Japan's US$6.9bn arcade industry has been hit hard by new advances in home console gaming, particularly Nintendo's hugely popular Wii, the latest craze to compete for the time and pocket money of Japanese kids.

Unlike many countries where the rise of Sony’s PlayStation during the 1990s wreaked havoc on the industry, Japan’s arcades were more resilient, helped by a greater variety of machines and plentiful foot traffic in crowded cities.

But now some of the biggest chains are shutting many of their outlets.