Namco arcade partnership / Thinking of stating arcade and food biz.

[rlemmon]

Hi guys. I know that some of you have thought opening an arcade business of sorts. I have been thinking allot about this as well.

My basic concept is a 80's themed arcade/ pizza place focusing on great games ( both old and newer) and great food. The idea is to have 80's decor and music much like the 50's places you see. I live in an area with a population of 7000
people. There are 3 elementry and two high schools within 10 miles of here.

I was reading about the namco arcade partnership program.

http://www.namcoarcade.com/busdev_faq.asp

Does anyone know anything about this. I wonder how the profit sharing goes if its 50/50 or what. This seems like it could be a good way to go beings that you would have no cost for buying or repairing your games and you could rotate you selection at any time.

Another thing would be that you would have a much lower start up cost and access to newer and more expensive racing and simulator type games with out dropping 10 k or more.

What do you think guys ?
Thanks

[Kevin Mullins]

Not that I know all the details.... but from what little I do know it's a similar plan to like what you see at the movie theaters, Wal-marts, bigger pizza joints and such.
I forget what the split is for profits. The technician that services those machines gets a cut also. (like 30%) (I almost went to work for them)
I would defineately try to contact the district manager for your area and see if "service" would be an issue first. Meaning is there anyone close enough that can actually service the equipment when needed. My area has only one "Namco" arcade, and they can't keep up with their own place.

But otherwise sounds like it could be a good starting point if you play your cards right with them. Maybe offer to do the service yourself and get that cut of it too.   

[shardian]

There are independent vendors in pretty much any city in the country. They can hook you up with games just the same.

[Jeff AMN]

A couple of years ago I considered getting a home equity loan (I could get aroung $90k) and starting up a videogame store. I planned on offering all the modern consoles, retro games, magazines, music, DVDs, and setting up a mini-arcade. I also entertained the thought of selling pizza and drinks. I got really excited about everything until I looked into the legal requirements and the profitability of such a venture.

To offer food I would need to jump through all the hoops of a restaurant.
To offer games I would have to deal with distributors since small businesses don't get direct buying power.
To offer arcades I'd have to get an amusement license from the city...which is VERY hard around here.
To make enough from the arcades to be worth my while, I'd need many games (typical games bring in around $5k a year and you have to split that).

In the end I just didn't think I'd be profitable enough to justify the risk of failure. I live in a great area to pull it off, but the last thing the city wants here is an arcade/teen hangout spot. I I were single, and just a few years younger, I might still go for it, but now that I have a mortgage and a wife I gotta be a bit more level-headed in my business decisions.

If you have the means and desire, good luck! I'd like nothing more than to hear that you were able to pull it off.

[Ken Layton]

Hi guys. I know that some of you have thought opening an arcade business of sorts. I have been thinking allot about this as well.

Are you crazy??? Lots of arcades have folded. There's no money in most of them anymore.

My basic concept is a 80's themed arcade/ pizza place focusing on great games ( both old and newer) and great food. The idea is to have 80's decor and music much like the 50's places you see. I live in an area with a population of 7000
people. There are 3 elementry and two high schools within 10 miles of here.

Doesn't sound like enough population to make it worthwhile.

I was reading about the namco arcade partnership program.

http://www.namcoarcade.com/busdev_faq.asp

Does anyone know anything about this. I wonder how the profit sharing goes if its 50/50 or what. This seems like it could be a good way to go beings that you would have no cost for buying or repairing your games and you could rotate you selection at any time.


50/50??? ha ha. A big company like that is going to take 60 to 70% of the income in order to pay for the machines, rotations, repairing/maintenance, insurance, and licenses. Don't think that you're going to have any say in what games get rotated. The company will rotate what it feels should be rotated and when it gets rotated. The company is taking a risk so it's entitled to a bigger cut of the machine income.


Another thing would be that you would have a much lower start up cost and access to newer and more expensive racing and simulator type games with out dropping 10 k or more.

Yeh, but the company is interested in making the most amount of money the fastest. If there's not enough population they can't make their money fast enough for them.


What do you think guys ?

