Arcade Owners/Operators - Help!?

[onReload]

I live in a city where there's one arcade. Recently, they acquired Super Street Fighter IV Arcade Edition from the tips local players gave them - it was a hefty $13k as I hear it, and they were charging $1 a game - expensive, but fine by me, as arcades need the help they can get, and not many places have this game.

After 2-3 weeks, the owner took it out. He said that, this past weekend, it only made $47, and too many people were whining about the $1 price. Last year, I spoke with the owner on his arcade, and it seems like redemption games are what keeps the business afloat. I'm told they're having a staff meeting on Wednesday, and it could be about more than just the SSFIVAE fiasco - might be about the place going under. There's only so many of us dedicated fans...

When I was living in Northern New Jersey, I saw two beloved local arcades close down. I really don't want that to happen this time.

I'm asking for advice from those in-the-know - anybody who currently or has previously owned/operated an arcade. What keeps the business going? The arcades that have survived the major wave of disappearances - how did they do it, and what has changed? The owner has shown that he is open to suggestions, and I also know some of the staff members.

Sorry for being vague on the place's details - I'm not sure if anyone knows the place I'm referring to, and I don't want to throw the name around, that's all. I don't mean to be rude, but please avoid wild speculation - I'm hoping that amongst the members here on Digital Press, there's a few real experts, and I'm looking forward to hearing from you.

Thank you!

[DreamTR]

I live in a city where there's one arcade. Recently, they acquired Super Street Fighter IV Arcade Edition from the tips local players gave them - it was a hefty $13k as I hear it, and they were charging $1 a game - expensive, but fine by me, as arcades need the help they can get, and not many places have this game.

After 2-3 weeks, the owner took it out. He said that, this past weekend, it only made $47, and too many people were whining about the $1 price. Last year, I spoke with the owner on his arcade, and it seems like redemption games are what keeps the business afloat. I'm told they're having a staff meeting on Wednesday, and it could be about more than just the SSFIVAE fiasco - might be about the place going under. There's only so many of us dedicated fans...

When I was living in Northern New Jersey, I saw two beloved local arcades close down. I really don't want that to happen this time.

I'm asking for advice from those in-the-know - anybody who currently or has previously owned/operated an arcade. What keeps the business going? The arcades that have survived the major wave of disappearances - how did they do it, and what has changed? The owner has shown that he is open to suggestions, and I also know some of the staff members.

Sorry for being vague on the place's details - I'm not sure if anyone knows the place I'm referring to, and I don't want to throw the name around, that's all. I don't mean to be rude, but please avoid wild speculation - I'm hoping that amongst the members here on Digital Press, there's a few real experts, and I'm looking forward to hearing from you.

Thank you!

It would help if you said the name of the place because you can't really do much for you until someone knows the area.

Eight on the Break? University Pinball? Something else? I own an arcade and a LOT of stuff is put into this.

We also have SSFIVAE as well and it is making a lot more than that...


Another thing...games have been 100 Yen and more in Japan for a LONG time. I don't see how players here feel that 25 years later they should still be paying 25 and 50 cents. Shit is called inflation. If the game was played 6-7 hours a day for 6 months straight SSFIVAE would only break even.

[onReload]

Sorry, DreamTR - it's University Pinball in Philadelphia, yes. Which is your arcade?

Billy (the owner) put it back on the floor; we had a good tournament for it, a 50c week, etc...so hopefully it will remain out there (there was also a bit of buzz for the newly-unlocked characters)

I've known that it's 100y in Japan for awhile, now. I think the problem is that my generation (late teens to mid/late twenties) started playing fighting games in a time where most of the titles in arcades were older (as fewer new titles were debuting), and therefore cheaper. Please correct me if I'm wrong.

So, although I went to an arcade frequently as a younger kid (Sportsworld, Paramus, NJ, R.I.P.), I didn't really have an idea about the prices, because I didn't have to manage my own money. The people whining about the pricing of SFIV aren't old enough to have known prices from 25 years ago, frankly

I personally don't think $1.00 is too much, and I don't think they need to lower MvC2 or SFIII:3S to $0.25, but I suppose there were more than enough new people to the scene - since in '08/'09, SFIV really expanded the fighting game community - to feel they had a right to lower prices. I know it's stupid, but what can you do? Not to mention, console-exclusive Marvel vs. Capcom 3 is going to kill the fighting-game-as-arcade-goer-scene.

Your thoughts?

[Baloo]

As someone who lives in the Philadelphia area and has been to University Pinball, I must say that the business as it is right now can't really survive.

For one, arcades in this day and age need to be in locations with a lot of foot traffic, such as amusement parks and malls. The fringe of a bad residential neighborhood is not a good place for an arcade. You can say it's not terrible around there because of the colleges and the businesses and whatnot nearby, but I sure as hell wouldn't send my kids around there alone, especially not at night. And kids are still the main customers of arcades. They've got money to blow. So if you don't have their business, you're pretty much done. I believe there was even reports of a young girl being kidnapped and killed at the arcade. The location, frankly, is bad.

