Nintendo Wii games continued to strengthen their competitive advantage in the international market, with the latest success being in Japan where several game companies were outcompeted.
Japan's Namco Holdings, a toy and amusement firm said on Wednesday that it would close between 50 and 60 or roughly one-fifth of its arcades, causing its shares to fall for a second consecutive session on Thursday.
A lot of the types of games that people played at an arcade can now be done at home, said Yuji Machida, Namco Holdings spokesman.
Nintendo Wii offers an innovative motion sensing controller that can be swung like a sword, with a Wii Fit which features a pressure sensing board that players can use to stimulate ski jumps.
Machida said many Japanese kids got Wii hardware and software for the console last year especially during the holiday season.
Most of the people in Japan can now play games from their homes and do not need to go to shopping malls like to play arcades since the Wii console can offer all the services from home, reducing revenue for Japanese gaming companies.
Namco Bandai is the second arcade operator in Japan to announce closure of some of its arcades and there are speculations that Sega Sammy Holdings will close about 100 of its arcades.
Namco Bandai reduced its full-year net profit by 38 percent from an earlier estimate of $155 million.
Namco shares fell on Thursday to 1,095 yen while Sega Sammy shares declined by 5.0 percent to 1,102 yen.