it difficult for enthusiasts to gather and do a little electronic sparring. Consequently, Sega Sammy sold most of Sega Entertainment's shares to the Japanese amusement rental business GENDA.

Yesterday, Sega admitted to shareholders that the COVID-19 spread and subsequent shutdowns has been very hard on the company. Sega Sammy will transfer 85.1% of Sega Entertainment's shares into GENDA, which will hopefully smooth out a very rough year that caused Sega to suffer "extraordinary losses." The September closure of Sega's iconic Akihabara arcade punctuates the company's troubles.

Don't worry; neither the Sega brand nor its arcade games will go extinct. Twitter user Nibel, who consistently reports well-sourced news from the Japanese side of the industry, says Japanese game magazine Famitsu has been in contact with Sega about the acquisition. The arcades will retain their "Sega" branding, and Sega will continue to develop arcade titles. That said, some of the arcade development staff will be shifted over to console game development. If you know Japanese, you can read the Famitsu article for yourself.

These are rough times for everyone, so it's not surprising to learn Sega is taking drastic measures to make sure it survives the pandemic and economic downturn. With any luck, slimming down now will result in a bountiful future once everything bounces back to some semblance of normal.