Thinking of opening an arcade...

[katuuuz]

Hi everyone.

A friend and I are looking into opening a game room/arcade.  I've been looking online for information, and have already printed out a license application.  I figured this forum would be a great place to lay some groundwork in the brainstorming phase.  

I have a few questions pertaining to how things work exactly...

1.  I won't be renting arcade cabinets, I'll have outright bought them.  Do I still need to give a percentage of my profits from the cabinets to the copyright owners?  If so, is there any way to obtain copyrights or permission to use them and keep all the coinage?    

2.  I've built a MAME cabinet before, and it is still fully functional.  For something like this, would I have to be granted permission by every game hosted on the machine to charge patrons to use it?

3.  I was thinking of setting up kiosks for systems like the NES, SNES, Genesis, and N64.  (Like the PS3 kiosk at Best Buy where users can play, but the system is under lock and key).  I would like to put a PC in each kiosk cabinet and emulate these systems.  Does the copyrights to these games hold true with the above?  

What I'm basically trying to say is ; is this doable, and is it going to cost me a bagillion dollars?

Thanks in advance for anyone with knowledge on the subject.

[Turnarcades]

Good luck with the venture, I'm currently in talks about a very different arcade-orientated business but I can let you know what I've learned so far.

1. No, all profit will be yours. Buying and owning original machines gives you rights to use it, within the restrictions of your local laws. Not sure about the US, but in the UK these fall under the same licence as vending machines, which is why they can be sited in all kinds of locations. For low-win fruit machines and SWP machines you need a class 1 gaming licence, at around £2000 a year. For high-win machines you need the casino-level licence, which as I understand is well into 5 figures.

2. Forget MAME'd machines. There are way too many aspects that mean it cannot be used with commercial licences. Assuming you got permission from all involved (the OS designer, the FE designer, the MAME devs, plus of course the original game copyright owners), which is seriously doubtful, the licence fees for running games in this sense are astronomical, and you'd find local licences would not cover them anyway.

3. See above. No, no, no, no, no!

Give up now and save the headache.

[versapak]

Hi everyone.

A friend and I are looking into opening a game room/arcade.  I've been looking online for information, and have already printed out a license application.  I figured this forum would be a great place to lay some groundwork in the brainstorming phase.  

I have a few questions pertaining to how things work exactly...

1.  I won't be renting arcade cabinets, I'll have outright bought them.  Do I still need to give a percentage of my profits from the cabinets to the copyright owners?  If so, is there any way to obtain copyrights or permission to use them and keep all the coinage?    

2.  I've built a MAME cabinet before, and it is still fully functional.  For something like this, would I have to be granted permission by every game hosted on the machine to charge patrons to use it?

3.  I was thinking of setting up kiosks for systems like the NES, SNES, Genesis, and N64.  (Like the PS3 kiosk at Best Buy where users can play, but the system is under lock and key).  I would like to put a PC in each kiosk cabinet and emulate these systems.  Does the copyrights to these games hold true with the above?  

What I'm basically trying to say is ; is this doable, and is it going to cost me a bagillion dollars?

Thanks in advance for anyone with knowledge on the subject.

You won't get any permission or license to legally use any cabinets that run MAME or any console emulators, so that really isn't an issue of money at all.

As for legitimate machines and console kiosks...

I don't know, but I'm betting a lot of it depends on your own local region.

[saint]

RE: MAME cabinet and/or emulation kiosks:

NO! NONONONONO! If you don't know why, you haven't done enough research to even contemplate opening an arcade. It is against the MAME license, and is illegal.

That said, if you're thinking of opening an arcade here is a list of threads you must read on the subject. Then, you'll likely want to find something smarter to do with your money, like burning it. It *is* possible to run such a business, but the days of mom n' pop arcade halls are dead. You need something bigger with something else to drive the business (bowling, restaurant, etc).

Read these:

http://forum.arcadecontrols.com/index.php?topic=81552.0

Read this one three times:
http://forum.arcadecontrols.com/index.php?topic=91583.msg961545#msg961545

http://forum.arcadecontrols.com/index.php?topic=88244.0

http://forum.arcadecontrols.com/index.php?topic=71083.0

http://forum.arcadecontrols.com/index.php?topic=25443.0

http://forum.arcadecontrols.com/index.php?topic=71148.0

http://forum.arcadecontrols.com/index.php?topic=43124.0

http://forum.arcadecontrols.com/index.php?topic=34200.0

Hi everyone.

