Arcade-orientated new business - it's happening BUT NEED NAMES. Probably ;)

[drawfull]

I find myself out of work, and of course this is the absolute best time to start a business.

Is something 'cade orientated really such a bad idea? I live in a touristy area but there is now only one arcade, and everything is has is either very recent or slot-based.

I'm thinking of something arcade + somethingelse

I am open to suggestions and funding would not be an issue. Should I just open a burger bar?

[johnnybleu]

Wow, I didn't even know anyone even thought of opening arcades anymore. O_o

As far as I know, it's a dead market. Well, maybe not completely dead, but a niche market at any rate. You'll never get any of the kids to pump money into those things when they can play better games at home for free. Arcades went instinct around here over 10 years ago.... The only places I know of that have a few cabs are movie theaters, but I wouldn't have the first clue where to find an actual arcade.

Of course, you'd want to open an arcade+something else, which would work better. Lure people in with the something else, and have them play a few games while they're there. A little take-out joint would be perfect, really. Just my opinion of course.

Good luck to ya!

[saint]

Dave and Busters, Jillians, and the like are the only venues I know of that are successful long term, and there you have to have redemption games to draw the crowds.

[drawfull]

I knid of envisaged the games and the something else both being the hook. You get people in for the games that partake insomething else, and those that come for the something else partaking in the games.

It would be classics only, lots of cocktails, and I'd probably abuse the stock Quarterarcade have (their quality has not let me down).

I need to do something but it has to be something I'm interested in, I am sick of working for someone else lol. It does  need to provide an income though. And I'm up against £40k+ per year rental charges for decent premises.

Someone on here has a signature featuring a LAN and gaming / internet cafe. Does it make money? How?

[CheffoJeffo]

Wow, I didn't even know anyone even thought of opening arcades anymore. O_o

Gets discussed all the time. Recent thread on KLOV:

http://forums.webmagic.com/ubbthreads/showflat.php?Cat=0&Number=1004126&an=0&page=20

Common opinion is that is isn't feabile for the most part.

[Ginsu Victim]

I knid of envisaged the games and the something else both being the hook. You get people in for the games that partake insomething else, and those that come for the something else partaking in the games.

[mscromer]

There is a place by where I live that has arcade's, pinball and a few pool tables that seems to do well. What he does is its $12.50  to get in and all the games are free, you just push player one and play. He does allot of birthday parties and group events like little league baseball and football team parties He also has his own snack bar (no outside food or drinks aloud). During the week he seems slow but on Friday and Saturday nights his parking lot is packed. Here is a link to his web site so you can get a better idea. Hope this helps!
http://www.tornadoterrys.com/

[Ginsu Victim]

I'm in Oklahoma and have almost drove to Tornado Terry's many times. (Mainly due to his eBay auctions) I'd like to check it out sometime.

[SavannahLion]

Dave and Busters, Jillians, and the like are the only venues I know of that are successful long term, and there you have to have redemption games to draw the crowds.

That is exactly what John's Incredible Pizza does. They have all you can eat pizza, pasta and salad, a pay-per-drink bar, and all types of gaming based on a debit-like card system. They even have a couple of small rides there. The big attraction is their "friendly" birthday environment. I like the debit-like card system so much, I'm looking into adding it to my cabinets  .... once I get my garage cleaned out.

In any case, pure arcades are dead. I haven't seen one in the last ten years and I don't know of any in the city. The closest (and best) I've seen are in the casino's around Lake Tahoe and Reno areas. Not even the casinos in California have arcades yet*

In any case, don't over estimate how much a true arcade actually pulls in. The last operator I talked to has to hold another job in order to make ends meet (this is before the economic fallout). His arcade route makes just enough money to sustain itself and pay travel expenses, but not enough to support his family. With the economic fallout, I'm seeing some pretty familiar cabs on Craigs I suspect are coming from his collection.

Damn shame really.

* Haven't been to Red Hawk yet.

[Jack Burton]

It's all about building a sense of community.  People can play all the games they want for free at home.  

An arcade is a hangout, a meet up place, a place to kill time, a place to compete.  

