The growing home console market is seen as a positive trend to most areas of the games industry, but that doesn't mean every sector is happy. Arcades have been in decline for some years in the West, but up until now Japanese arcades have continued to flourish even if the number of Pachinko machines they house has gone up significantly.Namco Bandai and Sega Sammy are the major forces behind these arcades in Japan, but both now plan significant downscaling of their arcade operations. Namco Bandai is to close between 50 and 60 arcades (1/5 of its total) and Sega Sammy is shutting around about 100 arcades.The reason for the closures is due to the popularity of home consoles, and as Namco Bandai spokesman Yuji Machida says, "A lot of the types of games that people played at an arcade can now be done at home."He also pinpoints the popularity of the Nintendo Wii as a major detriment to the arcades. Rather than children spending their allowance on arcade machines, they are using it to purchase peripherals and new games for their Wiis. This problem is compounded further by Japanese families not traveling to shopping malls as often (the main location of the big arcades) due to the rising cost of fuel for their cars.Japan is the one country left in the world that still has a major arcade presence. You can go there and still find arcade machines from the 80s and 90s. In the West, you seem to get the latest machines and the ones that are hooked up together for multiplayer such as Daytona and OutRun.Although this is a big loss for arcade regulars, there is still a major arcade presence in Japan, and I think it will continue to be for the next few years. Sega Sammy is also looking forward and has already seen a lot of success by introducing networking to arcades; coupled with large screens showing top scores and actual games being played around Japan.