For decades SEGA's name has been above Japan's bustling arcades. Then COVID-19 disrupted the market, forcing SEGA to spin off its arcade business to avoid disastrous losses. Now SEGA's name is being removed entirely.
In 2020, SEGA sold off 85.1% of its arcade business shares to Genda Inc. A new company was born from this transaction: Genda SEGA Entertainment.
Today Genda announced that it has purchased 14.9% of SEGA's remaining shares and the company will be renamed to Genda GiGo Entertainment. SEGA's name will be removed from all arcade centers throughout Japan and be replaced with the new GiGo brand.
SEGA isn't out of the arcade business entirely. SEGA will simply not manage arcade operations any more, but it will continue making and supplying arcade game cabinets and pachinko machines for GiGo's arcades.
Although disappointing, this move was necessary for SEGA. The company forecast substantial losses if it hadn't sold its shares to Genda.
Amusement Center Operations earnings for 2020-2021 would've looked like this if SEGA hadn't off-loaded the division:
- Net Sales: 277 billion yen (-25% YoY)
- Operating Income: -15 billion yen (-154% YoY)
- Net Income: -20 billion yen (-179% YoY)
- Profit: -17 billion yen (-223% YoY)
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