According to reports, Sega Sammy sold 85.1 percent of its shares in the Sega Entertainment division to Japanese rental business Genda Inc. The decision was made due to the heavy impacts of COVID-19 on its arcade and other entertainment business.
As reported by Games Industry, early signs of the collapse of the Arcade business in Japan was evident after the heart-crushing story of the closure of Sega’s famous Akihabara arcade in Japan. The entertainment building was opened in 2003 under the name Akihabara Kigo, the arcade welcomed gamers and otakus all over the world.
Sadly, COVID-19 has caused “extraordinary losses”, estimated around $191 million by the end of the fiscal year, as it was confirmed by Sega Sammy in a meeting with shareholders today. The purchasing company, Genda has acquired the amusement machines and all of its associated prized and items of Sega Entertainment.
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 improvement of the profitability and early recovery of sales of 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 Amusement Center Operations business and has decided to conclude the share transfer agreement at Board of Directors meeting held today.
It’s uncertain how Genda plans to invest and improve Sega Entertainment, it’s mentioned that the acquisition will bolster Genda, Sega is expected to continue selling and manufacturing arcade machines.
The impact of the COVID-19 has been huge in the gaming industry, both Sony and Nintendo confirmed significant losses in both sales of hardware and software. Xbox boss, Phil Spencer warns that the full effect of the pandemic disease will be seen in 2021.
Source: Games Industry