Sega is set to close seven of its 15 GameWorks arcade locations as the organisation undergoes significant restructuring.
Locations in Long Beach, Columbus, Detroit, Minneapolis, Indianapolis, Tampa and Miami will all close, although some will be rented out in the hope of reopening at a later date.
GameWorks was launched in 1997 as a joint venture between Universal Studios, DreamWorks and Sega Entertainment USA. Up to 150 different locations were initially planned at a cost of up to $10 million each.
However, the initial locations proved less popular than anticipated and both Universal Studios and DreamWorks subsequently sold their share of the company to Sega.
"This challenging economic environment has forced us to make these tough financial decisions," said Cory Haynes, president and COO of Sega Entertainment USA. "The changes were necessary for us to move into the future as a robust, exciting, and viable entertainment company."
"We are committed to meeting the changing needs of our consumers, and to delighting them with a GameWorks experience that is fresh and exciting. We have complete confidence that our leadership team and valued employees will continue to deliver an outstanding experience to our guests with each visit," he added.