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The end of an era: After 56 years, SEGA officially out of the arcade business

It’s game over for the Sonic maker’s coin operated division.

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Long before a speedy blue fella named Sonic raced onto the scene, SEGA was already claiming quarters and tokens at a rate that would make even a ring-greedy hedgehog blush. As one of the original titans of the Japanese arcade gaming culture that flourished in the 1970s, SEGA and its stable of arcade classics eventually became global sensations, making U.S. household names of self-published '80s greats like sci-fi shooter Zaxxon and track-day racer Turbo.

Now, after a remarkable 56 years maintaining a coin-operated gaming presence from its native Japan, SEGA is reportedly getting out of the arcade business for good. Eurogamer reports that the company — which is still going strong worldwide as a developer and publisher of console mega-franchises — is pulling out of the Japanese parlor gaming market, selling all of its remaining arcades to another company.

Via Eurogamer's report, SEGA has sold the remaining shares of its arcade business to Genda Inc., which will rebrand all of the Japanese arcades picked up in the acquisition under its GiGO brand banner. The crowd-curbing effects of the COVID-19 pandemic already had prompted SEGA to sell 85 percent of its arcade shares to the same company in late 2020. The persistence of the pandemic through new variants, combined with the ongoing global demographic shift toward home-based gaming, reportedly compelled the company to finally offload the small remainder of its arcade shares.

SEGA had been in the arcade business for so long that its first games weren’t even what we typically think of as straightforward video games. Rather, early SEGA hits like Periscope (1968) were hybrids — games that combined electronics with mechanical features already familiar to anyone who’d used a joystick to operate a toy-grabbing claw or tilted the table in pinball.

As the electronics industry refined arcade gaming boards in the '70s and '80s, however, SEGA took advantage as both a developer and publisher of more contemporary electronic arcade games, leading eventually to its entry in the home console market with the SG-1000 in 1983.

Even though SEGA stopped making consoles with the 2001 demise of its iconic Dreamcast, its games division has only blossomed in the past two decades. In addition to a Sonic renaissance that’s spawned a major movie hit (and an upcoming sequel), the company maintains a sizable present-day video game franchise lineup that also includes SEGA-published hits like Bayonetta, Shenmue, Valkyria Chronicles, and Yakuza.

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