Video arcades are a dwindling business in Japan. Since the peak of the market in 2006, the number of arcades and scale of individual arcades has been dropping steadily. Kiyoshi Kameyama, the owner of the Amnet Gotannda arcade described the current video arcade climate in an interview with website Online Player EX.
Arcades used to be the place to go to for cutting edge high quality games. Now many have now been reduced to "sneak preview"-esque places where people can play popular video games that will eventually be released on home consoles. Every time a game is ported to the console, arcades feel the impact in their sales as players stop playing in droves when the option of playing at home is made possible. Arcades are forced to scramble and come up with ways to retain players by adjusting prices and getting newer games and beginning the same cycle anew. This climate has made video arcades more of a convenience than a necessity for gamers. "There was a video arcade in the same area as our Gotannda store that closed." Kameyama said. "You might think that the customers that used to go there, started coming to our store and our sales numbers went up, but that wasn't the case. It seems that by losing their local arcade, those customers just stopped going to arcades altogether."
While the introduction of network games has also led to further headaches for owners of arcades. Where once they would buy expensive game machines and, whether they made money or not, the transaction was done with, now with network games, they must constantly pay connection fees to the developers. Sometimes up to 50% of their income for certain machines go to the makers, further cutting into their sales. "Our store has to pay individual game makers in the millions of yen every month for our connection fee alone." Kameyama explained. Though on the plus side, this percentage payment method can motivate developers to make better games, as the profits of the arcade will more directly influence the profits of the developers.
The 2011 earthquake, tsunami and subsequent nuclear disaster have also taken their toll on arcades. The power problem has forced arcades to find ways to conserve energy, like switching to LED lights or shutting off certain machines at different times of the day. And with an increase in the cost of electricity and tax rates, many arcades may no longer be able to make the profits to stay open. "It's probably going to get harder for stores to stay in business." Kameyama said. "If the cost of electricity gets even higher, I wouldn't be surprised if arcades that already are on the edge are forced to close."
For a business owner, usually one must prepare for things 5 or even 10 years down the line. But for many Japanese video arcades like Kameyama, it's become almost a daily struggle to survive. With the technological advances of the home console drawing players away and increasing costs to maintain, not to mention the slowly decreasing population, it may not be long before the arcades of Japan follow the arcades of the US into obsolescence.
現役ゲームセンター店長が語るアーケードゲームビジネスの実態 [Online Player EX]