Well it doesn't hurt to ask. You should look for a building with cheap rent because the income for the games won't pay the rent. You need food sales/service, but that involves the health department and that could get expensive. And don't forget insurance! Somebody could get a tomato slice caught in their throat and sue you. Some jurisdictions require both the game operator AND the location owner to buy the game licenses. Look in your local telephone directory Yellow Pages under the heading of "Amusement Devices" to find a local game operator. Tell him your proposal. Don't be surprised if he laughs at you. But then again you may find one who's willing to give you a try.

I just started working for Premier Amusements. They are a national game operator for Cinemark Theatres and are headquartered in North Richland Hills, Texas. They have me service & collect money from the gameroom they operate at the local Olympia, Washington 14 plex theater. I can't go into details about the operation because I'm bound by a confidentiality agreement. In my own personal opinion though I don't think this gameroom is going to make it. Heck, even the "TILT" arcade pulled out of the mall last year after being there from the mall's very first days in 1978. Tilt couldn't make money there anymore. The mall had jacked the rent up to $10,000 a month! Anyway, Premier Amusements operates gamerooms in many states so I'll put in a plug for them. Contact them at 1-800-795-4643 or (817) 393-9300 and see if they'll do a gameroom for you.

[shardian]

I just started working for Premier Amusements. They are a national game operator for Cinemark Theatres and are headquartered in North Richland Hills, Texas. They have me service & collect money from the gameroom they operate at the local Olympia, Washington 14 plex theater. I can't go into details about the operation because I'm bound by a confidentiality agreement. In my own personal opinion though I don't think this gameroom is going to make it. Heck, even the "TILT" arcade pulled out of the mall last year after being there from the mall's very first days in 1978. Tilt couldn't make money there anymore. The mall had jacked the rent up to $10,000 a month! Anyway, Premier Amusements operates gamerooms in many states so I'll put in a plug for them. Contact them at 1-800-795-4643 or (817) 393-9300 and see if they'll do a gameroom for you.[/i]

Well if they wouldn't overload with overpriced, low entertainment games then they could possibly make money. The local Chuck-E-Cheese charges a token per game, regardless of the game. They had a RCT pin that was messed up in many ways. Normally I would put my 50cents in it and be pissed off. Since it was so cheap, and set up for 5 ball mode. I ended up putting like $3 in it.
Sorry for the rant, but most arcades are screwing themselves in recent years.

[Ken Layton]

Even the huge (30,000 square feet) "Illusionz" aarcade in Issaquah, Washington couldn't make it. They even had full restaurant setup there. The auction was yesterday.

[Jeff AMN]

Well if they wouldn't overload with overpriced, low entertainment games then they could possibly make money. The local Chuck-E-Cheese charges a token per game, regardless of the game. They had a RCT pin that was messed up in many ways. Normally I would put my 50cents in it and be pissed off. Since it was so cheap, and set up for 5 ball mode. I ended up putting like $3 in it.

Sorry for the rant, but most arcades are screwing themselves in recent years.

I agree with that last statement big time. We know that there are MANY more factors in the downfall of arcades, but the higher prices on plays is what is keeping people from continuing to play what is still out there. When I go to the local Nickelcade, I spend more than I do in a typical arcade.

[ChadTower]

It doesn't make a ton of sense to look at an industry where 99% of locations have failed and long since disappeared and say "I want to stake my financial future on running one of those".

If you want to try an 1984 style thing, great, but remember that none of those guys has their income deriving from that place and it is also a large team effort.

[bleargh]

We know that there are MANY more factors in the downfall of arcades, but the higher prices on plays is what is keeping people from continuing to play what is still out there. When I go to the local Nickelcade, I spend more than I do in a typical arcade.

I'm with ya here Jeff.  At a quarter a game I'd play all day.  At a buck (or more) a game, I don't even bother looking at them any more.  Any surprise that I decided to build my own?

[shardian]

We know that there are MANY more factors in the downfall of arcades, but the higher prices on plays is what is keeping people from continuing to play what is still out there. When I go to the local Nickelcade, I spend more than I do in a typical arcade.

I'm with ya here Jeff.  At a quarter a game I'd play all day.  At a buck (or more) a game, I don't even bother looking at them any more.  Any surprise that I decided to build my own?

