Sega Sammy Holdings, the owner of Sega Entertainment announced on Wednesday (Nov. 4) that the company will be exiting arcade game operations across Japan.

Sega pulls out of arcade game operations in Japan

The company will no longer manage any of the 200-odd arcades that it currently operates country-wide, Sega said in a statement.

Sega Sammy Holdings will be selling an 85.1 per cent stake in Sega Entertainment Co., the subsidiary that operates Sega's game centres, to Genda, an arcade game rental firm, reported Japan Times.

Sega Entertainment is the third-largest amusement facility operator in Japan. The stake will be sold on Dec. 30, 2020.

While Sega will no longer be managing arcades, the company says that it will continue to produce and manufacture game machines, which will be available in other companies' arcades.

Additionally, Genda will keep Sega's name for the game centres, for signage and branding.

Hit hard by Covid-19 pandemic

Sega's exit from game centre operations is likely a result of arcades in Japan struggling in the past year due to the Covid-19 pandemic.

In August 2020, the company closed one of its iconic game centres in Akihabara, which saddened fans overseas.

Japan has been experiencing a steep decline in business and tourism since the Covid-19 pandemic struck countries all over the world.

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