Commentary

Amusement restructurings spell change beyond Japan's shores

Financial pressures on major amusement machine players have resulted in plans to sell off certain properties, as well as new partnerships and opportunities.

Image courtesy of iStock.

March 22, 2021 by Kevin Williams

Changes in the Japanese amusement scene are impacting games far from its own shores.

Following on from January's Sega restructuring, Bandai Namco Holding's financial report for the third quarter revealed the company would be undertaking major restructuring across all its divisions which would take place during the period leading up to April 2021. This comes with the company having taken on series losses.

The Bandai Namco board closed the "Project i Can" virtual reality facility business, represented by the flagship "VR Zone Shinjuku," and original "VR Zone Tokyo Plaza" facility. This also saw the heavily VR-inspired "Mazaria" facility shuttered, with no official word on the fate of the remaining sites.

At the same time, the company has invested more in new brands — first with its new "VS Park" sports facility brand, with plans to open its third new facility in AEON Mall Shinrifu in March, and secondly, with the "Hugood" anime and movie IP band brand that opened its first facility in NAMJA Town, Tokyo. This is a totally new concept moving towards a non-amusement, brand IP specific flagship store.

As seen with Sega, Bandai Namco looked towards lightening the load, and this saw the axe turn on Namco USA (Namco Entertainment), the operation which handled the North American amusement facility business.

Bandai Namco America consolidation

The parent company undertook the sale of the amusement holding in North America to three buyers (yet to be announced), that will see the facility business assets passed on to these buyers, and the removal of Bandai Namco from the American amusement facility business. This will see the sale of the infamous "Pac-Man Entertainment" facility in Chicago (previously "Level 257"), as well as amusement venues dotted across the U.S., including the "Pac-Man Zone," "Time-Out" and "Cyberstation" brands (35 directly owned, and 760 revenue-shared).

After the handing off of this business for the end of March, the remaining Namco USA will be merged into Bandai Namco Amusement America (BNAA). Sources close to the developments claim this move will not impact the "VR Zone Portal" plans in the U.S. being run through BNAA.

One impact that will affect the likes of Taito, Konami and Bandai Namco is their involvement in the Sega led "ALL.Net" (Amusement Linkage Live Network) facility content and licensing infrastructure. Information on the way this system of distributed content to amusement cabinets at the corporates' respective game centers has always been a difficult web to penetrate at the best of times — especially its link to revenue sharing.

With the suspension of business under lockdown, closely followed by the acquisition of Sega Entertainment by Genda, information on how this infrastructure was going to continue to work was hard to find at the time of this writing.

Independent platform emerges

The stranglehold on new game releases for the lucrative Japanese amusement center cabinet business was a factor in the creation of the independent exA-Arcadia amusement platform. This will give the ability for connected cabinets to have an alternative delivery system, offering access to indy-arcade content, without the shackles applied through the Sega "ALL.Net P-Ras Multi," Konami e-Amusement, or equivalent Taito "Nescaxlive" channels. It is stated to be an important aspect of the exA-Arcadia system's popularity.

With the Genda Sega Entertainment situation, the status of these systems was placed in the air, with no real confirmation regarding whether Sega or Genda will be directing the system. With most Japanese arcades in lockdown, however, this may be a moot point for the time being.

Giants collaborate

A major collaborative project between Sega and Bandai Namco was announced in February, which brings together the universes of their two most popular street racing titles. It was revealed that, along with the launch of the new "Initial D The Arcade" (10th in the series), the game would include famous vehicles from the Bandai Namco Entertainment racing property, "Wangan Midnight." This is a momentous move of collaboration by the two corporations, seeing the IP from the two famous manga comix and animated series compete in the same universe — a first of its kind in the racing game genre. This unique patch to the cabinet will also see the vehicles added to the players' roster, and used in competitions on the network tournaments, starting in spring.

BNAA saw some success with the western release of its racer, with "Wangan Midnight Maximum Tune 5" in 2017 being the last support of the property. That was until January's announcement by BNAA that they would be releasing a new North American tournament, called "The 4th Nagoya Area Online Champion Match." Played on the four-year-old hardware with an updated game patch, the tournament ended just as the Japanese Sega "Initial D" crossover was about to start — though there was no acknowledgement of this release.

These moves come from a need to stay relevant for the Japanese developers who have seen popular consumer titles co-opting well-known IP into their properties. This is best illustrated by the mega-hit "Fornite" adding other game characters to their mix, recently including Capcom's "Street Fighter" stalwarts Ryu and Chun-Li. With the current impact inflecting the Japanese amusement scene, it is expected that other partnerships, as well as the offloading of less profitable divisions, will be a factor in their futures.

(Editor's note: Extracts from this blog are from recent coverage in The Stinger Report, published by KWP and its director, Kevin Williams, the leading interactive out-of-home entertainment news service covering the immersive frontier and beyond.)

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About Kevin Williams

Along with advisory positions with other entrants into the market he is founder and publisher of the Stinger Report, “a-must-read” e-zine for those working or investing in the amusement, attractions and entertainment industry. He is a prolific writer and provides regular news columns for main trade publications. He also travels the globe as a keynote speaker, moderator and panelist at numerous industry conferences and events. Author of “The Out-of-Home Immersive Entertainment Frontier: Expanding Interactive Boundaries in Leisure Facilities,” the only book on this aspect of the market, with the second edition scheduled for a 2023 release.

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