A friend and I are looking into opening a game room/arcade.  I've been looking online for information, and have already printed out a license application.  I figured this forum would be a great place to lay some groundwork in the brainstorming phase.  

I have a few questions pertaining to how things work exactly...

1.  I won't be renting arcade cabinets, I'll have outright bought them.  Do I still need to give a percentage of my profits from the cabinets to the copyright owners?  If so, is there any way to obtain copyrights or permission to use them and keep all the coinage?    

2.  I've built a MAME cabinet before, and it is still fully functional.  For something like this, would I have to be granted permission by every game hosted on the machine to charge patrons to use it?

3.  I was thinking of setting up kiosks for systems like the NES, SNES, Genesis, and N64.  (Like the PS3 kiosk at Best Buy where users can play, but the system is under lock and key).  I would like to put a PC in each kiosk cabinet and emulate these systems.  Does the copyrights to these games hold true with the above?  

What I'm basically trying to say is ; is this doable, and is it going to cost me a bagillion dollars?

Thanks in advance for anyone with knowledge on the subject.

[CheffoJeffo]

What saint said.

There has also been an interesting series of articles in GameRoom Magazine recently about the demise of an arcade, as told by the owner. His story is much the same as others I have heard.

There have been a couple of initiatives lately that are progressing, but they are more geared towards the "hands-on museum" aspect and are being run by people who restore and repair their own games.

Don't underestimate the importance of machine maintenance and repair -- it can be technically demanding and costly if you can't do it yourself.

[katuuuz]

Well, back to the drawing board then I guess.

Thanks guys.  I guess I just wanted to pretend I could revitalize the local arcade scene.  ---steaming pile of meadow muffin---, if there was still such a thing around here, I'd be there all the time, especially now that I could buy $40 worth the quarters without even thinking twice.  Unfortunately it looks like the good old days are gone forever.  I may still be interested in buying a couple machines for my barber shop, but in no way will I be making any type of serious bank on them.

Ah well, back to building 4' replica cabinets to run MAME in for my personal miniature arcade in my hosue.  Thanks again, and -rep to console gaming. 

[Yvan256]

If you don't have a competing "big chain" in the area where people can go rent videogames, making it an all-in-one place for videogames could make it very successful. Imagine a one-stop shop where people can play real arcade cabs (i.e. no MAME), builders can buy arcade parts (joysticks, buttons, T-molding even!), players can buy videogames (PC, consoles), consoles and accessories (gamepads, memory cards, etc) and can also rent videogames  (consoles only, PC games have serial numbers, etc).

Depending on the area, you could also make it a "PC shop" where people can buy computers or at least gaming-related components (i.e. computer parts such as cases, motherboards, CPUs, RAMs, hard drives, graphic cards, keyboards, mouses, monitors - but not printers, scanners, etc).

If you don't want to do it all, maybe check with local businesses, perhaps you could team up with someone already established as a "gaming place", simply run arcade machines from there. Or just ask some businesses if they'd be interested in having arcade machines on their location: videogames rental places, movies rental places, bowling alleys, etc.

[katuuuz]

If you don't have a competing "big chain" in the area where people can go rent videogames, making it an all-in-one place for videogames could make it very successful. Imagine a one-stop shop where people can play real arcade cabs (i.e. no MAME), builders can buy arcade parts (joysticks, buttons, T-molding even!), players can buy videogames (PC, consoles), consoles and accessories (gamepads, memory cards, etc) and can also rent videogames  (consoles only, PC games have serial numbers, etc).

Depending on the area, you could also make it a "PC shop" where people can buy computers or at least gaming-related components (i.e. computer parts such as cases, motherboards, CPUs, RAMs, hard drives, graphic cards, keyboards, mouses, monitors - but not printers, scanners, etc).

If you don't want to do it all, maybe check with local businesses, perhaps you could team up with someone already established as a "gaming place", simply run arcade machines from there. Or just ask some businesses if they'd be interested in having arcade machines on their location: videogames rental places, movies rental places, bowling alleys, etc.

That's a good idea.  Buy and refurbish arcade games and just plant them around the town in various stores that are willing to have them.

[RayB]

No, those days are over. Most businesses that have space and clientele for coin-operated machines ALREADY are under contract with "operators" who place their machines there and split revenue with the location owner. There's a REASON why you see more of those "Stacker" "win a prize" type machines, food and drink vending machines, etc instead of video games now.

