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After Over Half a Century, SEGA is Leaving Arcades Behind.

It’s no secret that the arcade business has been dying a relatively slow death in North America since the mid-’90s, both literally and figuratively. As new philosophies in game design have emerged and the global pandemic lingers, it’s a business model that is struggling to survive even where it has (miraculously) managed to thrive for the past decade. This week marks the end of the line for Sega’s stake in the arcade industry.

A statement released on January 28 confirms that Sega is in the process of selling off the remainder of its arcade shares to a company known as GENDA GiGO Entertainment. Moving forward, the Sega arcade centers are rebranded in Japan under the GiGO name. The decision is not to say that the giant’s presence in the arcade scene will be wholly diminished. Sega will continue to produce arcade games and support GiGO. They simply won’t be having any centers to their name, and, as their priorities have shifted, the company’s output on this front will most likely wane.

Sega’s success in the arcades played a large part in their evental success with the home console market. Early software and marketing efforts for the beloved Sega Genesis emphasized putting the arcade experience in your living room. This 1989 commercial shows off a number arcade ports, including Altered Beast and Ghouls n Ghosts.

Although it comes as no surprise and does not mean the (complete) end of Sega’s arcade saga, it’s still a historical moment when one understands just what the arcades did for Sega. Before Sonic became the face of the company, Sega’s coin-op output is what put them on the map in North America following the success of such classics as OutrunAltered Beast, and Space Harrier, among others.

When the Sega Genesis rolled out, its marketing focused on the theme of “bringing the arcade experience home” from the very beginning. Although even most of the retro gaming community considers it as a title that has aged poorly, there is no denying that the Genesis port of Altered Beast (included as a pack-in) was an eye-opener in 1989. Juxtaposed with the aging Nintendo Entertainment System, this was the public’s first glimpse into the world of nearly perfect arcade conversions, and it was enough to put Sega on the map in a market they weren’t doing too hot with prior.

Sega’s role in arcades may be history at this point, but that role has left one hell of a legacy to reflect upon. I believe the Sega we know today would not exist had it not been for their humble coin-op roots.

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