It’s not been a great fiscal year for game companies with interests in arcades, and it’s been no different for Bandai Namco. With the pandemic putting pressure on many industries that rely on getting people inside their buildings to make money, the arcade business in particular has taken a beating over the last year, and it seems Bandai Namco is prepared to cut its losses and withdraw from its North American arcade market altogether.
It’s far from the only company to have witnessed a dip in its arcade business. Some managed to claw their way back to profitability by the end of the financial year, as in the case of Square Enix. Bandai Namco, however, seems to be taking a more pessimistic view of its chances, and recently decided to withdraw from its arcade business in North America and transfer ownership of it to three other companies.
In a press release dated March 1st, the company laid out its plans. Having reported extraordinary losses in the region of 13 billion yen (around $122 million) as a cost of its move to restructure the company and with the “difficult market environment” created by the pandemic expected to continue, the company decided to withdraw from its Amusement Facilities Business in North America. The press release also cited the difficulties in “achieving cooperation between each business” as a reason for the decision, but made clear that Bandai Namco would continue to make and sell arcade games in North America, even if it wouldn’t directly control or run any actual arcades.
All in all the withdrawal, set to take place on March 31st, will see the 35 directly-owned stores and 760 revenue-shared locations currently owned by Namco USA Inc. transferred to three other companies in the arcade business. It’s currently unknown who the companies in question are, but the press release makes clear that none of them have “any capital, personal or transactional relationship with the company,” so it seems unlikely that Bandai Namco is attempting to keep the assets in the family through any legal skullduggery. Once the transfer is finished, Namco USA Inc. will be merged with Bandai Namco Amusement America Inc. over the course of the next fiscal year.
The pandemic has certainly hit the company hard over the last year, though it may not be the only reason Bandai Namco is rethinking some of its strategies. The company found itself in hot water earlier this year, along with five other companies, after falling afoul of the European Commission for breaching anti-trust rules. Though it got away with the smallest fine of the group at €340,000, the ruling may well have shaken things up a little at the company.
In any case, this will certainly be a blow to fans of the arcade, and it’s difficult to say how the industry will look once the world manages to get past the pandemic. Avid arcade-goers can hopefully take solace in the knowledge that even in their current situation, Bandai Namco is still committed to making arcade games, even if it won’t be running any stores of its own.
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