February 19, 2016 7:00 am JST
Japanese gaming industry

Sega, Konami to partner on e-money readers for arcades

TOKYO -- In a bid to adapt to a waning market, Sega Holdings and Konami Holdings will join hands in developing a system where players can use digital cash to play arcade games.

     Group companies Sega Interactive and Konami Digital Entertainment, which both oversee arcade games, have begun looking into collaborating on the system, set to be developed this summer. The system will utilize popular e-money services such as prepaid transit cards, Rakuten Edy cards, as well as Konami's own Paseli digital currency.

     The system will first be rolled out to about 200 arcades run by Sega in which smart-card readers will be installed in both companies' game machines. Considering that the readers can be retrofitted on arcade games made by other companies, the readers will be marketed to non-Sega arcades as well. Sega, part of the Sega Sammy Holdings group, and Konami may take on setup and maintenance of the readers jointly.

     Given concerns that children may spend too much e-money, the companies may be pressed to create child-use smart cards with spending limits.

     The arcade market has dwindled roughly 300 billion yen ($2.64 billion) from fiscal 2006's peak to 631.4 billion yen in fiscal 2013, according to the Japan Amusement Industry Association.

     The arcade-game industry is dominated by Sega, Konami and Bandai Namco Entertainment, a unit of Bandai Namco Holdings. Up to now, each has treaded separate paths in their e-money pursuits. But the present business environment has pushed Sega and Konami to share the digital-cash burden so both can focus resources on developing arcade games.

     "Arcade games are facing a revolution in their business model," said Hirokazu Hamamura, the former editor-in-chief of the industry magazine Famitsu.

     Right now, pay-per-play fees can only be set at 100-yen increments, making it difficult to flexibly alter rates according to days of the week and times of day. Arcade operators cannot pass along the costs of the consumption tax hikes. Arcades also cannot take cues from places like movie theaters and offer discounts to females and the elderly on certain days.

    The introduction of e-money readers will likely remove those roadblocks. Not only can fees be set at one-yen increments, the readers can also collect information to help the companies attract more customers. Non-popular games can have fees reduced, and games attracting similar kinds of players can be grouped together.

(Nikkei)

Sega Sammy Holdings, Inc.

Japan

Market(Ticker): TKS(6460)
Sector:
Industry:
Consumer Durables
Recreational Products
Market cap(USD): 3,577.48M
Shares: 266.22M

Konami Holdings Corp.

Japan

Market(Ticker): TKS(9766)
Sector:
Industry:
Consumer Durables
Recreational Products
Market cap(USD): 7,064.42M
Shares: 143.5M

BANDAI NAMCO Holdings Inc.

Japan

Market(Ticker): TKS(7832)
Sector:
Industry:
Consumer Durables
Recreational Products
Market cap(USD): 7,190.08M
Shares: 222M

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