The Arcade business collapses in Japan

The Arcade era was glorious, and millions of players worldwide wrote life stories in the venues dedicated to this, at the time, novel and futuristic form of entertainment. Of that, little remains, only a niche kept alive by enthusiasts, nostalgics, and researchers. However, even that small scene faces serious problems, as is the case in Japan, as reported by Level Up.

The Arcade niche faces serious problems in Japan

According to a recent report from the analysis firm Teikoku Databank (via VGC), the Arcade and related entertainment business in Japan is in trouble, with 18 bankruptcies recorded in the last fiscal year, an increase compared to previous years. It is stated that the pandemic situation accelerated the downfall of this type of business, which, despite being a niche, had found a way to survive.

However, the economic situation Japan has faced in recent years has brought nothing but trouble to Arcade owners. Increases in operational costs, such as maintenance for Arcades and other machines, along with rising electricity tariffs, have dealt a heavy blow to proprietors.

A shift towards other types of attractions worked for a while, but Arcades were sidelined

Additionally, the Teikoku Databank report reveals that Arcades in these businesses are decreasing in presence and importance. In recent years, there has been a shift towards crane-type machines, where users try to win a prize. However, the financial situation has also created a negative environment for this type of business, as investment in prizes has decreased due to the high costs of the products offered to attract customers.

In 2022, a historic event took place in Japan, as SEGA sold 100% of its legendary Arcade operation to GiGO Entertainment, leading each branch to adopt the new company's name. This move also brought a shift towards other types of attractions, relegating Arcades.

Unfortunately, the outlook is bleak for the Arcade business in Japan, as profits continue to decline, and over time, fewer businesses will keep this era of video games alive, which is about to bid farewell.

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