Sega Finishes GameWorks Acquisition, Tries U.S. Arcade Comeback

Sega Entertainment U.S.A., Inc has announced that it has purchased the assets of Glendale, Calif-headquartered high-profile North American arcade chain GameWorks L.L.C. GameWorks itself was formed in 1996, and was co-owned by Sega Enterprises and Universal Studios up to its Chapter 11 bankruptcy reorganization in March 2004, at which point the company cited high rents at its facilities as a reason to re-organize. The company is notable as one of only a handful of arcade game-related chains still operating in the relatively struggling North America market, despite the continuing strength of game arcades in Japan. According to Sega, it has already launched a transformation strategy, which includes deploying new video game product, as well as expanding elements of the 'location-based entertainment' brand beyond video games, and "expanding its signature Arena Sports Bar & Grill concept across numerous locations." In fact, the formation of Sega Entertainment U.S.A., Inc (SEUI) is part of Sega Corporation's strategic plan to expand its business in the United States. Prior to the formation of SEUI, Sega primarily focused on consumer business, manufacturing and sales of video game product. To lead the new venture, SEUI appointed former Coca-Cola veteran and food and beverage executive, Ben Kitay to be its president and COO. Although part of Sega's new plans clearly lie outside of gaming, one of the more interesting parts of the plan is the company's deployment of new Sega arcade games in a number of its facilities. Most North American arcades have not had significantly updated titles for a number of years now, and so Sega's note that in four months, SEUI has installed more than 15 new game titles, totaling over 300 units in its properties nationwide is a welcome change. A recent press release reveals that beetle simulator Mushiking is among them, as is horse racing simulator Derby Owners Club, a big hit overseas.