Sega's new plan for arcades

(Thanks to everyone who sent this in!)

When you run a company, you need a plan if you want to succeed in that business. Some corporations are more open about their plans in public than others and when it comes to the arcade industry, most companies are tight-lipped about what they intend on doing. Every company in the industry should be interested in seeing arcades expand and grow and when it comes to that, Sega has a plan for doing their part to revitalize the business as we read in an article from Siliconera.

Now the article does start out with a slightly false premise by suggesting that “arcade business is down, way down”. I guess it depends on what era you are comparing it too but really, my own arcade business is doing great at the moment and I know of others who also are seeing good business this year, even though many other industries are having a tough time. Couple that with many new releases that have come along this year and will come along in the next as well as new companies joining the fray, I think that it’s safe to say that we’re not on the brink of collapse. But it sure would be nice to see earnings like we have in certain past ages and the arcade sector does need some help, especially since the premise in the minds of many is that the industry is dead as a doornail.

So what is Sega’s plan for dealing with the challenges that we face? They break it down into four parts:

-Promote revenue sharing with operators that includes connectivity through Sega’s ALL.NET service to connect player communities together

-Make use of standardized cabinets so content can be replaced quickly and cheaply (this is something we have discussed before on the forums)

-Effectively promote their new Ringedge and Ringwide hardware to reduce costs (and BTW certain fanboys – no mention of using Ringwide as a home console)

-Diversify their product line-up to attract more players to amusement centers

I personally think that these are all great ideas that should see widespread adoption, and to elaborate further on what I think about it, continue reading by hitting the link below

Thoughts on revenue sharing:

This has been tried before but as far as I know, it has not been attempted extensively in modern times. More companies in Japan are testing the idea recently and now that will include Sega. From an operator perspective, it would be much easier to update content at my arcade by following this model and it’s very enticing because it can be more than difficult to come up with anywhere between $7000-$14,000+ for one game.

Thoughts on standardized cabinets:

This isn’t a new idea and it still exists to a degree in the US with the idea gaining new traction in recent times.  Obviously there is a desire to see custom artwork and molds for your cabinets but as long as the cabinet is modular and would allow for an easy exchange of such things, I have to imagine that it would help drive costs down overall since companies wouldn’t have to create completely different cabinet designs for every game. We already do see this used to an extent in the industry – most racing cabinets are the same and most companies seem to have settled with a particular design that they call their own (Incredible Technologies pedestal cabinets have been gaining popularity amongst non-IT companies including Sega and GlobalVR; GlobalVR’s racing cabinets also come to mind) and it seems to have brought costs down for those manufacturers, thus making it easier to obtain the games in the first place. Whether Sega will settle with a design that is already in widespread use here in the US or in Japan we will have to wait and see but chances are we’ll know about it soon into 2010.

Thoughts on hardware:

This is a bit of a no-brainer here – there is a good reason why all arcade manfacturers use PCs to power arcade titles these days, because you can build something that will work for several games for cheap, it’s easy to replace the parts and a lot of development happens on the PC to begin with so it’s a natural fit. Japanese companies do a much better job at hyping their hardware platforms for use in their games than US firms do (and sometimes it causes players to think things out erroneously, like in the case with Ringwide) but the only real change I would like to see here is for companies to not install specialized BIOSes on things like their graphics cards so operators can’t get an off-of-the-shelf solution for cheap. As a prime example, ask an operator how much it costs to replace the nVidia 6800 card in the Lindbergh system. Last I checked it was $900 to replace from the company because of this particular practice, despite the fact that the card itself is worth well below $100.

Thoughts on diversifying product line-ups:

This is another thing that we have harped on before (see our “Missing in Action” editorials from 2008) and still harp on today because if there is one thing you get a little tired of seeing, it’s a new racer coming out on to the market.  Now racers invite casual players in to play quite well and they earn great too but there is such a thing as too many racers out on the market. Seeing more than racers and light-gun games in arcades is something I am behind 110% and we have already seen Sega go in this direction with titles like Sega Card Gen and Giant Tetris. With the focus on attracting casual players, that sounds like the “party game” is prime for a comeback to arcades (in fact Namco is branding Tank! Tank! Tank! as a party game) and Giant Tetris is a good step in that direction for Sega.