Secondly, the selection of games is frankly terrible since the fire they had. Most of the great fighters they had there are now gone, replaced by crummy redemption games and racers. There's no classic games even, I think all they have is a Ms. Pac-Man/Galaga machine. University Pinball doesn't even live up to it's name with a mere two pinball machines, which aren't anything special either. You can get big name games like Blazblue and Street Fighter IV, but people aren't going to waste gas/bus fare just to play one game, and the people who are going there to play fighters are not going to want to play redemption games either. With the lack of space they have, you can't really cater to both parties here. If they're trying to do that, then they need to at least put a couple of better games in there. Maybe 1-2 more pins, hell even an Ultracade cab would be nice.

So if there's not enough games for the hardcore people, and the games you have really only draw kids that can't come around to that neighborhood, then what kind of clientele do you have left really?

And The price of arcade games is one of the main reasons why arcades are suffering in this day and age. People's mindsets has adjusted to inflation in the economy when it comes to arcades. Games are still a lousy quarter or 50 cents, anything more than that and people are reluctant to pay. I'll admit I wouldn't pay $1 for 2 rounds of Street Fighter, there's just not enough gameplay. You could blow $20 in a mere half-an-hour or so that way.

Overall, University Pinball really needs to either move the location, get some MUCH better games, or simply close down. Because what they're doing right now is not efficient.

[kirbykirb]

The Arcade business model is one that is doomed for extiniction.

This is because an arcade relies heavily on foot traffic; and most are in horrible locations due to lease costs. For example, a 1500 sq ft place in a busy area (e.g. by a main grocery store that draws in 200+ people an hour) can easily cost minimum $2500 a month, combine that with the bills, such as insurance ($150-$300 a month), electricity ($400 a month + depdening on draw, A/C, and efficency, def can go higher due to arcades mostly being old fashioned CRT's). This means there is atleast a monthly incuring cost of $3000, $36000 yearly. And this does not take in consideration the costs of the cabinets, service, maintaince and employees. You would need atleast yourself and perhaps one employee, at 40 hours a week at $8/hr that is $320 weekly. $1280 monthly, which draws on more expenses. Most arcade owners go the route of the cheaper lease; which always usually mean being in a worser location or having less square footage space which is death to an arcade. If no body knows your business exists; they won't go to you. And if even you are in a good location but can only pack 10 cabinets in a relaivley small space; people won't go because they are packed an it does not offer the expected enviorment.

And the main deciding factor the customer: the main arcade customer of the past was a teenager individual to young adult; that did not have access to the Internet (for Roms/piracy/onling gaming such as MMO's) and teenagers/Young adults that were not particulary wealthy, but always had $4-5 bucks that could last them an hour or two at the local arcade playing a multitude of games. Perhaps even longer.

This is different nowadays because of the increased availability of home gaming consoles and portable gaming which now even includes cell phones that are powerful enough to run emulators. A wii can be purchased brand new for less then $190 at walmart, and less then $150 used. And it allows games from all generations; even once arcade only games to be played.

This affects arcades because everyone knows and understands that arcades are a retail enviroment, which means at default you are paying a higher price then you should've. It also means the uniqueness of an arcade can not rely simply on the games they have but in the enviorment they are in. To many times I've seen arcades that offer generic enviorments powered by fleurscent lights or perhaps the ones that try to be edgy and offer darkout/black out enviorments with neon and more.

Nowadays, to even attempt to break even; arcade owners go with $1 gaming+. For example DDR arcade games are/can be purchased at less then $4000. This would mean, just to pay the price of the machine it would take 4000 minimum plays. If theres just 5 plays a day, that machine is only making $5 bucks, 5*7 is $35 weekly. $140 monthly, $1680 yearly if it's steady (it never is).

Revenue is simply not there anymore. Arcades are no logner designed to survive soley based on their own merits, but to be combined in high foot/customer walk in areas such as the back row of restarunts. Game stores, Dentists offices/waiting rooms and places which main souce of revenue is not based soley on the arcade cabinet but as a way to increase passive income over a set period off time.

And now, here will come the people that'd curse me with their anger saying I have no idea what I'm talking about because I simply disagree with them.

[DreamTR]

My arcade is Game Galaxy in Nashville, TN.

Biggest reason why we do ok is because these games are my collection. I don't consider them part of an "investment" so the place makes money and pays the bills and my stuff gets played and people enjoy it.

Here's the thing though:

People WILL spend 50 cents to a $1 on new fighting games. They aren't there to play the computer in them, they are there for the comp. That is what drove SFII and MK and KI and Tekken for years and still holds true. If it is exclusive you have a window to make money and people WILL show up.

