Even if pachinko is related, Sega (Samy) is also big for pachinko machine market. Arcade machine is not very profitable business but I don't know they completely shut down their business in the future or not. I just point that no more shop != no more machine.
This doesn't seem at all plausible. I can't think of a country I have been to in the world that didn't have Sega arcade machines. I'd be shocked if simply manufacturing and selling the machines wasn't more lucrative.
The problem is arcade machines are just a TINY markey. The best selling game of the '90s was Street Fighter 2: CE, and that sold a grand total of 140k units.
Most other successful games like NBA Jam or Mortal Kombat sold 15-20k units.
That's just not compatible with the budgets needed in the 3d era.
As other have mentioned. I am not an expert on the subject, but as far as I am aware Arcade owned and operate by the same company like Saga World London is a relatively new and niche phenomenon. Arcade for most of their life are just being sold and operated by other parties when Arcade were everywhere ( in Japan anyway ) back in the 80s and 90s.
Gameworks was co-founded by Sega and also owned for a time by Sega Sammy; at one point it had dozens of locations, but it seems to have struggled financially for much of its life and is closing its last two locations due to pandemic-related difficulties.
Arcades in America and Europe have essentially been dead for a long time, which has to be a reason why Microsoft doesn't own any. But in Japan arcades were still thriving until recently. Unfortunately, times are tough.
I've been to arcades all over the the USA in the last decade. The new breed of arcades serve a role more like "video game bar" than the their more kid/family friendlier predecessors.
Those aren't really arcades they're bars with arcade machines, and pool tables, and jukeboxes. They're just bar distractions. People go to these for the alcohol and socializing and to cater to a specific market. The games are often a secondary excuse to visit.
When I was little the arcade market was crazy. There was one in every mall, every shopping center, and even modest sized strip malls had them. Then you'd had random stand-alone ones here and there that were significantly bigger. Every mini-golf place had an attached arcade too. I think I grew up within short driving distance of several. Now there's a couple barcades, one nearby another a longer drive, and none of which anyone under 21 can visit.
Its not a healthy market and nor one that is actually buying video game cabinets. I don't think Ive seen a remotely new cabinet in any of these. Just old classic stuff being kept together with hope, elbow grease, and baling wire. The barcade exprience leaves a lot to be desired as games people like are very old and the maintenance budget and ability of those barcades isn't impressive. The few times I've gone I'd have bad joysticks, bad buttons, machines not registering quarters, hardware locking up, and CRT screens that have aged into displaying burn-in and seemingly a lot dimmer and with more "ghosting" than I remember. They're cost centers to these bars, so they just aren't able to take care of them well, assuming spare parts are accessible (or affordable) for bar economics.
Yes these things won't go away soon, but its a small and shrinking market. SEGA can't justify the rents on those spaces which is a bad sign in otherwise arcade friendly Japan. So the transformation of arcade games into bar toys is almost complete, which is not a healthy sign for this industry. Google says the arcade industry CAGR is projected to be almost 2% during 2021-2025. That's just really terrible and the sign of a stagnated industry and perhaps one entering its negative growth rate period sooner than we might assume.
I’ve been to arcades in a fairly limited region of the US, and other than a few aimed older, they seem to be exactly like the larger of the old kid/family ones, often scaled up even farthe, but not the small, dark, dingy games-and-nothing-else ratholes that were also common in the 1980s (but less kid/family friendly.)
I was at a chuck e cheese recently (just before the pandemic) to attend a child's birthday party. At least at the one I visited, there were no recent arcade machines. Most of the machines were really crappy gambling machines. There were a few extremely outdated video game machines, but not many. It was a far cry from what I remember from my youth but maybe it was always like this?
For Sega, the money was in owning the complete operation.