Japanese arcade owners GENDA are now poised to become a major player in the US market, as they are set to acquire one of the largest arcade operation networks in the USA. Let’s dive into this news and how it might affect the scene across the country.
Who is GENDA & NEN?
GENDA (“Global Entertainment Network for Dreams and Aspiration”) was originally established in Japan back in 2018, and first became noticed around the world when they acquired Sega’s arcade locations over there at the end of 2020. They then changed the name of all Sega centers there to the GiGO brand, following the closure of the famous Sega Ikebukuro GiGO location, and have been pretty busy ever since. GENDA have now got their fingers in many pies through their aggressive M&A approach, whether by buying up production companies, beginning to bring in exclusive new games, or starting to move into the West. This is all tied into their ambitious mission to “become the world’s No. 1 entertainment company”.
NEN (National Entertainment Network), meanwhile, has been around since the 1980s, mainly being involved in route operations across various US states – they would be the only ones I could think of that handle revenue share deals just about anywhere. Many of their locations currently include Walmart game rooms, alongside some standard arcades picked up from being one of the buyers of Namco USA’s back in 2021 (GENDA ironically enough were another). Altogether they are responsible for thousands of sites; as you’ll see below, that number is about 8,000 when including these game rooms. Odd for an industry that’s as “dead as Blockbuster Video” if I am to believe some people who comment on certain videos…
GENDA To Acquire NEN
After establishing themselves as a dominant player in Japanese game center operations and getting their start Stateside with the Kiddleton facilties and Enterrium, now GENDA is setting their sights on the US more than ever before by acquiring NEN.
Genda is set to acquire National Entertainment Network, which operates game kiosks inside roughly 8,000 retailers and restaurants, including Walmart stores and Denny’s restaurants. The acquisition for an estimated millions of dollars, will expand the buyer’s American presence by a factor of 20.
As per that article, both GENDA and Round1USA are making a strong push in the wake of anime’s rising popularity in the US, by featuring more cranes, and more anime-themed prizes inside of those machines. Such a trend has been present in Japan, China and other Eastern markets for some years now, with bigger numbers of locations becoming little more than crane machine facilities. And as reported on in the most recent Location Watch, we’re starting to see types of these pop-up out here too.
What Will This Mean For The American Arcade Scene?
The FEC scene has been growing a ton over the past decade, which has in turn influenced game development to cater more towards those needs and demands. Route or “street” operations have still existed in far greater numbers, but they don’t tend to purchase as much new stuff as an FEC does, so they’ve been left to the wayside.
Cranes have consistently been a high-earning, solid performer that usually don’t break the budget (although there is an exception to that below). They’ve done really well at FECs, particularly when you have those giant cranes that are 14′ tall and feature giant prizes. Round1 has already shown how the Japanese model for cranes can work here, so none of this is a real surprise. It is interesting though, in how this seems to be an evolution of ticket redemption – just cut out the ticket middleman and go straight for the prize.
Of course, as a gamer/consumer I’m not really interested in cranes, but as an operator I certainly see the value they have, since most consumers don’t agree with me. Will cranes end up replacing video completely across the whole board? I don’t think so… but I do expect other FECs and locations to follow suit and perhaps increase their investments into cranes. Dave & Busters, for example, haven’t been installing many of late, and those they do often only offer ticket rings anyway. That could easily change though.
While this may similarly mean diminished interest in developing video among some, I do hope that this drives the creators of said entertainment to figure out new ways to innovate that don’t require the machines to cost $50,000, whilst still increasing their earning power.
For this particular GENDA situation, perhaps they will bring the GiGO brand here, although a lot of the locations that NEN has aren’t really branded in any separate way from the location they are found in. But I could see GENDA making that unified branding push. And even with their focus clearly being cranes, rhythm gamers in particular will also be interested to see if they cut deals with the likes of Konami to bring their games over and compete with R1USA on that front too. I’m sure we’ll find out more soon enough.
What do you think about this news? Would you like to see GENDA open GiGO locations in the USA off their back of the NEN operations base?