Classics are purely nostalgic. People expect to pay 25 cents from 1981 to 2011, 30 freaking years later. You have to be kidding me. We have tons of classics in there but I started moving out the good stuff because it's not worth it to keep them running.

People come in and say how much they love the place and won't spend a quarter after walking around admiring for 20 minutes.

We do ok because we have a variety. 12 pins, drivers, fighting games, Japanese games, all sorts of stuff, and you NEED console fighting games as well to drive repeat players and tournaments....and we have a game store in the place too. All of that means you can have your arcade and still eat, LOL

[kirbykirb]

My arcade is Game Galaxy in Nashville, TN.

Biggest reason why we do ok is because these games are my collection. I don't consider them part of an "investment" so the place makes money and pays the bills and my stuff gets played and people enjoy it.

Here's the thing though:

People WILL spend 50 cents to a $1 on new fighting games. They aren't there to play the computer in them, they are there for the comp. That is what drove SFII and MK and KI and Tekken for years and still holds true. If it is exclusive you have a window to make money and people WILL show up.

Classics are purely nostalgic. People expect to pay 25 cents from 1981 to 2011, 30 freaking years later. You have to be kidding me. We have tons of classics in there but I started moving out the good stuff because it's not worth it to keep them running.

People come in and say how much they love the place and won't spend a quarter after walking around admiring for 20 minutes.

We do ok because we have a variety. 12 pins, drivers, fighting games, Japanese games, all sorts of stuff, and you NEED console fighting games as well to drive repeat players and tournaments....and we have a game store in the place too. All of that means you can have your arcade and still eat, LOL


Heh, I don't mean to be rude but do you see more sales in the game store rather then in the arcade?

[DreamTR]

Heh, I don't mean to be rude but do you see more sales in the game store rather then in the arcade?

It varies...sometimes yes, sometimes no...since we have Super Street Fighter IV Arcade it's about 75% arcade now 25% console sales but before that it was 50/50

[kirbykirb]

It varies...sometimes yes, sometimes no...since we have Super Street Fighter IV Arcade it's about 75% arcade now 25% console sales but before that it was 50/50

Wow, its pretty amazing how just one cabinet can make profit gains, especially of 75%(25% gain). Do you think you're in a good location? Or is the SSF4 arcade bringing in walk in traffic that see you're more then just an "arcade" and generate business?

[onReload]

Glad to know you know your stuff, DreamTR, and I'm glad you brought up the in-house console thing. I don't know what UPinnball's management thinks of that sort of thing, but they did have some of the things Baloo mentioned - supercade, better fighters...the thing is, not much stuff is going arcade-exclusive. everyone knows capcom is going to bring those arcade changes to the home system, it wouldn't make sense from any profit-oriented standpoint not to....so i guess if i really want them to stay in-business, I'd have to explain the public-console thing.

technology has just led us down this road; not that I hate scientific advancements in these fields. to point one particular finger: the internet isn't just coddling players for online gaming; it's also the fact that players can say "i'm broke, the arcade is too much, let's all meet somewhere" since the console port is so much closer to the arcade game...much closer than back in '92. the game designers are working to satisfy the console market AND console technology. the "tournament standard" isn't an arcade board anymore - how many of these new games are using PC technology inside anyway?

so, to me, that kills a lot of the competitive aspect...i hated it, really, because i made many friends at an arcade playing DDR - something you couldn't properly emulate at home. when i started getting into fighting games, i felt like the philadelphia scene was so closed off, because everybody already knew each other; if they go to the arcade, they announce when etc., because it's not worth it to show up randomly - you end up wasting your money on one or two challengers then you play the CPU. that aspect of searching for new competition is gone, the way things stand.

so, DreamTR, i'll try to sound a bit more proactive - how do you personally run your game consoles at Game Galaxy? is there a standardized way to do it?

[Leo_A]

Personally, I'd be inclined to spend more in total if plays were more reasonable, 25 or 50 cents, than I would at a dollar.

I don't know about anyone else, but blowing $5 in a arcade and getting at least 10 games if it's 50 cents is a lot more attractive than a dollar a game and 5 games for that money. I probably wouldn't even go in (Unless it had some nice classics) if games were $1 and I certainly wouldn't make a return visit after discovering that.

Just something to keep in mind when thinking about prices since a lot of people go into an arcade thinking about spending a certain amount of money to have some fun, not the number of times they're going to play. So if they planned to hang around and spend $5, many would end up spending the same amount at 50 cents as they would at one dollar. And at 50 cents (Or even 25 cents), you're encouraging return visits since it's more economical and you're helping keep your customers there longer, which helps spur on the competition that's been mentioned already as an important factor to arcades.

