Sega executives have cited the Corona pandemic as one major reason for the loss of profit. Image sourced from https://japandeluxetours.com/.

The Effects of Corona on Japan’s Arcades

Sega Sammy Holdings, formed by a merger of Sega and Sammy back in 2004, seems to be struggling in the world of Covid after having recently announced that they will be selling off most of their stock for Sega Entertainment. This unfortunately includes almost all of Sega’s Japanese arcade businesses. Sega has said their reasoning for the sale came from a massive drop in earnings due to the Corona Virus. Over 85% has been bought by the company Genda. 

To make matters worse, the company is now calling for a forced retirement for over 650 of their employees by February 28th, 2021. The top executives of the company will also be seeing salary cuts. Sega Sammy’s Representative Director’s monthly salary will be cut by 30%, and the Senior Executive Vice President and Senior Vice President will both receive a 20% and 10% cut to their salary respectively. 

While trying to handle the effects of Corona, the company has stated that, “we have established a Structural Reform Committee to reform our organization structure to adapt to the external environment…” The company is projecting approximately 10 billion Yen in total losses come March of 2021.

On the other hand, competitor Nintendo is seeing a record year for overall sales and profit. According to Nintendo’s quarterly financial statement that was released back in August, net sales increased by 108.1% with a total of 358.1 billion yen. Nintendo’s operating income was reported at 150.3 billion yen, a whopping 576.2% increase. Nintendo actually owes much of its recent sales to the Corona pandemic. Time spent indoors has risen significantly and led to increased sales of the Nintendo Switch.