Bandai Namco Withdraws From Amusement Facilities Business in N. America
posted on by Alex Mateo
Bandai Namco Holdings announced on Monday that it will withdraw from the amusement facilities business — specifically owning and operating arcades and similar entertainment centers — in North America. The company's board of directors decided on February 19 that it would transfer the businesses and related fixed assets of 34 directly owned locations, one large directly owned location, and 760 revenue-shared locations to three companies on March 31, the end of the fiscal year. Bandai Namco did not name the three companies, but it stated that the companies have no capital, personal or transactional relationship with the Company and are not related parties. The company concluded an agreement with business buyers on Saturday.
Bandai Namco Holdings cites the spread of the new coronavirus disease (COVID-19) that led to the closure of amusement facilities. As a result, the company is reporting losses of approximately 13 billion yen (about US$122 million) for the end of the fiscal year ending March 31, and it has had to take measures to reduce fixed costs and streamline operations. Bandai Namco Group had been focusing on business development that utilized its intellectual property, with the goal of rebuilding a strong business foundation under a unified framework. After examining the amusement facilities business in North America, the company decided to withdrawal and transfer, since it expects that the difficult business environment would continue, and that achieving synergy with its other businesses would be hard.
Bandai Namco Amusement America will still sell arcade games in North America. After the business transfer, Namco USA, which had handled the group's amusement facilities since July 1990, will merge with Bandai Namco Amusement America during the next fiscal year ending on March 31, 2022.
Bandai Namco Holdings confirmed in early February that it will merge its business units together in April. The company plans to reorganize its five business units into three units to "strengthen its IP Axis Strategy in the global market." It will combine its Toys and Hobby Unit (for physical products) and Network Entertainment Unit (for digital content), and it will also combine its Visual and Music Production Unit and IP Creation Unit. The company planned for its Real Entertainment Unit to remain its own unit.
Global Entertainment Network for Dreams and Aspirations (GENDA) acquired 85.1% of shares of arcade and amusement center company Sega Entertainment on December 30. Sega Sammy withdrew from the domestic arcade management business as a result of GENDA's acquisition.
Disclosure: Bandai Namco Rights Marketing, Inc., a wholly owned subsidiary of Bandai Namco Holdings Inc., is a non-controlling, minority shareholder in Anime News Network Inc.