We’ve got some “inside baseball” news for the industry today, but it is an interesting development from both the distribution and operations sides of things – let’s discuss GENDA’s latest moves into the US as they acquire Player One Amusement Group (also known as P1AG).
Also as a note – we’ve made some backend changes to the site here, which had kept us from posting, but now the site should be running silky smooth for a change. There may still be a couple of hiccups here and there, but overall that should be resolved.
Who’s Who?
For some quick background on who the players are, so that this makes sense in the event that you have no idea who these companies are.
Player One Amusement Group is both an amusement equipment distributor and a route/location operator based in Toronto, Canada. As they state on their website, the “group” part of their name is how they are the merger of six companies, all with experience in different aspects of amusement – their past owners have included Cineplex, and now OpenGate Captial, who only acquired them not that long ago in late 2023. They tend to have a booth at trade shows, so anyone in the industry (particularly out in North America) for a time would be familiar with them. Last year’s IAAPA saw Hulk Hogan and some other celebrity wrestlers/fighters to promote their new prize merchandizers, for example:
GENDA meanwhile is a Japanese entertainment corporation who really gained attention back in 2021 when they acquired Sega’s Japanese arcade location operations (those locations being rebranded as GiGO, following the closure of the famous original Sega Ikebukuro GiGO a few months earlier). They’ve had their sights set on the US arcade market since the Sega Entertainment acquisition too, first with Pac-Man Entertainment and more recently with NEN. Their company history is almost a laundry list of buyouts, encompassing non-amusement ventures as vast as karaoke, lemonade stands and movie distribution, so today’s news is not exactly a shock. I would also note that they have been making some tentative moves into making their own games, though up to now has only gone as far as a video boxer and crane using OEM cabinets.
Player One Amusement Group Is Now A Part Of GENDA
Player One Amusement Group is GENDA’s latest acquisition, which expands GENDA’s reach into both Canada & the US. Per this tweet, it brings “104 game centers and 2,000 mini locations” across both countries under GENDA’s wing, and they expect sales in North America to reach “44 billion yen(about $303 million USD if I used an accurate currency calculator)” this year.
The CEO of GENDA elaborated further (translation is from X)
In response to the current US tariff issue. First of all, we believe that the current environment is a great tailwind for GENDA, which has M&A as its growth strategy. As the valuations of potential M&A targets fall, we believe that we will have more and more good opportunities in the future. We will continue to select better deals from our abundant pipeline and achieve continuous, non-linear growth. In terms of the short-term P&L impact, assuming that tariffs from China to the US rise to 104%, we estimate that if we do nothing, there will be a negative impact of 360 million yen (3.4% compared to the plan for this fiscal year) on operating income. However, we are not going to do nothing, and will implement a number of measures to reduce the amount of the negative impact, such as producing game consoles in the US using the factory functions of our US group company NEN and procuring from countries other than China where tariffs are relatively low.…
This last bit is particularly interesting, in that their NEN acquisition from last year now comes into play at allowing them to build equipment into the US. I’m not sure what the total factory capacity is for NEN (I thought they were entirely a location operator before reading this), and assume “game consoles” is to mean things like crane machines. Either way, they are actively investing here, so whereever NEN has a factory, that would likely mean more local jobs to the area. It certainly doesn’t sound like GENDA is going to be laying people off at P1AG, as you often see happen with takeovers.
I also like seeing someone like GENDA taking the initiative and instead of just shrugging or panicking, they’re taking actions that will help their operating costs and profitability. I’ve been advising that for anyone in a panic so far – costs have been steadily going up since 2020, so continuing to take measures that follow those lines, or coming up with creative new ways to address the latest changes is what you have to do to keep things going.
As a quick aside, both last month and this have been great for my arcade business, but I don’t have a redemption desk so I don’t have to worry about shipping in new toys. What a benefit to running “just” an arcade, I guess
What will this mean aside from that for the industry? Likely more sales of equipment, including GENDA-made products/games, and more locations where you’ll find those games, in the long run. Short term, I doubt much will change for P1AG’s current customers. It would be interesting if this also saw an increase in equipment available from Japan through them, although I don’t know if any of that has occurred after they acquired NEN. All-in-all, I don’t see the downside here, so for those looking for good news, here’s something.
What do you think of this major acquisition by GENDA?
