Sega Sells Off Its Arcade Business Due To Coronavirus (eurogamer.net) 24
New submitter clubalien writes: Sega has sold off its arcade business due to coronavirus. In a press release, parent company Sega Sammy Holdings Inc said it has sold the vast majority (85.1 per cent) of Sega Entertainment, its Japanese amusement business, to amusement machine company Genda. Sega put the sale down to Covid-19, which has devastated its arcade business. Sega expects to record "extraordinary losses" from the transition. "As Amusement Center Operations area in Entertainment Contents Business is strongly affected by COVID-19, utilisation of facilities has declined remarkably, and a significant loss was recorded at 1Q of the fiscal year ending March 2021," Sega said. "In addition, despite the recent recovery trend, the situation remains uncertain. We have been considering various options in order to adapt to these changes in business aiming for improvement of the profitability and early recovery of sales of Amusement Center Operations area. "In this process, we have been discussing the transfer of SE shares to GENDA, a company that has a strong desire to expand Amusement Center Operations business and has decided to conclude the share transfer agreement at Board of Directors meeting held today."
Capitalize on the situation (Score:2, Funny)
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Japanese arcades are a mixture of many different types of game. The needed to diversify to survive this far.
You have traditional arcade video games, lots of classics like Street Fighter 2 and newer games. You have special machines with unique cabinets, dance machines etc. VR is popular now.
Then you have sticker booths, basically like those photo booths we have but they let you edit the image with filters, emoji and so forth before printing them off on stickers. Popular with girls. I read something about the
pachinko can go TITO like other casinos (Score:2)
pachinko can go TITO like other casinos
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stern pinball is still gooding good and has not been own by sega for years.
Wait, what? (Score:1)
There are still arcades?
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There are, but there's going to be a lot less of them after this thing wraps up.
It will be harder to find investors to help open new ones, too, so the reduction in arcades will continue.
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SEGA arcades in Japan was probably amongst the biggest ones still left in the world. This truly is the end of an era.
On the other hand, these days you can either buy pre-made arcade cabinets or build your own. There's books and forums [arcadecontrols.com] to help you out. Before you know what's happening, you'll become a soldier in the American vs Japanese joysticks, concave vs convex buttons wars.
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If you went to a Movie Theater or other places kinda popular for Kids Parties. They often have some Arcade systems for people to play while they wait.
Gone are the days where the Arcade use to the the Top Games of of the time, running on advanced gaming hardware that will give you an awe experience. But they are a nice gimmick to spend a few bucks and pass the time.
Not just mothballed (Score:2)
Interesting that they just didn't mothball them until the plague is over.
It's prime real estate in Japan, Korea & China (Score:5, Interesting)
Arcades survived in Asia because it can be hard to have a place to play games given how extreme their space constraints are. Having a bunch of options with a small physical foot print like mobile phones, cheap gaming laptops and the Switch really hurt. COVID was just the nail in the coffin.
Sad, because it's the end of an era. They were the last major arcade operator from the old days. Taito just makes the hardware, and even that's just PCs in a box.
business idea (Score:2)
Spin off an unprofitable business unit into a new company. Let that company fail and declare bankruptcy. Buy it back for pennies on the dollar, or not.
I think MMOs and mobile games are probably a better direction for a business like Sega to focus on. Seems like a lower capital outlay than building arcade machines, and a large market.
Couple problems with that (Score:2)
There are two problems with that. First, if you owe debt you can't just "spin off" that debt into a new company. If I owe you money, *I* owe you money. I can't just assign that liability to FuckYou Inc without your permission.
Secondly:
> Buy it back for pennies on the dollar, or not.
Why the hell would the trustee let you buy it for anything less than exactly what it's worth? Because the trustee wants to go to jail, and become personally liable to the creditors due to their bad-faith action?
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Why the hell would the trustee let you buy it for anything less than exactly what it's worth? Because the trustee wants to go to jail, and become personally liable to the creditors due to their bad-faith action?
A company facing tough economic times would presumable be worth "pennies on the dollar" from where it started. The accounting has to work out that you spin off a company for around net zero to at least deal with the debts. Luckily the credit rating isn't a factor, so even if you're certain to default on those debts you can still pull off a new company in most jurisdictions. (Japan may be special though)
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> The accounting has to work out that you spin off a company for around net zero to at least deal with the debts.
Yes, because someone is going to end up holding that debt.
They aren't going to loan money to a bankrupt spin-off.
> Luckily the credit rating isn't a factor, so even if you're certain to default on those debts you can still pull off a new company in most jurisdictions
It damn sure is, if you move the debt to new owners! I'm no expert on Japan law, but here are some of the structures uses in
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They aren't going to loan money to a bankrupt spin-off.
It damn sure is, if you move the debt to new owners! I'm no expert on Japan law, but here are some of the structures uses in the US:
Like I said. the credit rating usually doesn't play a big part in this. It's a trick that's been done before. I know because I was part of a lawsuit about it (I was a claimant in a US suit), but it might not possible in Japan.
In a Morris trust, the "good" side of the business is spun-off to a third-party who will own it. The brand name may be part of what is sold off. The original owners still own the "bad" part. Whatever the third-party spent buying the good part becomes cash in the hand of the "bad" part, and is used to pay creditors.
In my example the third-party was an LLC formed with some of the owners of the original. They used some tricky accounting to secure debt according to the tools and materials on site. But the value was closer to what it would take to purchase new tools rather than closer to what it woul
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I'm sorry someone tried to screw you. Glad they didn't totally get away with it.
I'm sure once a law suit was involved it wasn't a great result in the end, but it sounds like they didn't just totally get away with it.
'Arcades' died off a long time ago (Score:2)
End of an era. (Score:1)
2020 is the gift that keeps on giving.
So... (Score:2)
So somebody bought Sega's arcade business due to coronavirus then?
if they still have one dump the roms on sigma derb (Score:2)
if they still have one dump the roms on sigma derby and royal ascot rev 1