After SEGA Throws in the Towel: Japan’s Arcade Slump Continues as 8,000 Vanish in a Decade

Japanese arcades, once a global gaming giant, are facing a slow fade. Over the past ten years, nearly 8,000 game centers have vanished, with bankruptcies hitting a five-year high in 2023. This decline isn’t new – arcades have been losing ground since the 80s (remember 26,000+ back then?). The culprit? A double whammy:

[Graph of Japanese game center bankruptcies]

 

Rising costs (think taxes and electricity) and the surging popularity of crane games, which require less investment in traditional arcade machines but are vulnerable to prize price hikes. Sega’s 2022 arcade exit speaks volumes about the challenges facing this nostalgic haven.

Claw machines are all the rage in Japanese arcades these days, but the downside? Cranes are feeling the pinch of rising prize costs, making it tough for arcades to keep profits plump.Speaking of profits, running an arcade isn’t exactly a goldmine. Reports say arcade businesses only make about 6 yen for every 100 yen they bring in, which seems like a terrible business model.

SEGA’s decision to exit the arcade market seems to make more sense as the numbers come in, but I’m sure a lot of us fans are disappointed by all these changes. But businesses have to do, what they have to do and adapt.

[Via: VGC]

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