Game centers fight uphill battle

BY TAKASHI KAMIGURI, AND SHINGO TAKANO

THE ASAHI SHIMBUN

The success of Nintendo Co.'s Wii and other home videogame consoles may eventually mean game over for operators of arcades.

A looming economic slowdown is stealing away even more customers.

Sega Corp., the market leader for videogame arcades, said since last year 110 outlets had closed or would do so by the end of 2008.

Namco Ltd., the second-largest player, will close about 60 outlets in the same period.

Most of Namco's closed or closing outlets are small and mid-size arcades. In one of Namco's arcades in a shopping district in Osaka's Kita Ward on one recent weekday afternoon, only four men were playing videogames.

"Many have told us that they cannot afford to play because they cannot find a part-time job," said a clerk at the outlet.

"It is getting harder for us to make smaller outlets profitable," said Hitoshi Yamagata, a spokesman with Namco.

"We find it hard to make additional investments (in these outlets)."

A majority of patrons who used to shore up these small outlets are those in their 20s and 30s who could not land regular jobs after the country's asset-inflated economic bubble collapsed in the early 1990s, according to industry analysts.

"The number of customers in small outlets has been sharply dropping since late last year, when many economists started voicing anxiety over economic prospects," said an executive with a leading videogame company.

Instead, many leading operators are focusing their resources on opening large outlets, with a floor space of 1,500 square meters or more, in large shopping complexes.

One reason for them to add spacious game arcades in shopping complexes is that many popular attractions, including a horse racing game, are growing in size.

And the atmosphere of most of these arcades is family-friendly.

But the new large outlets are not faring well, either.

Sales at Sega's amusement facilities dropped 11 percent in the April-December period in 2007 from the same period in the previous year. The figures compare sales at the same outlets that were operating during the two surveys.

Capcom Co., which specializes in large-size videogame arcades, reported a drop of 13 percent.

A major contributor to a slump in these videogame arcades, analysts said, is Nintendo's Wii home console that has proved a huge hit since it went on sale in late 2006.

"Wii took away many game players, except for hard-core fans, because it allows them to experience bodily sensations while playing," said Koichiro Ueda, head of Sega's public relations department.

Namco said that it is considering developing arcade games that can be played using data from a customer's Wii at home. (IHT/Asahi: March 19,2008)