Don't waste your time. The only thing that can work is a retro arcade / museum, and you have to be really passionate and knowledgeable to pull it off (not to mention have dirt cheap rent, and family to help run it, otherwise the costs are too high).

Another thing no one mentioned is taxes and permits which vary by State/Province and even by City. You never mentioned where you live.

[katuuuz]

No, those days are over. Most businesses that have space and clientele for coin-operated machines ALREADY are under contract with "operators" who place their machines there and split revenue with the location owner. There's a REASON why you see more of those "Stacker" "win a prize" type machines, food and drink vending machines, etc instead of video games now.

Don't waste your time. The only thing that can work is a retro arcade / museum, and you have to be really passionate and knowledgeable to pull it off (not to mention have dirt cheap rent, and family to help run it, otherwise the costs are too high).

Another thing no one mentioned is taxes and permits which vary by State/Province and even by City. You never mentioned where you live.

I live in CT.  Yeah, this idea has really been shot down.  Thanks everyone for the input, I guess any games I come across will either go in my barber shop or in my spare bedroom turned arcade I guess.  Thanks again.

[zelony]

I own a Gaming Center and Internet Cafe with 33 PC's and 10 XBOX 360's.  In the last 6 years I have about $700,000 in sales and have never turned a profit.  I suggest that you save your money and avoid this industry like the plague.

[SavannahLion]

I own a Gaming Center and Internet Cafe with 33 PC's and 10 XBOX 360's.  In the last 6 years I have about $700,000 in sales and have never turned a profit.  I suggest that you save your money and avoid this industry like the plague.

Have you considered writing your experiences?

[aumameman]

It is really sad that the day of the Arcade game centre is dead. You do find the odd one around the place in Australia but there is far less of them than there were 10 years ago.

Its even getting hard to find a "Daytona USA" machine to play as I don't think they turn a profit anymore.

[katuuuz]

It is really sad that the day of the Arcade game centre is dead. You do find the odd one around the place in Australia but there is far less of them than there were 10 years ago.

Its even getting hard to find a "Daytona USA" machine to play as I don't think they turn a profit anymore.

Well, when I die and go to heaven, I will be in the arcade section.

[Expressline99]

Katuuuz, its horrible to even read this thread. But everyone here is dead on. I've also been following the series in GameRoom Magazine and
it plots a story that lots of Mom and Pop arcades are following now... for those that are still hanging on. Sorry about your dream...at one
point it was mine too.

 

[katuuuz]

Katuuuz, its horrible to even read this thread. But everyone here is dead on. I've also been following the series in GameRoom Magazine and
it plots a story that lots of Mom and Pop arcades are following now... for those that are still hanging on. Sorry about your dream...at one
point it was mine too.

 

Thanks Express.  Some of my funnest times as a kid was running madly through the doors of Jester's Courtyard, (A huge arcade attatched to my local Burger King) and heading straight for the Metal Slug machine with a fist full of quarters.  Pounding those buttons with my Whopper-greased fingers and listening to the ambient noise from all of the other machines will be a warm place for me to visit in memory for the rest of my life.  It closed down in the early 90s and remained an abandoned building for years, until one day I drove up East Main Street and it was leveled completely.  (If only I was into building arcades back then I probably scored a ton of cabs. 

If I ever come into a serious amount of money I will embark on this venture.  Not being at all profitable, I guess I won't be able to share the greatness of the local arcade for the kids in my town today, so it will solely remain a personal hobby.  I guess it is just like our parents and their transistor radios, or ball room dances.  Some great things just go away and can't come back. 

R.I.P. Jester's Courtyard

[DashRendar]

This industry isn't THAT dead!  As was mentioned earlier, you just need a gimmick or something else besides arcade games.

Maybe open up a Dave & Buster's franchise in your area?  The one we have here is always busy with lots of people playing arcade games and whatnot.  

http://www.daveandbusters.com/

[HaRuMaN]

franchise, meh...

[katuuuz]

This industry isn't THAT dead!  As was mentioned earlier, you just need a gimmick or something else besides arcade games.

Maybe open up a Dave & Buster's franchise in your area?  The one we have here is always busy with lots of people playing arcade games and whatnot.  

http://www.daveandbusters.com/

Well a friend and I were actually going to be partners as I think I stated before.  We are both aware of the death of arcades, and he was trying to convince me to do laser tag as the main attraction, and have an arcade room branched off of that.  We actually went into a laser tag place this past Saturday and the kid working there actually gave us a tour of the place and answered a lot of our questions.  They had 40 vests/guns which were priced at about $1,200 a piece.  That is my only gripe - the high cost of laser tag.  I suggested an indoor roller rink because the skates would be a lot cheaper, but he wasn't into it.  I guess if this were to one day happen we would indeed need something else and unfortunately the arcade would be an "addition" to whatever that may be. 