You will have to do the research to keep a constant supply of games that random people will drop quarters into, games that the respective competitive communities will play, and classics that old school arcade gamers will come to play on dedicated machines.

You will have to do all that while doing everything you can to cut overhead.  That means learning everything you can from this site to do your own repairs and also restoring a lot of old cheap cabinets. Probably better get used to working 6 days a week.   

Also you will need to build a few cabinets from scratch.  Don't spend $10,000 on Dance Dance Revolution when you can build your own cab for $1,500.

You will need to have a side business.  Namely, concessions.  Let people eat and drink in the arcade.  Yes, it will mess up the cabinets.  Yes, it will damage them occasionally.  It sucks, but it will let people be comfortable.

Be cheap.  At most charge 50 cents to play on the big games, and 25 cents and 15 for everything else.  I am a firm believer that people will end up spending more money in the long run if you let them play a few games for cheap to let actually begin to enjoy the game.

And again, most of all, you have to become a member of the community.  Host parties, have tournaments and high score competitions, get companies involved for contests, have free game nights once a month.  

[drawfull]

Thanks everyone for all the advice. Certainly some food for thought.

I have done a lot of thinking a number-crunching too, and am back to the LAN centre / (retro) arcade mishmash.

I looked at omega sektor (in the uk), and if they can justify £4m investment it must be viable to a point.

What I wasn't able to find despite quite a lot of googling was anything concrete on the licensing issues. Anyone know how it works with commercially available games (not classics, modern stuff)? I think this could be the stumbling block.

What I also discovered is that arcade ops are still stating that they give something you can't get at home. Personally I think that's a little tenuos, but that will also be the angle I would go for if this gets anything near to being off the ground.

The level of investment for a LAN environment is also considerably more than an arcade would appear to be so I need to do more number crunching.

Thanks again! Especially for the links and names of outfits over there.

[RayB]

LAN centre, meaning a place to play networked PC games? Talk about entering a declining market. As broadband adoption and speeds increase, your market shrinks. I've seen places close up shop. There's no point to them when you can just play from home or find free wifi hotspots.

[drawfull]

I agree. But the FASTEST access we can get here as domestic users is 2mb. Yes, there are rumours that it is going to 8mb via rollout over the next 18 months, but the other thing going for it is that for my phone line and 2mb I pay £41 per MONTH. A LOT of people here are still on PAYG dial up.

There is still a market here for simple net cafes too, but the main one in the place I live is a shthole.

Also, few people, even really keen PC gamers are going to blow £4k on a good setup.

Give em what they can't get at home, for less, and you will in my opinion get people through the door.

1. We domestic users have crap speed adsl with severe bandwidth limitations.
2. Business users get premium speeds and bandwidth, albeit at a £££
3. Gaming rigs cost stupid amounts for the average joe
4. We have a diverse population. Nothing to do for the kidz, and a lot of older folk that require net access
5. We're entering recession. Are people really going to dole out £500 / year for crap net access when they can pay as they use in a premium environment. OK, some will but many will not.
6. Family orientated - there is nowhere for families AT ALL where I live.
7. We have a ridiculously generous business tax system. 0% corporation tax for example. 

I don't think it's the most stupid idea ever, but that doesn't mean anything will add up

All that said, I completely agree with you wrt the rest of the developed world, and I haven't spent anything yet.

[SavannahLion]

LAN centre, meaning a place to play networked PC games? Talk about entering a declining market. As broadband adoption and speeds increase, your market shrinks. I've seen places close up shop. There's no point to them when you can just play from home or find free wifi hotspots.

LAN centers (at least in my experience) are ethereal at best. We mostly get Internet Cafe's which aren't exactly conducive to gaming. In any case, the few LAN centers I know of, I make it a point not to visit. Why should I? I would much rather play on familiar equipment that's customized to my specific tastes and computing habits than to go play on a standardized (read: generic) PC that may or may not be better than the machine at home. Of course, I live in the U.S., appears your situation there is a little bit different.

