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Japan's arcades hit hard times

Is Nintendo to blame for Japan's current arcade crisis?
Is Nintendo to blame for Japan's current arcade crisis?

Japan’s once-booming arcade sector is hitting hard times, with numerous arcade closures being blamed on Nintendo’s hugely popular Wii console.

Sega Sammy Holdings Inc plans to close 110 arcades and Namco Bandai Holdings is set to close between 50 and 60 of its outlets this year.

"Arcades are expensive, noisy and filled with cigarette smoke," 15-year-old gamer Gene Sato, told Reuters, adding, "besides, I can stay home and play NBA Live on PlayStation 3."

Nintendo to blame?

"It’s pretty clear that Nintendo has been the leader in innovation," said Jay Defibaugh, an analyst at Credit Suisse.

Jun Higashi, president of Namco Bandai's Namco, said at Tokyo’s annual arcade expo back in February that arcade companies, “need to innovate, especially in the realm of games where people move their bodies,” adding also that there is a need to, "develop games that can't be played at home."

Whether this current downturn in Japan’s arcade fortunes is cyclical and a result of the latest generation in the home console cycle remains to be seen.