P.S. I'm against franchises too, but serving alcohol is definitely something that would included  

[HaRuMaN]

Not to mention:

Dave & Buster's is wholly owned and operated and not franchising at this time.

[Aceldamor]

This industry isn't THAT dead!  As was mentioned earlier, you just need a gimmick or something else besides arcade games.

Maybe open up a Dave & Buster's franchise in your area?  The one we have here is always busy with lots of people playing arcade games and whatnot.  

http://www.daveandbusters.com/

 We actually went into a laser tag place this past Saturday and the kid working there actually gave us a tour of the place and answered a lot of our questions.  They had 40 vests/guns which were priced at about $1,200 a piece.  That is my only gripe - the high cost of laser tag.

On the flip side, it is a one time expense, short of maintenance. Overhead is going to be a tough one here, since laser tag arenas have to be very large to be any fun. There is a laser tage place that opened up by where I live, and it is slow going. It doesn't even open until 2PM during the school year.

  I suggested an indoor roller rink because the skates would be a lot cheaper, but he wasn't into it.  I guess if this were to one day happen we would indeed need something else and unfortunately the arcade would be an "addition" to whatever that may be. 

P.S. I'm against franchises too, but serving alcohol is definitely something that would included  

Roller rink huh? Could potentially make you some money, but only if you could hook schools, clubs, etc on regularly renting the venue, and again, it would be a night time only scenario.

We recently lost another arcade here in Phoenix, which pretty much leaves the only big arcade being Castles N Coasters, and arguably Golfland/Fiddlestix. The ONLY reason Castles N Coasters is still in business is because they built a small amusement park around the arcade/goofy golf. They now have like 10 rides, 2 coasters, and a water ride attraction. The same stands for the other parks, they get their revenue from other attractions.

[katuuuz]

This industry isn't THAT dead!  As was mentioned earlier, you just need a gimmick or something else besides arcade games.

Maybe open up a Dave & Buster's franchise in your area?  The one we have here is always busy with lots of people playing arcade games and whatnot.  

http://www.daveandbusters.com/

 We actually went into a laser tag place this past Saturday and the kid working there actually gave us a tour of the place and answered a lot of our questions.  They had 40 vests/guns which were priced at about $1,200 a piece.  That is my only gripe - the high cost of laser tag.

On the flip side, it is a one time expense, short of maintenance. Overhead is going to be a tough one here, since laser tag arenas have to be very large to be any fun. There is a laser tage place that opened up by where I live, and it is slow going. It doesn't even open until 2PM during the school year.

  I suggested an indoor roller rink because the skates would be a lot cheaper, but he wasn't into it.  I guess if this were to one day happen we would indeed need something else and unfortunately the arcade would be an "addition" to whatever that may be. 

P.S. I'm against franchises too, but serving alcohol is definitely something that would included  

Roller rink huh? Could potentially make you some money, but only if you could hook schools, clubs, etc on regularly renting the venue, and again, it would be a night time only scenario.

We recently lost another arcade here in Phoenix, which pretty much leaves the only big arcade being Castles N Coasters, and arguably Golfland/Fiddlestix. The ONLY reason Castles N Coasters is still in business is because they built a small amusement park around the arcade/goofy golf. They now have like 10 rides, 2 coasters, and a water ride attraction. The same stands for the other parks, they get their revenue from other attractions.

Yeah I think the roller rink would work.  There literally is nothing to do around my town, and we used to have one that closed down.  I remember everyone had birthdays there and it was the weekend hangout.  (They also had an arcade there).  Try playing Mortal Kombat with skates on.  I think I used the joystick more for balance then movement.

[shardian]

I HATE this multipart article. The guy sounds like a real jackass. He admits in the very beginning he had absolutely no clue what he was doing, and just bought a load of cheap games and threw them in a building. I don't like his snobbish, derogatory tone. I only read it because I read all of my GRM issues cover to cover.

