Sega Leaves Japanese Arcade Business After 50 Years

Sega is ending more than 50 years in the arcade business.
Sega is ending more than 50 years in the arcade business. / SOPA Images/GettyImages

Sega has exited the Japanese arcade business, ending more than half a century as one of its most prominent companies.

Sega planted the seeds for this exit in 2020, when lockdowns spurred by the COVID-19 pandemic first began to wreak havoc on the industry. At the time, it sold 85% of its arcade shares to the arcade company Genda, which operates under the GiGO brand. Now, Genda has picked up the rest of the arcades and shares, ending Sega's run in the arcade ecosystem.

Arcades have trended downward in popularity since the advent of the home gaming console, but Japan has held onto the tradition longer than most of the rest of the world. Even still, arcades have continued to shutter over the ensuing years, and the pandemic was the nail in the coffin for many.

At its peak, Sega is said to have operated close to 1,000 arcade sites in Japan at its peak in the late 1990s.

Sega Entertainment, the division of Sega that handled its arcades, will be renamed to Genda GiGO Entertainment, and all the Sega-branded arcades across Japan will have their branding changed to GiGO.

Sega also manufactures and sells arcade machines. It will continue to do so even after the sale of its arcade locations.