The arcade is empty? In Japan, 18 game centers went bankrupt last year

According to a new report, the number of arcades in Japan, the world's third largest gaming market, has fallen by nearly 8,000 over the past decade.

Research released by financial analytics firm Teikoku Databank shows that 18 game centers in Japan went bankrupt in the past fiscal year, the most in the past five years.

According to the report, the number of arcades has fallen by 30% since before the pandemic in 2020, and increases in operating costs in recent years, such as higher consumption taxes, higher coin exchange fees, and higher electricity bills, have accelerated this trend.

In recent years, claw games have gone mainstream, making it difficult for game centers to attract customers through the traditional arcade console layout, the report said.

The report also notes that the increased focus on claw games means businesses are more vulnerable to the increased cost of prizes.

An analysis of the profitability of game center operating companies found that the average operating profit was only 6 yen (about $0.039) per 100 yen of sales.

However, the report also noted that even before the outbreak, the number of arcades in Japan had been on a downward trend. In 2019, there were only 4,022 arcades in Japan, down from 26,573 in 1986.