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Credit crunch hits Japanese video games arcades

By Naved Akhtar     Feb 11, 2009 in Business
Sega Sammy has said they will be closing over a third of its Japanese arcades. The financial crisis combined with lack of new interesting titles has caused the arcades industry to collapse.
Tokyo-based Sega Sammy has been behind some of the most famous games in history such as Out Run. In 1993, Sega managed 1,231 arcades but with this announcement it will be left with around 200 arcades.
Over the past decade arcades have been steadily going out of business with arcade managers blaming the migration of users to home console gaming. In the past arcades provided graphics, sound and effects that could not replicated at home but with the latest consoles such as the PlayStation 3, Xbox 360 and the Wii, this benefit no longer exists.
Software makers are starting to abandon their interest in producing new machines or new arcades. Sega have also said that they will cut around 560 jobs and will reduce its R&D budget by 20 per cent.
Many arcade management companies including Taito are planning their first price hike since they opened their doors in the 1970s. A single game will rise from Y100 to Y120. Namco Bandai, Sega’s main domestic rival has also announced plans to close around 20 per cent of its arcades saying the games machines are not taking enough Y100 coins to pay the rent in prime locations such as railway stations.
More about Sega sammy, Japan, Namco bandai, Out run, Space invaders
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