Opening up arcade? Ideas?

[Negativecreep0]

Wow you guys really discouraged me, hah. I was also toying with the idea of opening up a Poker Club, me (the house) would host tournaments weekly not taking any money from the pot. Rather we would make money on charging at the door and from alcohol sales. I spoke with my lawyer on this and in PA this is a legal practice as long as house can't win in any of the games going on in the establishment. But as far as arcade\food\lan idea I have been really doing research and it does seem like more and more places close down within a year of opening. It is a shame really. It is due mostly to home consoles, pcs etc.... Any other suggestions for small business? little off topic i know

[pointdablame]

I stopped myself from posting about this because I would just be reiterating what most have said, but I will say this.

I am a second year business student, 20 years old.  I actually did a group project last semester about opening up an arcade/pool hall.  We did research on 12 different establishments similar to our idea, and found that 10 of the 12 didn't survive 18 months.  The start up costs for this type of business are very high (more so b/c of the pool tables in my case, but the games aren't cheap either).

We also found through a survey that almost 70% of 20-40 year old male professionals (our largest target group) liked the idea of being able to play pool and especially play older classic games.  However, talking to the businesses and owners, we found that very few of these people actually go to the establishments.  We found it to be a psychological thing.  People who played old games love the idea of a place to play them again, but don't actually use the facility when it's available.

It seems that starting strictly an arcade (as most of our examples were, ie no pool involved) is an uphill battle.  Most will fail quickly and owners are left with either a very large amount of debt or with equipment that wind up selling for an obscenely low amount.

If I were in your shoes, I would not risk my money on a venture like this.  It is far too risky, and unfortunately has a track record for breaking people.  I LOVE the idea... if I could find a way to make it viable business-wise, I'd do it myself, but it seems very likely these days.

[APFelon]

I left the video game repair world in 1999. The business was dying. Now I'd say it is quite dead. The only successful business model for video games/etc is Chuck E. Cheeses IMHO... and 80% of the machines I see there are redemption.

All I can say is don't do it, don't do it, don't do it. You will get soaked, burned, and screwed 80 ways to Sunday.

Most new games have either a gun, a steering wheel, or a dance pad attached to it and they are the same variation of the same theme. Old games will not yield revenue. New games cost a small fortune. Old games cost a small fortune to repair. Hell, I had to beg, borrow and steal parts for one of my Ms. Pacman games back in 1993. Want to get an ORIGINAL Ms. Pac  joy now? Bling bling.

Fun idea, but nostalgists won't pay the bills.

APf

[CthulhuLuke]

Opening up a pure arcade in today's world is definitely an uphill battle.  Even the Wizards of the Coast arcade closed in seattle because business is just not good enough.  However, the lan cafe/arcade idea has already hit the western washington era, www.lanwerx.com in Bellevue, WA has I think something like 10 fighting game arcades along with its 40 computers, and its the best place to go play the best western washington players.  My brother's childhood friend Ryan also opened a store, http://www.gameclucks.com/  and he kept it going all this time.  Basically though he lives at the store, he's there at least 60 hours a week, I think he only has one or two other workers besides himself keep things running, and I don't believe he makes very much profit.  He doesn't have any arcade machines, but he runs a lan cafe/ halo cafe sorta, you pay 4 bucks an hour to play with some of the top northwest Halo players.
  It's definitely possible to open an arcade with other attractions, but the arcade is just too dead business wise to keep a solid crowd.

[daywane]

I tried it a couple of times and spent about 3 bucks trying to learn it.  I promptly stopped.  It was prob the equiv of not making it up the first ladder in donkey kong.  :

-*

I hear you  

[xcalibur]

Here in North Texas, there is a place called Tornado Terry's http://tornadoterrys.com/  where you pay 9 bucks and play as much as you want. All the machines are set to freeplay and you just walk up and press player1 or 2 to add credits. They have ~60-80 games, including Dance Dance Revolution, a couple of head to head racing games, NFL Blitz/NBA Hangtime tandem, 2 pinball machines, 3 pool tables and an air hockey table. They even have some classics, Mrs. Pacman, Mr. Do, Frogger and a couple others
.
The pool tables alone are so worth the 9 bucks if you play for more than an hour...

I had dreams of opening one of these places closer to my house when we had the BYOAC meetup there last year.