LAN parties are an entirely different beast altogether. Before I got my kid, I would happily cart my PC and monitor to all night LAN parties.

If you're thinking of a non-food venue, then you should look into to casting your gaming net as wide as possible. LAN, Console, arcade, and pinball if you must. How successful that might be? It's really tough to say in a weakening economy. I make note of some of the largish gaming (not video) shops here and the ones surviving do well because they cast their entertainment net as wide as possible then snuggle into some really low rent areas.

[drawfull]

Points taken.

I feel, that properly structured, it might work. It might sound mad, but I am looking for an income and am willing to take a level of risk to achieve that. By income, I mean meet my obligations. I am fortunate that I don't have a mortgage, and until myself and my employer parted company I figure 80% of my income was disposable. And I didn't earn a lot. I just want to get back to that level on my terms initially.

There is a slight catch 22 with your suggestions I think Savannahlion - in order to cater for every type of gamer (console, pc, 'cade etc) one would require larger premises. Larger premises tend to be available bang smack in the centre  of town commanding premium rents (IE more risk, even though theoretically if it works in a garage it works in a stadium assuming infinite population) or in the middle of nowhere. We do nowhere really well here.

Also, I would expect to incorporate food somehow. But without the legal minefield.

Ho hum, all good fun / dreams

[Malenko]

so, I would expect to incorporate food somehow. But without the legal minefield.

sounds like vending machines to me.

[drawfull]

so, I would expect to incorporate food somehow. But without the legal minefield.

sounds like vending machines to me.

I meant concessions. We don't have a BK here or a Pizza Hut. But whilst a small BK franchise could be doable, to do it properly or a PH is beyond my means. Plus it pays a proportion of any rent I'm liable for.

I expect that Namco's in London has a similar deal going with McDs, but I'm guessing 

[CathalDublin]

Am thinking of doing something like this myself
I'd be thinking along the lines of games/swap shop/internet cafe with a few cabinets hidden in the corner with some classic money makers like street fighter, bubble bobble, tekken, puzzle bobble, etc
or 4 to 6 pool tables with a few machines 2 or 3

[Turnarcades]

Whereabouts in the UK are you? I've been putting some ideas down for a couple of years now but am still looking for that killer angle too. I have been thinking of opening an arcade but not in the same 'coin-per-play' sense we used to as kids. PM me for some more info.

[SavannahLion]

There is a slight catch 22 with your suggestions I think Savannahlion - in order to cater for every type of gamer (console, pc, 'cade etc) one would require larger premises. Larger premises tend to be available bang smack in the centre  of town commanding premium rents (IE more risk, even though theoretically if it works in a garage it works in a stadium assuming infinite population) or in the middle of nowhere. We do nowhere really well here.

Yeah, some of the biggest places like Pump It Up and California Family Fitness are in warehouse zones. Pump It Up is out by the casino and not much else. CFF is a hard to find place behind a wall of residential houses. Not exactly conducive to enticing new customers.

Incredible John's is actually in a light industrial area, auto dealership, Home Depot, so on.

In any case. What about alleyway places? The City of Sacramento is apparently trying to start this program to develop the alleys into walking shops. Right now, the alleys are usually too narrow for any auto traffic, they're filled with bums, and smell like piss. So the city is trying to entice shops into the spaces and get them cleaned up for the tourists. Many of the places in there can't even afford advertising so everything is by word of mouth. The places are starting to grab attention. Maybe there's some place in the U.K. trying to do something similar?

Is the real estate market collapsing in the U.K. like it is here? There's a few places on the market even going so far as full blown auctions just to get them sold. Most of the places really need work, by my calculations on some of the more interesting places the cost of renovation would match or exceed the cost of the place if it was sold in a good market. Basically a buy and hold strategy. Not a really a good deal unless you're a skilled DIY that can pull the renovation off in a reasonable amount of time then start pulling in income.

Ultimately, I think you shouldn't look at it as an arcade orientated business with something added. You should look at what kind of business you can open where you can add an arcade.

[leapinlew]

How about a coffee shop, with wireless internet, and laptops that can be rented. In the back of the coffee shop, put in some classic arcade games.