There is no lesson in that article other than a universal business lesson. DON'T START A BUSINESS WHEN YOU DON'T KNOW ---steaming pile of meadow muffin--- ABOUT YOUR PRODUCT!
You wouldn't go open up a car repair center or a car dealership without knowing alot about car sales or car repair would you? Then why in the world would you do the same with expensive arcade machines and a really poor market?

::Rant off::

What saint said.

There has also been an interesting series of articles in GameRoom Magazine recently about the demise of an arcade, as told by the owner. His story is much the same as others I have heard.

There have been a couple of initiatives lately that are progressing, but they are more geared towards the "hands-on museum" aspect and are being run by people who restore and repair their own games.

Don't underestimate the importance of machine maintenance and repair -- it can be technically demanding and costly if you can't do it yourself.

[DashRendar]

Not to mention:

Dave & Buster's is wholly owned and operated and not franchising at this time.

Yep- but you could use their business model for your own.  Have a full bar, restaurant, skeeball, multiplayer games, party atmosphere, etc.

Seems to work for them, should work for you.

[Dartful Dodger]

Yeah I think the roller rink would work.  There literally is nothing to do around my town, and we used to have one that closed down.  I remember everyone had birthdays there and it was the weekend hangout.

There is nothing that's not online for kids to do anywhere.

So if you build it they will come.

Kids from all walks of life from all over will come and eventually the tougher/thug kids will squeeze out/scare away the good kids so you’ll just be catering to vandals and thieves.

My sister had her nieces b-day party at roller rink.  It was a lot of fun in a really good neighborhood, it was during the day and the roller rink was only open to b-day parties or rented to groups.  On weekend nights it was opened up to the general public.  At the party I thought it would be a fun place to take a date, sort of like a nostalgic thing.  

At night it was all wannabe gangbangers and thugs.  I told my sister and she laughed and said on the weekends the police are called there a couple times a night.  She said I was lucky, if enough kids from competing schools show up, it becomes a warzone.

Maybe I just hate people or I'm too pessimistic, you should go to the closest roller rink to where you want to have one.  This will more or less be your clientele too.  You can see for yourself if this is what you want to be dealing with.
     ...bring a couple of big friends with you and don't bring any dates.

[SavannahLion]

  I suggested an indoor roller rink because the skates would be a lot cheaper, but he wasn't into it.  I guess if this were to one day happen we would indeed need something else and unfortunately the arcade would be an "addition" to whatever that may be. 

P.S. I'm against franchises too, but serving alcohol is definitely something that would included  

Roller rink huh? Could potentially make you some money, but only if you could hook schools, clubs, etc on regularly renting the venue, and again, it would be a night time only scenario.

Why night? IIRC, some of the local rinks around here have regular clubs complete with competitions between clubs and regional contests. My fiance wants me to join, but being a mountain blader (instead of freestyle) with a wonky schedule kind of precludes that... oh and being severly out of shape doesn't help either. 

We recently lost another arcade here in Phoenix, which pretty much leaves the only big arcade being Castles N Coasters, and arguably Golfland/Fiddlestix. The ONLY reason Castles N Coasters is still in business is because they built a small amusement park around the arcade/goofy golf. They now have like 10 rides, 2 coasters, and a water ride attraction. The same stands for the other parks, they get their revenue from other attractions.

+1

There's a mini-golf/arcade in Sacramento that installed a ride or two. A major distraction since it's right there on the highway, but the ride seems to be running all the time.

John's Incredible Pizza also sports an all-you-can-eat buffet with indoor rides.

Maybe I just hate people or I'm too pessimistic, you should go to the closest roller rink to where you want to have one.  This will more or less be your clientele too.  You can see for yourself if this is what you want to be dealing with.
     ...bring a couple of big friends with you and don't bring any dates.

I've never actually encountered that at any rink I've ever gone to... of course, it could be the time of day since I tend to avoid places at night. Stupid ---uvulas--- here can't drive worth a damn and it's worse at night.

Instead of a roller rink, what about an ice rink? It's strange, but while you still get a few "thugs" and wannabe "gangbangers" they seem to avoid any place cold like it's infested with a plague. I guess those Raiders jackets and blue jeans don't keep them as warm as they thought? Of course, you still get those idiots who think they're all that and push other people around, but that's why you reserve the right to refuse service. 

There are other venues popping up that you can consider. All of them in or around the Sacramento area.

A gym with indoor basketball and soccer courts. Anemic arcade though.

A "bounce house" type of place. Giant rooms filled with massive bounce house type attractions. They sported only one arcade with was a commercial multi-cade type of thing, and the stupid thing wasn't even plugged in. 