What REALLY pisses me off is when I decide to go ahead and try a game that costs a $1 and it is broken/doesn't work quite right. We were at Billy Bob's one day and me and a buddy decided to try the motion capable Tokyo Cop and guess what, the seats did not move, and the game SUCKED. With the pedal mashed, you can't even catch the bad guy on easy. Get this, you have to get a pin, play the game a bunch of times in order to get a car fast enough to win. Crap like that is what killed off arcades for good after the brief resurgence in the 1990's.

[Kevin Mullins]

decided to try the motion capable Tokyo Cop and guess what, the seats did not move, and the game SUCKED.

Ironic... we have one of those where I work and I was helping fix the monitor on it when I noticed it should have motion. The actual tech there never even noticed that it didn't move. So I have him go itnto the settings menu and sure enough..... it was OFF.
I can't stand it when a game is on location, turned on, yet not fully functional. Especially when you drop a dollar in the damn thing.

As for the business venture type thing..... I have thought of this idea many times over myself. But I've always realized that a big scale operation just won't work and last very long due to overhead. My idea was to keep it on the smaller scale (I live in a small town) and do it for the entertainment value of it...not as a sustainable income source. Kinda like a part time thing, open a couple evenings and weekends. We have lots of kids with nothing around to do and nowhere to go. (unless you count tippin' cows and stealing street signs "something to do")

[StephenH]

San Diego still has some arcades.  There is a Tilt, a Nickel City, one in Boomers, one in Sea World, a Dave & Busters, and some Chuck E Cheeses!

I personally beleive some of them do well.  I think part of the key is location and who you are appealing to.   Additionally, the age of who you are appealling to matters, too.   For example, Chuck E Cheese appeals more to younger kids, where Dave & Busters appeals more to adults.   Many of the ones open today are close to something else to drive business to the area, such as a movie theatre, a resturant, a mall, or a bigger shopping area.

I agree that many arcades have closed, but some that are left seem to do well at least in my city.   I think your best strategy may be to determine the age of who you want to appeal to, and create an enviornment that reflects this.   Additionally, you may want to locate near some other thing that will bring in a lot of business.

[SirPeale]

I can't stand it when a game is on location, turned on, yet not fully functional. Especially when you drop a dollar in the damn thing.

A lot of times it has to do with the locations owner.  More than once when I was still working for the company I did, when we would drop off say...a RevX or a Terminator 2 game, we'd have to pull the gun recoil fuse because the owner would say "turn that racket off!"  More than one location made us turn the volume on game either completely off or to it's lowest setting that still made noise.

[Kevin Mullins]

I could understand that to a degree if the games are located in say a resteraunt location, or even at some convenient stores, laundry mats, etc.

But NOT at an "arcade" type venue.
The one I mentioned with the motion turned off was at a Family Fun Center type arcade.

[rlemmon]

Thanks for all of your input guys. I would love to make a go of it but I think the area may be too small unless i concentrated more on the food aspect.

[Havok]

Why not just restore maybe 5 classics, concentrating on the food aspect and add more machines if they prove to be profitable?

[Howard_Casto]

My 2 cents.. food around arcade games, especially classic games that might have hard to find/repair parts is a BAD idea.  Now putting a few pos machines in a burger joint might work, but you can't have a serious, restored arcade and a food place in the same building.  Pick one and go all out.

I don't think anyone would have the capital to do a real classics arcade joint properly.  Imho the only way to do it and make money would be to make it more of a living museum.  Have all kinds of fully restored games, and not just generic games, the really wierd ones too.  It would have to be done museum style too...  each game including it's original flyers/promotional material along with some historical info.  The thing is, nobody would be interested if it were just a few dozen, you'd need at least a few hundred to make it a tourist attraction, which is the only way an arcade could survive in the U.S, by making it into a glorified "giant ball of yarn".

[Ken Layton]

Actually just put a a few signs up, "No food or drinks on or near machines".

[Howard_Casto]

Actually just put a a few signs up, "No food or drinks on or near machines".

Yeah, and try enforcing that, especially considering the only people that really gum up machines are kids, and they never follow the rules (if they can even read). 

[cowguy]

You could always think about moving to Japan, Arcades there are like Americas consoles.

[Ken Layton]

And here's a dose of reality in today's arcade world:

http://forum.arcadecontrols.com/index.php?topic=68679.0