Host some local artists work to sell, do book readings (turtle necks required), etc.

[Necro]

Just to give you an idea here of what I've seen, recently:
- 3 LAN/Console Competition/Coffee Bars - 2 in malls, 1 on a NJ boardwalk - All failed within 3-6 months.
- 5-6 Arcades along the Ocean City, NJ boardwalk are all (seeming to me) on the brink.  Games are getting older, shoddier, and new games just aren't attracting people.  Air Hockey and SkeeBall seem to be the 'arcade' draws, while having the arcade in front of a bunch of rides also gets kids to stop (sometimes).
- Jillian's was not successful long term and filed for bankruptcy in 2004 I believe.  D&B bought out a bunch of the locations and some more are being run by another entity (called Jillians still) but even the 'big names' aren't doing hot.  A few D&B locations have closed as well from what I've been told and the economy has to be killing these places as people eat out less - and eating out and gaming together most likely will drop a lot.

The critical part here is that kids, teens, and even the people in the early 20's of today - those with the disposable income and free time (read: no kids) that would be able to come to a place like this and be a regular just don't want to.  They have no nostalgic attachment and something has to draw them in aside from the games - the games are  just a side entertainment thing.

D&B seems to have hit on a good mix, IMHO, of whats needed today.  Multiple revenue streams - and alcohol.  One can't overemphasize what the profits from large volume alcohol sales will cover in losses elsewhere in the business.  One thing I think D&B could do, but it may be centralizing a bit much, is to have a 'high end' bowling alley or harder core sports bar area. 

last thing - what are mentioned as 'classic money makers' are just that - CLASSIC money makers.  You need to think what do people TODAY want to play - not what do I wish I had when I was 15, 20, 30, whatever.

Sorry for being seemingly a downer, but just wanted to hit you with what seems (to me at least) the economic realism of what your talking about.

[Blanka]

First examine the possible visitors. What is your city like? What type of place is missing? What group do you like to have as customers?

Here in Eindhoven we have a nice place, not real arcade, but it is a bar, with great food at a good price, and it is decorated disco/retro with old alarm clocks, orange lights from the 70ties, and a bunch of retro gaming consoles, free wifi and counter top iMacs (rainbow coloured). I think they should have some arcade stuff too. They made all the stuff fold-away and they have good dj's at Thursday through Saturday too. This atmosphere really works on the big group of Design Academy students and young creative entrepreneurs. It runs quite well for 10 years now I think.

[cdbrown]

I agree. But the FASTEST access we can get here as domestic users is 2mb. Yes, there are rumours that it is going to 8mb via rollout over the next 18 months, but the other thing going for it is that for my phone line and 2mb I pay £41 per MONTH. A LOT of people here are still on PAYG dial up.

Where abouts do you live?  Most cities have 24MB connections for domestic as all the companies have gone through and rolled out their own equipment in the exchanges.  I say spend your money on a new house in an area with decent broadband.

[drawfull]

I agree. But the FASTEST access we can get here as domestic users is 2mb. Yes, there are rumours that it is going to 8mb via rollout over the next 18 months, but the other thing going for it is that for my phone line and 2mb I pay £41 per MONTH. A LOT of people here are still on PAYG dial up.

Where abouts do you live?  Most cities have 24MB connections for domestic as all the companies have gone through and rolled out their own equipment in the exchanges.  I say spend your money on a new house in an area with decent broadband.

The Isle of Man. I have the best domestic product available here. All exchanges are broadband-enabled and as I said, 8mb is being trialled / rolled out. But it is obscenely expensive, and there is little to no competition in this sector. I believe the cost to be the biggest issue.

Thanks Blanka, and everyone else for the insight.

[thatitalian]

You could play on the nostalgia angle a lot. Offer the games free, you will get more people playing. Make it into a retro bar, somewhere cool to hang out or go out for a night out but also cool to chill. Coffee/eatery/arcade. It needs to be unique!

Anyone can open up an arcade or coffee shop but to bring several aspects together, marry them and provide the consumer with something unique is a money maker!

