"Frustrated," He Quit Goldman Sachs... Opened an Arcade and Became a Successful CEO [Japanese Side]

Entertainment Company GENDA CEO, Shin Mai-shi
Operator of Japanese Arcade Franchise 'GIGO'
Notably Acquired Sega Entertainment During the COVID-19 Pandemic

When walking around bustling districts in Japan, you might notice there are many arcades. These arcades often span several floors and offer various games such as claw machines and sticker photo booths called Purikura. Recently, the CEO of a company operating arcades in Japan has become a hot topic. This is because a promising young talent from Goldman Sachs left the company to start her own business. Today, we share the story of Mai Shin, the female CEO of GENDA, the company that operates the Japanese game center franchise 'GiGO.'

Shin Mai, who is being interviewed. NHK.

Born in Osaka in 1984, Shin graduated from the University of Tokyo's Faculty of Economics and joined Goldman Sachs in 2007. After handling sales of financial derivatives for six years, she rose to become the head of the financial product development department and was also appointed the youngest managing director. She was regarded as a highly promising talent within the company. Although her career progressed smoothly, she gradually began to feel constrained. With financial regulations tightening, creating new products became increasingly difficult, and she found herself in an environment where personal growth was challenging. This fueled her desire to start her own business. She began meeting various startup founders and investors on her own initiative.

During this time, she met Mr. Nao Kataoka, who served as CEO of Aeon Fantasy, a subsidiary operating children's play facilities in Aeon Malls across Japan. During his five-year tenure, Kataoka significantly increased Aeon Fantasy's market capitalization from 23.1 billion yen to 131 billion yen, making him a major figure in the entertainment industry. In conversation, Kataoka proposed to Shin, "Let's create the world's best entertainment company," and they decided to partner up. They started a business renting out various game machines to arcades nationwide in Japan.

In fact, Japan's arcade-related industry has been steadily growing. Since 2010, it has been expanding at an annual rate of 5%. Including overseas markets, the growth rate is even higher. Shin said, "As technology that helps humans advances daily, leisure time is increasing. How we use this time will become important, and entertainment will play a role in this."

Exterior view of the arcade franchise 'GiGO' operated by Zenda. NHK.

The judgment proved accurate. In June 2018, GENDA acquired SPSS, a company specializing in planning and manufacturing arcade game prizes, and in July 2019, they expanded overseas by establishing a joint venture operating children's play facilities in the United States.

Then came the COVID-19 pandemic. Since arcades operate as physical stores, they continuously incur fixed costs such as rent, so they were hit hard. During this time, Sega Entertainment, the arcade company of the Sega Group known for creating 'Sonic,' faced the same situation. Unable to withstand the direct impact of COVID-19, Sega Entertainment sought a buyer. In December 2020, GENDA acquired 85% of Sega Entertainment's shares and gained the rights to operate its arcade stores.

It was not an easy decision for GENDA to make during the difficult pandemic period. However, Shin was confident that demand would inevitably recover, so she boldly proceeded with the acquisition. According to an interview with Forbes Japan, even when stay-at-home orders were issued during the pandemic, people were seen lining up wearing masks for limited-edition prizes released exclusively at arcades. She believed that even if customers did not come immediately, if there was something enjoyable at the arcade, people would return.

Thus, GENDA continues to expand its business through M&A. In 2022, they acquired Sugai Dinos, a company operating arcades, bowling alleys, and cinemas in Hokkaido, further increasing their number of stores.

An interesting point is the criteria for selecting companies to acquire. They must share the goal of becoming the world's top entertainment company. Therefore, M&A is conducted from the perspective of "working together to improve beyond the current situation." Because of this, they have never implemented restructuring that causes pain to the acquired companies.

With the goal of becoming the world's leading entertainment company by 2040, Shin continues to devote herself to the business. Meanwhile, she leads busy days as a working mom raising two children and even appears as a model in magazines.

Above all, it is fascinating to see that the secret to success in the arcade business lies in M&A. Especially, the philosophy that the acquired companies should not suffer from restructuring during the M&A process offers a valuable lesson in the often harsh world of business. It seems to fit well with a company that deals with people's enjoyment.