[flampoo]

People who play DDR deserve to be shot. Everyone, I repeat EVERYONE, looks like a complete idiot playing that game. No matter how good you think you are, or how embarassed you pretend to be, you degrade the human species when you partake in this annoying pasttime.

If you do decide to open up an arcade, don't put in a DDR machine. For the love of god, please.

[xcalibur]

Flampoo is a closet DDR player... practicing his moves when no one is looking...  

[Hoagie_one]

its a dance dance revolution.


everybody dance....woooo hoooo

[versapak]

People who play DDR deserve to be shot. Everyone, I repeat EVERYONE, looks like a complete idiot playing that game. No matter how good you think you are, or how embarassed you pretend to be, you degrade the human species when you partake in this annoying pasttime.

If you do decide to open up an arcade, don't put in a DDR machine. For the love of god, please.

So you are actually thinking about how cool you look while standing there playing Ms Pac-Man?

LOL


It is about the fun being had, and DDR offers up plenty of the fun.

[RayB]

I don't like any game that makes me SWEAT.
 

[Hoagie_one]

I don't like any game that makes me SWEAT.
 

I get pretty steamy when i play on an air hockey table

[RayB]

I know this guy who gets all sweaty just playing Sega Daytona.

[fredster]

That Lanwerx looks like a winning formula.

I think the cover charge model would work better than the traditional quarter model.

If somebody could add a twist to the original arcade model, then they could make money.

Food & Fun has been a winning combo for all of recorded history.  

That Lanwerx looks very cool.  It could have potential from the food side and the arcade side.  I wonder how the get the licence fees?  Do they pay royalties?

Looks like a lot of card reader stuff.  

Very interesting.  You could even have the classics in there with a card reader on them too.  

[Iori]

Any other suggestions for small business? little off topic i know

How about a specialty video game shop?  Sell the current consoles and software, but also carry an extensive collection of the older consoles as well as imports, video game soundtracks and maybe even sell some arcade machines OR if you have the floor space have your business mainly be about selling console games, but have some Arcade cabinets set up as a novelty mini arcade as well...  you probably wouldn't make much on the mini arcade, but it may be something to help separate you from the EB's and GameStops.  Good luck with whatever you end up doing...  

[snekse]

Someone mentioned it earlier, but I thought it was worth repeating....

If you don't already own a house, put that money away for a down payment.  Just because you have money doesn't mean you have to spend it.

With that said, I'll also give you another suggestion.  You could always buy 1 or 2 games, place them in bars and split the profits with the owners.  Don't take anything less then 60% (unless it's an *extremely*  good location).  I know standard practice is 50/50, but that's when the bar owners are seeking you (the vendor) out.  

Also, decide which games you want to buy based on potential revenue, not because you like it.  Golden Tee, DDR and that damn Derby Owners game all make a ton of money.  My choice would be Golden Tee or EA's PGA Tour or EA's new Madden football game because they cost a lot to play and there is a hard core fan base out there.  Plus the tourneyments will bring people back over and over again.

Be aware though that you probably won't make money until you sell the machine you buy.  A GT machine costs about $5k.  Even at $4 a play you're not going to make your money back any time soon, especially when splitting the profits with a bar.  When you sell that game for $3k in 3 years and you've made a couple of grand off it, that's when you make your money.

Which brings me back to the "find other things to do with your money" argument.  The stock market averages at least 8% return per year.  Go buy some S&P 500 shares (Ticker: SPY) and don't touch it until you're 65.  It will be one of the best decisions you've ever made.  Remember, saving and investing are like voting.  You should do it early and do it often.

[StarChild]

I know this was already mentioned above, but rental properties are also a grand investment.  Someone else lives in the house and essentially pays your mortgage payments.  The principle is yours  After the mortgage is payed off/down...it becomes residual income.

There's a million books out there on how to do this...from choosing locations, negotiating prices, making offers to choosing a mangement company and budgeting the renter payments into improvement and maintenance funds.

-*

[MonitorGuru]

Save your cash and buy a house... you'll make more from the house then you would ever make at an Arcade.

And add a PERSONAL arcade to that house. Much more enjoyable in the long run.  fix up the games and they'll appreciate (if you pick the right ones) over time just like your house.

Google the rec.games.video.arcade.collecting newsgroup and you'll see tons of similar posts "can I open an arcade".  The basic answer is NO.  THe last time it made sense was the early 80's. Nowdays the insurance and the fact that everyone already has locations locked in, makes it impossible to make any money let alone keep from loosing money.