A new attraction opened up recently where an entire room(s?) is nothing but trampolines and basketball hoops. Have no idea if they sport an arcade though. 

[zelony]

When I first opened Click's we were a full Bar & Grill with 50 PC's, two pool tables, a foosball machine, two dart boards, Golden Tee and 11 booths with TV's and old school atari games.  Even with $30,000 a month in sales the overhead killed us.  We eventually closed and moved to the mall where we are just a gaming center and internet cafe.  Our customer base keeps dropping because more an more they have their own computers and consoles at home so they only come in to play if they want a group dynamic.

I have a full time job outside of Click's as it has never been able to pay me a salary.  I strongly advise anyone thinking of this type of business to think twice.  I have spent over $400,000 on this place and never made a profit and most likely never will.

Good luck to anyone trying it.

Jeff

[katuuuz]

When I first opened Click's we were a full Bar & Grill with 50 PC's, two pool tables, a foosball machine, two dart boards, Golden Tee and 11 booths with TV's and old school atari games.  Even with $30,000 a month in sales the overhead killed us.  We eventually closed and moved to the mall where we are just a gaming center and internet cafe.  Our customer base keeps dropping because more an more they have their own computers and consoles at home so they only come in to play if they want a group dynamic.

I have a full time job outside of Click's as it has never been able to pay me a salary.  I strongly advise anyone thinking of this type of business to think twice.  I have spent over $400,000 on this place and never made a profit and most likely never will.

Good luck to anyone trying it.

Jeff

Damn, sorry to hear that Jeff.  Click's looks like a pretty cool place indeed.  I guess I'm not willing to be out $400,000 with no profit coming in.  How do you stay open?  You just make enough for the business to stay afloat? 

[zelony]

It barely makes enough to cover payroll and rent.  But for some reason, I keep trying.  I have decided that the next time sales drop and I need to cover payroll out of my own pocket I will just close the place.

[protokatie]

I wonder if one way to make an "arcade" work is to have a Bowling Alley with a side room with coin op pool tables, a bar/grill and an arcade room. I would guess that the only way to make any of this sort of thing work is to diversify and have as many draws per square foot of real estate as you can fit. I know where I live, bowling is still pretty popular, and I could see indoor golf (the virtual golf thing) being popular as well since there are a lot of golfers, and there is no winter golfing season (snow is not only difficult to swing on, but just try to find your white titleist ball in it )

[MonMotha]

I've known several arcade/amusement center operators/owners over the past few years.  There seem to be a few themes from their experiences:


Bigger is often better.  Unless you're in a high foot traffic location like a mall, you're a destination.  You need something big, mostly for the kids.  Laser tag seems popular enough to earn profit.  Miniature golf can work.  Go-karts can work.  Carnival rides can work.  Bowling can work.  The coin-op games complement at that point by providing things for people to do while waiting for the big stuff.

If you can do the full blown "Family Entertainment Center" or "Eat and Play Center" thing ala Chuck-e-Cheese or Dave&Busters and Gameworks, you can make money.  This requires an insane amount of capital, though, in the millions of USD, to start up.  Make sure your market can support it.  Those kinds of establishments have rather high fixed cost, so you need lots of volume.  You'll make a lot of money on alcohol sales, so look into the liquor licensing rules in your area.


Redemption earns but video doesn't.  Sorry, I know the classic people all love 'em (and I do too - I don't like redemption), but the video games just don't earn with the exception of the crazy expensive dedicated games.  Video games are mostly there to occupy the older clientele (parents, lone teens) while their kids blow tons of money on redemption or laser tag.  You have to keep your margins in mind on the redemption, though: tickets are about 1c/ea in smallish quantity, and you can't blow your potential profit away on the prizes.  Remember to factor costs in when you take count at the end of the week.

For videos that earn, look at shooters, racers, in some markets, the dedicated music games (mostly Dance Dance Revolution), generally in that order.  These games are big, so factor your cost in terms of floor space in.

For redemption that earns, the cheezy things like Slam-a-Winner, Colorama, and cheezy coin pushers seem to do best, usually in that order.  The latest redemption craze can do well at first, but they don't seem to have staying power, so it's a gamble: either buy it and hope it pays itself off eventually or buy it, milk the initial rush, then try to sell before it loses much value.

Skill based redemption games like Skee Ball earn OK.  These usually also serve to occupy parents while their kids are playing, but again be sure to factor in redemption costs.


