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Sega Sammy Holdings Inc. said Wednesday it will pull out of game arcade operations in Japan by the end of this year amid the fallout from the coronavirus pandemic.

The Japanese company will sell an 85.1% stake in Sega Entertainment Co., a subsidiary that operates amusement facilities, to Genda Inc., an arcade game rental firm.

Sega Entertainment is the third-largest amusement facility operator in Japan. The sale comes as its game arcades have been struggling due to closures caused by the pandemic.

Sega Sammy will sell the Sega Entertainment stake on Dec. 30 for an undisclosed sum. It will book some ¥20 billion in extraordinary losses for the year ending in March 2021.

Genda will take over about 200 game arcades that Sega Entertainment runs across the country.

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