The news cycle for the past few months has been a cycle of closures, indefinite closures, re-openings, & re-closures. It’s been a little hard to track it all, since every industry has been affected in one way or another. For the arcade side, I’ve detailed plenty of that, although we still have plenty of extremes, from We’re All DoomedTM to Everything Is Fine® (not much of the latter though). I think that most are somewhere in-between.
One company that had ceased operations was the Western side of Sega Amusements, their arcade division. Apart from some basic warehouse things (as I did receive a Hot Racers machine that shipped directly from their Illinois warehouse), they have been shut down since March, which has also affected the development of new games. Sega Japan’s operations are a little bit different, so the length of their lock downs have been dependent more on the situation in Japan.
One thing up in the air was Mission: Impossible Arcade. Shown at Amusement Expo 2020 as a final build, this was a big game for the company to launch, but it showed up ready just a couple of days before lockdowns began to spread like wildfire across the US. I have confirmed with the main US sales rep at the company that the game did not ship, and it has been officially delayed until November. I did capture some footage of it that you can watch here:
Apart from that, their other previously released games like ATV Slam, House of the Dead Scarlet Dawn, Daytona Championship USA, Luigi’s Mansion Arcade and others will be shipping, but given the circumstances, I wouldn’t expect much in the realm of new-new from them at IAAPA 2020 (apart from anything unannounced that was close to finished – there is one piece that I had expected to see at Amusement Expo, but I think they wisely held off on revealing it since they saw what was coming).
The Sega press release is below, but let me veer off into some thoughts first…
On a related, but more generalized note, I was asked by an operator yesterday who I think will survive all of this on the manufacturer and distributor side. It’s a tough question since no one really knows what is going to happen, but our industry as it is has specific connections – Developers/Manufacturers -> Distributors -> Operators -> Players. The more ops that close permanently leaves a smaller purchase base for distributors, which in turn affects how many products that they and manufacturers can sell. I know that pretty much every distributor has scaled back to cope, and I’ve heard about both temporary and permanent lay-offs. For manufacturers, everyone I’ve talked to so far has said that they were prepared for rainy times, but if a huge chunk of the operator base evaporates, that’s going to negatively affect things no matter how you slice it.
Most operators I’ve talked, and looking at my own earnings, have found that operations are about 30% of where we were this time last year. June was better for me, making about twice as much as I did in May, but was still down about 50% from where I was in June last year. While I have received a loan from the SBA for equipment, I’ve been mainly paying off existing debt – then I will be purchasing a Family Guy Bowling that has become available, as another op I work with had a location get rid of all of their amusements. The glut of used games slamming the market has already been going on since March, and it’s going to stick around for a while, which will also affect new products. “Why buy new when you can get slightly used at a great price?”
On the bright side, I think there’s still hope – from my view, the manufacturers that will come out of this best are the ones who shift their focus from creating giant & expensive FEC pieces to creating stuff for street operators – games that fall into the $2000-6000 range. Whether that is a pared down version of a deluxe game (say a 1p or 2p model of a 4p game, or a traditional up-right version of something instead of the $12-16k environmental cabs) or game upgrade kits, that is better than just trying to sell a handful of Super Deluxe games that fall into the $30k space.
We have no lack of “cabinet wood” in this industry as ops call it. Operators still junk cabinets that they can’t even give away for free (the op I was talking to yesterday had thrown out 7 working CRT tubes last week). Kits should be particularly viable now, even though all major manufacturers tend to despise them, as profit margins are much lower than dedicated cabs. The question then becomes: Would most ops jump on a reasonably priced update kit for something like Jurassic Park or Transformers: Human Alliance? Would they go for a standard upright on Scarlet Dawn? Or something new to convert out an existing gun or driver game? I think they would in a heartbeat. Just as long as it’s quality and isn’t $5000 for a single level 😉 There is also the Exa-Arcadia on the market right now, the only kit bringing a lot of content to the scene. Despite the shutdowns, they’ve got more stuff on the way, which puts them in a great position.
Anyways, sorry for the tangent, here’s Sega’s re-opening press release:
LET’S GO: SEGA REOPENS
Now that lockdown is being eased around the world, SEGA Amusements International is here for you. We are now open and can assist you with technical support, provide critical spares and ship games to help get your business up and running again. We have been working hard the past few weeks, implementing robust Health and Safety procedures and social distancing to ensure that we can deliver products and services to you safely, while protecting our staff.
All of us here at SEGA are proud to be part of this amazingly creative and resilient industry. We are incredibly grateful for all the support we have received from customers, industry associations, partners, suppliers, and competitors over the past few months. Despite our industry being hit the hardest, it is clear by working together we are all growing stronger than ever before.
We hope things get back to normal around the world soon so we can see you in person again. In the meantime, we look forward to meeting you online to discuss how we can get you through this challenging time.
We are here to help you.
From the entire Team at SEGA,
PS: Here is a handy list of contact to make things easy.
For Europe, Africa, Asia, and Australia:
Technical Support – email@example.com +44 (0) 208 391 8060 (Option 2)
Spares and Prizes – firstname.lastname@example.org +44 (0) 208 391 8060
Game Sales – email@example.com +44 (0) 208 391 8090
For North and South America
Technical Support – firstname.lastname@example.org +1 224 265 4283
Spare Parts – email@example.com +1 847 364 9787
Game Sales – firstname.lastname@example.org +1 847 364 9787