Food makes bank.  If you've got the venue for a snack bar, it's where a bunch of your money will come from.  One place I knew could basically map their profit to their soft drink sales.  The rest of the place basically broke even.

Full blown restaurants have lots of overhead.  If you're planning to go that route, make sure you do your homework.  The restaurant is almost a separate entity with both sides attempting to drive business to each other.

A bar can be effective (see D&B "Eat, Drink, and Play"), but has lots of legal hassle and can attract an undesireable clientele or promote undesireable behavior if you're going for a more family oriented location which could keep away people with young children.


Mornings are dead.  Don't even bother being open.  There's no reason to open until about 1PM on a non school day and 3-4PM on a non school day.

Weekdays are also dead at destination establishments.  Consider taking Mondays and/or Tuesdays off.  Also consider that some of your costs don't go down just because you do that.


Staff is a killer in terms of economics.  Most of the small establishments I know wouldn't be in business if it weren't for the owner and sometimes even the owner's family working free or very cheap.


In a nutshell, the pure video arcade is dead.  If you want to have a viable business, you need something else: at least redemption, and then you need a lot of foot traffic nearby.  Make sure you research your market before you do anything, and be prepared to shell out lots of cash up front and lose it all.  If you do make money, you won't make much.  Do it because it's fun, not because it's a way to earn a living.

[IG-88]

There is a place in Omaha called Bene's Pizza that is all '80s retro. Has 10+ machines and a few pins. It's a great place to go. The pizza is pretty good but not sure if it's the only draw. They been hanging on for quite a while now. I try to go everytime I'm in town. Whether I'm hungry or not. They sell beer too so that helps. 

There is also 1984 in Springfield Mo. They seem to be doing OK too....

I think it can still be done. But it's going to take one hell of a commitment. And I doubt you'll get rich at it.

[katuuuz]

Well I understand why the arcades died, I just don't understand why they had to.  It's too bad they are now categorized as "secondary attractions."  Every time I see a classic arcade game ported for download on XboxLive or PS3 marketplace, I just shake my head in dismay.  Granted I too am a console gamer, I would still support a local arcade had I one to support.  "We can play online and talk through a headset."  That is nothing in comparison to kicking the ---steaming pile of meadow muffin--- out of your buddy in Street Fighter and then elbowing him in his ribs...  Or talking your sister into getting a prize that you like with all of her hard earned tickets.  I'm almost too stubborn to open a laser tag just to "sucker" people into my real dream.

Maybe it's just us who think like this though.  

What if I, in some way, were to collect a large amount of really classic arcade cabinets over the course of a few years... I'm talking about Pong, Galaga, DK, etc. and aimed my business at today's dads.  The 25-45 year-olds who have lived the experience.  Serve beer, and just have classic games they grew up with.  Hook up a Sirius radio system with the 80's channel on heavy rotation...  Granted I may be shooting myself in the foot by sectioning off a particular user base, but I know there has to be a ton of people in that age range that would eat it up.  Get away from the family and work, and go back in time 20 years to their childhood.  Maybe it's just a pipe dream, but I think if it was done/pitched right, it could be big.  Employ washed up 80's bands once a month for next to nothing due to their fizzled out careers...  Just go all out so that when you walk through the doors, you'd be convinced it was 1987.  I would actually be willing to do that indoor virtual golf along with it.  If I had to do something, that was a good idea.  I'd just hate to give up on it.  I'm convinced it could work if it was done right.

**edit:  And if Microsoft and Sony are offering these old arcade games for download, there has to still be a demand to play them, no?  And I'm not looking to retire on this idea.  If it can maintain itself it would be worth it. 

[Epyx]

What if I, in some way, were to collect a large amount of really classic arcade cabinets over the course of a few years... I'm talking about Pong, Galaga, DK, etc. and aimed my business at today's dads.  The 25-45 year-olds who have lived the experience.  Serve beer, and just have classic games they grew up with.

Speaking as a Dad...the main problem with this is one of time...most of us are here with this hobby because it allows us to maximize time by having cabs at home in a gaming room or basement where we can retreat to and whiddle away precious minutes/hours.

I think the sad reality is that arcade collections are fringe among us now and no longer mainstream. The good news is, many of the members have contributed to preservation of these nostalgic beautiful cabs...which is exactly what you would be doing...just not making a lot of money doing it

I mean if you were in my neighbourhood i'd show up as often as I could and a few others might as well but the mainstream...the ones that were us back in the day...the teens of today would rather be on their Xboxes/PS3s/PCs than in an arcade.