Maybe you could have token machines (with your own custom tokens made by arcade replay with your business on there, hey it's free advertisement!) and give away a token when someone buys a coffee or product to use on the machines.

You could have loyalty cards so that people get an extra token with their 10th coffee/product. It maybe expensive to buy several tokens but it is just an idea.

You could even give the people with the highest scores FREE coffee when they come in! And post that you do it CLEARLY! That will really entice people to play and try to beat high scores! You can ring a bell or a siren whenever someone beats a high score.

[Singapura]

There are a few very large arcades in Singapore, all owned by the same chain. They seem to do very well but none of them have vintage cabs. I walk into the biggest one sometimes just for the noise. There nothing like an arcade in full operation  As far as opening a vintage arcade is concerned, you have to offer more then that, like a bowling alley or a bar. I'd love to see a 80's movie theater with an attached arcade!

[dreamakuma]

Me & a close friend are thinking about this, we are looking at an old bank that's huge and going for $30,000(at one point the bank was $200,000, But the bank holding the bank wants to drop it cheap because of property taxes.) And turning it into a Arcade/card shop/comic shop/videogame store. My friends looking into a grant and about to recive $300,000 to start a buisness. we've looked at the property and it's in great shape. Just needs new carpet. The community really needs some place for kids to go. We've listened to many kids and adults want someplace nice to go for entertainment. In our small town of 34,000, we have no theater, a bad, corrupt, gamestore, and about 40 fast food places. so the community really wants something to do. So my Friend and I are looking into doing this to help our sad little town. We have a LOT of nerds here that play D&D,Magic the gathering, read comics, and just game.

[ItchyD]

There's a place called The Works in reading, PA that I like to go to sometimes.  There is a bar on a large balcony, and below that is a substantial arcade.  I think the bar being upstairs gives parents a place to go and once they get alittle ripped they are ready for some DDR themselves.

[CheffoJeffo]

As a first step, you may want to have a look at some folks who are making arcades work:

http://www.1984arcade.com/

http://www.barcadebrooklyn.com/

http://www.groundkontrol.com/

http://www.funspotnh.com/

http://www.pinballmuseum.org/

There is a really good article in the March 2007 issue of GameRoom Magazine about Ground Kontrol, including a discussion with Clay Cowgill (one of the owners) about their formula for success. Also an article about the Pinball Hall Of Fame in July 2007. I could have sworn there was an article about Barcade, but I'll be damned if I can find it (maybe MAMEMaster or KevSteele can tell us if I am imagining things).

Some threads here on BYOAC about 1984arcade:

http://forum.arcadecontrols.com/index.php?topic=68068.0

http://forum.arcadecontrols.com/index.php?topic=42319.0

http://forum.arcadecontrols.com/index.php?topic=38646.0

After reading those, I would check into the local licensing and insurance requirements.

[RayB]

Drawfull, I can respect that your area might offer different conditions, so it could work. Just be smart and do what all good businesses do: Full thought out business plan with both optimistic and pessimistic plans. Location is important. Marketing is important. A full cost analysis is important, and factoring in the "competition" you will face from declining broadband costs year after year (coupled with increasing speeds for same price, more and more free wifi hotspots, more and more powerful laptops and netbooks, and continuing decline in PC game sales).

[DrumAnBass]

I think these guys have figured it out - http://www.barcadebrooklyn.com/

The bar comes first and this is where you make money.

The arcade games give it an 80's nostalgic feel to bring in the gen-x / children of the 80's hipsters with expendable income. They provide a signature ambiance more than income.

They have attempted this here in LA but didn't quite do it right... http://www.la.cityzine.com/2008/03/13/la-gamer-miss-ts-barcademisses-the-mark/

[CheffoJeffo]

Another to check out ...

http://www.richieknucklez.com/

[drawfull]

As a first step, you may want to have a look at some folks who are making arcades work:

http://www.1984arcade.com/

http://www.barcadebrooklyn.com/

http://www.groundkontrol.com/

http://www.funspotnh.com/

http://www.pinballmuseum.org/

There is a really good article in the March 2007 issue of GameRoom Magazine about Ground Kontrol, including a discussion with Clay Cowgill (one of the owners) about their formula for success. Also an article about the Pinball Hall Of Fame in July 2007. I could have sworn there was an article about Barcade, but I'll be damned if I can find it (maybe MAMEMaster or KevSteele can tell us if I am imagining things).

