Sega sells off arcade biz, posts big losses due to CCPVirus woes
Sega Sammy has sold off their venerable arcade business following CCPVirus related business woes.
In a shareholders meeting this week, the company annoucned that they would transfer 85.1% of their shares in Sega Entertainment to rival Japanese amusement company Genda. The latter will operate Club Sega arcades in Japan, while Sega themselves will continue to manufacture the actual games.
“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,” the company said message to investors.
Sega has apparently lost ¥20 Billion ($200 million) over the course 2020. It’s reported that the company’s board didn’t want to sell the arcade division, but had to as a last resort.
Furthermore, Sega has asked 650 employees to “voluntarily retire”, along with executives receiving pay cuts of 10-30%.
“In light of the situation that many of our Group’s business are significantly affected by COVID-19, we have established a Structural Reform Committee to reform our organization structure to adapt to the external environment…“
Layoffs aren’t as common in Japanese business culture as they are in the West, which highlights the seriousness of the situation.
Sega is no stranger to financial woes. The publisher has been been dealing with financial issues for the last 25 years or so. This includes repeated attempts to restructure. Most notably in 2001 when they exited the home console business to focus on arcades and third party development. A lot of their past issues seem to stem from mismanagement at the top levels of the company. Though it’s difficult to comment on its corporate culture today without having any internal insight.
Still, this is disheartening news. If you’re a gamer over the age of 30, Sega probably had a big impact on you. Especially now, since the company has been on somewhat of a rebound with some truly great and iconic games that hearken back to that golden age. Hopefully they manage to bounce back from this, but it shows that not even video games are safe from the scourge of the Communist Orchestrated Viral Infection Disaster.