[IG-88]

@ katuuuz I've been thinking about this. This is still America. If you want to do this and make it work then go for it. It will not be easy, but if you want it bad enough then try it. And if it don't work or you don't like it after all then at least you can say you tried.

I know when I first went into business for myself (not an arcade, never thought of it) I did alot of research. First off don't take advice from people that have failed at it. They obviously didn't do something right. Or from people that theorize about it either. Start out on the web and find places that are still in biz and succeeding and ask them about their business model. If you aren't in the same geographical area then you won't be competing with them. Explain what you want to do. Do you have a SBA in your area? Ask them for help. I hate this defeatist attitude people love to spew everytime this subject comes up.   

I like the idea of catering to 45 yr old dads. Personally I think this generation is going to have more and more time on their hands. (and more  $$) A few years and my kids will be gone. I already have more time than I did when they were toddlers.

You probably aren't ready to compete financially with the big chains. Find a niche market and capitalize on it. Don't give up yet.....

[CheffoJeffo]

I hate this defeatist attitude people love to spew everytime this subject comes up.  

I don't think that ANY of us like having to be negative about proposals like this -- some of us have considered and even helped with initiatives like this in the past -- but reality is what reality is and those with less experience deserve to know about that reality before they charge off.

I like the idea of catering to 45 yr old dads. Personally I think this generation is going to have more and more time on their hands. (and more  $$) A few years and my kids will be gone. I already have more time than I did when they were toddlers.

It is an interesting idea, but how big is that demographic in his market ? It sounds like he is in a smaller market, so that may be a problem. OTOH, being in a smaller geographic market may have advantages -- less competition and easier to be a destination.

There is a guy opening an arcade museum here in town (city of 3+million) and he has an AWESOME (in terms of titles) collection, including some very rare machines. I want to support him, thought about sitting on the board and am considering loaning machines for an exhibit. I would be surprised, however, if I end up going there even once a month because it is quite a haul for me across the city to get there.

While finding a niche and having a rough business plan are important, I think we're putting the cart before the horse here.

To my mind, the very first thing that the OP needs to do is to learn more about arcade machines -- particularly how to fix them. It isn't like you can dial 1-800-FIX-VIDS and the repair genie shows up.

EVERY machine will break and will need to be fixed. He may be able to ship some stuff out for repair, but that still requires some knowledge and it gets expensive relative to earnings fast. Pinball is worse. I dunno nothing about redemption, but I can't imagine they're much fund to maintain.

 

[RayB]

To add to Cheffo's mention of the museum. The owner (from the impression he's given) is pretty financially well-off, so this venture is more "fun" than business risk. Just wanted to mention that in case anyone was thinking of doing the same but bankrolling it off loans.

[IG-88]

I wholeheartedly agree that the OP needs to learn to work on the machines. I did say it wouldn't be easy. But really, were not talking rocket science here. If I can learn how to fix these then about anybody can. They aren't all THAT complicated.

And as far as going for a startup business loan, he better have a damn good business plan down on paper that shows that this can make somewhat of a profit or no bank in their right mind is going to give out any $$. Instead of a loan, why not save up the money to bankroll it using cash?

I like the museum bit too. Personally if there was a place anywhere like what Cheffo was saying within 45 min of me I'd be visiting alot more than once a month. (I think)

Maybe he could file for an exempt 501 C? I think there is a section that covers Social and Recreational Clubs. That would help come tax time considerably....no?

[CheffoJeffo]

I like the museum bit too. Personally if there was a place anywhere like what Cheffo was saying within 45 min of me I'd be visiting alot more than once a month. (I think)

That's what I thought, but after making the drive a couple of times and given the fact that I have 20 games here (many making repair demands on my spare time), it isn't as attractive an option as I thought it would be. Part of the reason is that the location he ended up at isn't all that convenient for me to get to

An example of a recently opened (a "soft open" -- they haven't officially launched) arcade museum in McLean, IL, operated by Vectorman from KLOV:

http://www.vintagevideogames.com/

It is doable, but I think that RayB is dead on about financing.

[Dartful Dodger]

An example of a recently opened (a "soft open" -- they haven't officially launched) arcade museum in McLean, IL, operated by Vectorman from KLOV:

http://www.vintagevideogames.com/

Too bad, that's over 2 hours away from my house.