UPDATE: I’m seeing a lot of bad reporting out there so I am updating this post to present the facts to those who don’t mind taking an extra moment to research.
The Sega name is not completely disappearing from arcades, as many outlets are either reporting or implying.
Before November 2020, there were two major divisions within Sega Japan who were responsible for handling arcades:
- Their game development and manufacturing departments. Think of groups like AM1 or AM2 in the past.
- Their arcade operations department. It was these locations that carried the SEGA name on the buildings that people could visit, excepting their Joypolis theme parks (which would be a division #3)
It is slightly more complicated than that, but that should suffice for what we’re talking about now. Post-pandemic, Sega sold #2 off to a company called GENDA in November 2020. At the time, GENDA purchased 85% of the shares and took over site operations. They were the company who closed down some high profile sites, while opening some new locations. #1 was also affected but more through internal downsizing; They still maintain a staff and develop content/offer support. One example is with their APM3 platform. You also had the Western side of Sega Amusements moving forward with what was called a “Management Buy Out;” That part of the company is selling new Sega-branded arcade games right now, and others are in development – recall that Mission: Impossible Arcade DX just started shipping a few weeks ago, and they have others like VRAgent shipping by March.
Today, it was revealed that Genda completed their purchase of the Operations division, purchasing the remaining 15% of shares. As a part of that, they changed the name of their company to GENDA GiGO Entertainment and will remove the SEGA name from those buildings in Japan (with one exception I’ll mention below). GiGO stands for “Get into the Gaming Oasis.” I recall hearing that name associated with Sega in the past, such as with the Sega Gigo Ikebukuro location. Here’s a translation of the announcement that was posted on Twitter:
Unfortunately, a lot of mainstream sites are reporting it as “SEGA LEAVING THE ARCADE BUSINESS! DOOOOM!” That’s just not accurate. Sega still maintains a small development division in Japan, supporting their releases like InitialD, Chunithm, and All.Net Pras Multi, better known as APM3. Also as mentioned above, you still have Sega Amusements who will continue to put out new arcade games with the iconic Sega name.
Note that this will also not affect Sega Joypolis theme parks, as GENDA did not purchase those in the deal; As I have learned recently, Sega has sold part of their ownership in Joypolis to Chinese-owned entities, but as you can see in the video below, they still own enough where the Sega name still graces those buildings. Those are considered to be theme parks; I think that the Genda news might also be why Joypolis just put this promo video out on the 27th:
UPDATE: 1/29 – Another interesting item popped up on Twitter through am-net last night. They stated that Sega may get back into arcade operations (like the ones that were sold to Genda) in the future. How this might work out remains to be seen, but it’s still worth noting.
I know this will hurt Sega fans, but unfortunately this is how it goes as the business landscape changes. I also assumed that this would happen eventually. Granted, usually some remnant of the name remains when you have buyouts or mergers, such as when it became Sammy Sega, or over at Namco becoming Bandai Namco. But that isn’t always the case historically either – as an Atari fan, it always pained me to see games from that brief time where they removed the Atari logo and name completely and called it “Midway Games West.” But, when the people in charge are all different and they want to move forward establishing their new corporate identity, it’s understandable.
Since there weren’t any Sega owned arcades in North America, this is something that only affects Japan, but we should keep in mind that GENDA does own a few locations here in the US. Whether or not those will begin to carry the GiGO name remains to be seen.
What do you think about this announcement and change?
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Thanks for clearing that up. SEGA has always had a special place in many gamers hearts so now that I know the real situation it makes a lot more sense and as such not exactly the end of an era.
Sega is a weird company, a bit edgy too with a futuristic right lean outlook but very weird – that’s what I’ve always loved about them, and it really needs to have its place and name maintained in this industry.
It’s not like SNK, their brand name is too powerful to just offload by some new management company, because the name also represents a culture by that point. The founder of SNK also understood this and knew the feelings of SNK fans after the news of SNKs position.
I remember when SNK went under around 1999/2000 (I think), the founder then set up a new company called Playmore to then purchase the remains and for a few years Playmore rebranded as SNK Playmore, then they released the Neo Geo X around 2012, but ultimately the Playmore brand was all done simply to rebuild SNK, once that process was completed, SNK Playmore was rebranded again to just SNK around 2016.
Though weirdly by 2020, the MiSK Foundation, a non-profit organization owned by the crown prince of Saudi Arabia, Mohammed Bin Salman, acquired a 33.3% share of SNK through its subsidiary, Electronic Game Development Company (EGDC), with the intention to acquire a further 17.7% share at a later time as to gain controlling interest in the company. The deal has closed on March 1, 2021.
But they mean so much more than just brand names, there’s elements of culture and heritage with them that can’t simply just be cast aside by conglomerates. This is one of the reasons why FTC exists.