Some threads here on BYOAC about 1984arcade:

http://forum.arcadecontrols.com/index.php?topic=68068.0

http://forum.arcadecontrols.com/index.php?topic=42319.0

http://forum.arcadecontrols.com/index.php?topic=38646.0

After reading those, I would check into the local licensing and insurance requirements.

Reading the three 1984 threads makes me really want to do what I really want to do. My heart says yes, my head, LAN or coffee or porn or something. But if they can do it, with no beer.........

We have 4 weeks a year here where the population doubles. TT and Manx Grand Prix (OK doubles is an overstretch). If I do this I would need to be up and running by end of March realistically but latest end of April. TT is end May / beginning June. Tht should pay the rent for the rest of the year - it does for most every other business here.

[RayB]

My neighbor claims to have been in a bar here in Ontario, where instead of tables it was all cocktail video games. (though obviously this was a decor/style thing, not the reason people went). She doesnt remember what the place is called. I'll have to ask exactly what city or town this is.

[Flake]

There is a bowling alley right next to my house that has a small arcade.  They had some older games but not many, 3 pinballs (but one was for sale), a dance-dance revolution game, and some whack-a-mole type games.  The last time I was in there it was fairly populated by little kids whose parents were presumably bowling.

[Zeosstud]

I think it can work.  I have often though about a bar / arcade setup mostly because bars make money and I love classic arcade games.  I have run the numbers many times and 2 things always become apparent.  1st you cant pay to god awefull much in rent and 2nd... and this is the kicker...  You have to be 100% hands on.  Meaning YOU run the place, you don't have a manager, you don't take alot of time off you have to be hands on.  It is so easy in a cash business to get screwed by anyone and everyone, you have to put in the hours.  Now, once you wrap your head around that, then you have to make some more decisions.  How many games, 100% classics or do you add in a few of the latest fighters or networked driving games.  Do you buy / make your games or just lease them from the local guy with a route.  Lots of issues.  Do you do the cover to get in the door and everything is free or do you make it .25/.50 at a time, do you take tokens or quarters...  Its a long list.  It can be done, and you can be as successfull as you want to be.  If I was gonna do it, I would want 15 or so classic games, left slot takes tokens, right slot takes quarters, waitresses would not only be hot they would be friendly.  I would also consider being open wednesday - saturday and reserve Sun - Tues to rent the place out for special occasions at a nice clip where I still made some coin.  The final thing to remember, like most businesses.... Location Location Location.

-Zeosstud

[Ummon]

I think these guys have figured it out - http://www.barcadebrooklyn.com/

The bar comes first and this is where you make money.

The arcade games give it an 80's nostalgic feel to bring in the gen-x / children of the 80's hipsters with expendable income. They provide a signature ambiance more than income.

They have attempted this here in LA but didn't quite do it right... http://www.la.cityzine.com/2008/03/13/la-gamer-miss-ts-barcademisses-the-mark/

Looks like they're still going.


I know. Make it a church. Tons of tax breaks, donations a-plenty, and a dedicated customer base.

[Magnet_Eye]

I live in Portland, Oregon and frequent an 80's arcade called Ground Kontrol. It is pretty popular, is in a prime downtown location, serves beer, has live music a couple nights a week, has dj's a couple nights, has a weekly rock band competition  pumping through a large system with a projector on a large screen, and so on. Games are at 80's prices... still a quarter.

They have employees. They are doing pretty good I would say. It really got better for them once they started serving beer. I would say it double or tripled their business. So, make it a bar foremost, and you should do fine.

[drawfull]

Things are happening in the something + arcade area - thanks for all the advice.

I will likely have more posts detailing other issues soon (ie what games would be one!).

Cheers - wish me luck!!!