Wii Crippling Japanese Arcade Scene

Feb. 9 9:12 AM by Lynxara

This is one of those stories that may not seem to impact you immediately, but it could have serious implications for the longevity of already-ailing arcade genres like shooters and fighters. Reuters reports that the popularity of the Wii is causing major problems for Japanese arcades and companies that get a significant part of their revenue from arcade titles, namely Namco Bandai and Sega Sammy.

Shares in Japanese toy and amusement arcade firm Namco Bandai Holdings (7832.T: Quote, Profile, Research) fell for a second day on Thursday after it issued a shock downward revision to its earnings outlook and said it would close 50 to 60 arcades, about one-fifth of the total.

"A lot of the types of games that people played at an arcade can now be done at home," company spokesman Yuji Machida said.

Sega Sammy's already announced the loss of 100 arcades to the Wii. Given that Namco Bandai and both the Sega and Sammy arms of Sega Sammy are important producers of Wii software, it becomes increasingly hard to argue that the Wii is good for third parties.

Comments

This article is just funny to me. We havent had an arcade in my area for 10 years now. It wasnt due to the Wii then and it isnt just due to the Wii now. It's not like the Wii is the only console on the market capable of recreating an arcade experience. Also it mentions only 2 companies who are taking loses then says its hard to argue that 3rd parties benefit from Wii because 2 out of what 20-30 3rd party companies are losing arcade consumers..

 

Unless you live in Japan, your comparison makes basically no sense. Japan's arcade scene survived the past ten years just fine and until recently supported a lot of ridiculously elaborate cabinets, and a lot of variety.

I also see you didn't RTFA. Namco Bandai is shutting down 50 entire arcades, which represents 1/5th of their company's holdings nationwide. Sega Sammy has shut down 100. They are more or less the largest arcade chains running in Japan.

This means that all manufacturers and developers of arcade hardware and software in Japan have suddenly lost 150 outlets that could've bought their wares. It means the market for everyone's product has shrunk dramatically and demand for all arcade product is decreasing, since Namco Bandai and Sega Sammy have dramatically fewer arcades to purchase machines for.

When other public financial results related to the situation roll in, I'll post 'em. As it is, it's really hard to argue that the Wii is giving any long-term benefit to Namco Bandai or Sega Sammy based on how badly the arcade situation is hurting both companies financially. This comparison can extend to basically any Japanese third party with a significant investment in the arcade scene (like, say, Konami).

 

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