In a lot of ways, arcades were surviving in Japan because of the unique gameplay experiences that were offered through custom hardware; a market where the Wii can completely dominate. Personally, I think this was an obvious result and companies like Namco should have focused more resources towards the Wii as a way of protecting their (eventual) loss of revenues.

Namco Bandai isn't the only company blaming the Wii for their arcade problems. Sega Sammy Holdings (Sega's parent company) announced they expect to lose 26 billion yen and layoff 400 people this fiscal year ending March 2008 and have mentioned the Wii as one of the reasons.

http://www.next-gen.biz/index.php?option=com_content&task=view&id=9039&Itemid=2

Sega Sammy Sees Red, Cutting 400 Jobs
By Tom Ivan

"Sega Sammy Holdings said on Friday that it expects to lose 26 billion yen this business year, and announced plans to cut 400 jobs as part of its latest “turnaround efforts”.

The group, which was born through the 2004 merger of videogame creator Sega and pachinko pinball machine maker Sammy, also confirmed plans to close 110 unprofitable amusement parks and arcade outlets amid growing competition from home consoles such as Nintendo’s Wii.

Sega Sammy posted losses of 15.77 billion yen for the nine months to December, compared to a profit of 49.38 billion yen a year earlier, according to an Agence France-Presse report.

It also had an operating loss of 1.53 billion yen, compared to profit of 75.19 billion yen last year, as revenue fell by more than 15 percent to 342.09 billion yen.

The company said it will use an early retirement scheme to cut 400 jobs at a cost of around 2.9 billion yen.

“The move forms part of the latest turnaround efforts, aimed at transforming Sega into a sustainable company,” said company spokesperson Mitsunobu Higashi.

For the full financial year to March the company expects to report a net loss of 26 billion yen, having previously forecast a one billion yen profit. It also forecast an operating loss of six billion yen on revenue of 475 billion yen.

“For Sega, performance at our core businesses including amusement parks and domestic consumer businesses is faltering because we were unable to deal with the change in the business environment,” the company said in a statement."

So this is like Bicycle companies blaming the Automobile for destroying their market.

Or how internet sale sites have ruined mail-order catalogs.

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Bring on the future!

 Fine, I'll bite. Where does it say SegaSammy blames the Wii? It sounds like SegaSammy is blaming ALL consoles for their loss.

 LOL, yes they just did...

Their lose is Nintendo's gain.

wait....what is this Arcade thing ou speak of

Note for arcade developers... you need to change your business model to support the demographic. If arcades are disappearing because of the wii, maybe you should start catering to wii owners by offering unique game experiences for that platform.

Or, I guess you could just hold on to a dead market and follow suit.

I blame lack of fun Arcade games since the late 90's...

Out with the old and in with the new.

Thats the way business works. It sucks to see something so nostalgic for so many people get swallowed up but this is a story of progress that happens in a pretty much all markets.

In short this is a good thing.