Getting their money quick at $1 a play just drives them out the door that much quicker and makes it less likely that competitive spirit that makes people keep putting quarters in to beat the other guy will ever develop. Two people have to be at the arcade at the same time for a competition and decreasing the length of their stay makes it that less likely the visits of any two customers will ever overlap.

The only time it even remotely feels like I'm getting my money's worth at $1 is with a sitdown arcade racer.

[DreamTR]

Wow, its pretty amazing how just one cabinet can make profit gains, especially of 75%(25% gain). Do you think you're in a good location? Or is the SSF4 arcade bringing in walk in traffic that see you're more then just an "arcade" and generate business?

No, location is not great. We are inside a mall, but it's a VERY dead mall (Hickory Hollow Mall) we are just fortunate that weekends exist and people know about us. Also, this spot has been an arcade since 1978 anyway. (Gold MIne/TIlt)

SSF4 brings more walk in traffic. People see them playing and the Arcade Version is not out on console. We had the same thing happen when Blazblue and Tekken 6 were arcade exclusive as well.

[DreamTR]

so, DreamTR, i'll try to sound a bit more proactive - how do you personally run your game consoles at Game Galaxy? is there a standardized way to do it?

I do $2 for 30 minutes, $3 an hour, $6 all day. We also have XBOX Live and PSN online hooked up so you can play various fighting games against everyone online as well. We also have a VEWLIX Arcade Machine modified as an XBOX 360 system so it looks like an arcade but you can hook up your controllers to it. Console section does about 10% of our business.

[DreamTR]

Personally, I'd be inclined to spend more in total if plays were more reasonable, 25 or 50 cents, than I would at a dollar.

I don't know about anyone else, but blowing $5 in a arcade and getting at least 10 games if it's 50 cents is a lot more attractive than a dollar a game and 5 games for that money. I probably wouldn't even go in (Unless it had some nice classics) if games were $1 and I certainly wouldn't make a return visit after discovering that.

Just something to keep in mind when thinking about prices since a lot of people go into an arcade thinking about spending a certain amount of money to have some fun, not the number of times they're going to play. So if they planned to hang around and spend $5, many would end up spending the same amount at 50 cents as they would at one dollar. And at 50 cents (Or even 25 cents), you're encouraging return visits since it's more economical and you're helping keep your customers there longer, which helps spur on the competition that's been mentioned already as an important factor to arcades.

Getting their money quick at $1 a play just drives them out the door that much quicker and makes it less likely that competitive spirit that makes people keep putting quarters in to beat the other guy will ever develop. Two people have to be at the arcade at the same time for a competition and decreasing the length of their stay makes it that less likely the visits of any two customers will ever overlap.

The only time it even remotely feels like I'm getting my money's worth at $1 is with a sitdown arcade racer.


I'm not sure how 25 cents and 50 cents is supposed to be reasonable now with inflation. People are so spoiled by that 25/50 thing from the 80s. I mean, what do you think when you go and get food, go to the movies, get gas? Why does the "arcade" have to be 25 cents and 50 cents still. It's highly illogical.

We do charge 25 cents for everything except drivers which are 50 cents, but SSF4 Arcade is 75 cents. Still cheaper than basic Japan 100 Yen ($1.18 or so a play) and the game was $15,000.

Not sure how games should be that cheap still when you have a very small window to make your money back on it...

Competition they are going to play anyway. If we're the only place in 6 states with it, they are going to pay whatever it is to play the game. 75 cents is HIGHLY reasonable all things considered.

This return play thing you are talking about..we're the only "real" arcade in the state, LOL...I mean, entertainment wise it's cheaper than anything available. $3 here and $3 there from a return customer but that doesn't pay the bills always and with maintenance on machines it makes absolutely no sense.

I just know this. With a new game $100 a day is a lot better than $50 a day.

[kirbykirb]

I'm not sure how 25 cents and 50 cents is supposed to be reasonable now with inflation. People are so spoiled by that 25/50 thing from the 80s. I mean, what do you think when you go and get food, go to the movies, get gas? Why does the "arcade" have to be 25 cents and 50 cents still. It's highly illogical.

We do charge 25 cents for everything except drivers which are 50 cents, but SSF4 Arcade is 75 cents. Still cheaper than basic Japan 100 Yen ($1.18 or so a play) and the game was $15,000.

Not sure how games should be that cheap still when you have a very small window to make your money back on it...

Competition they are going to play anyway. If we're the only place in 6 states with it, they are going to pay whatever it is to play the game. 75 cents is HIGHLY reasonable all things considered.

This return play thing you are talking about..we're the only "real" arcade in the state, LOL...I mean, entertainment wise it's cheaper than anything available. $3 here and $3 there from a return customer but that doesn't pay the bills always and with maintenance on machines it makes absolutely no sense.

I just know this. With a new game $100 a day is a lot better than $50 a day.
Wow, 60,000 quarters are needed to make $15K. at a rate of 200 plays a week, = $50 would take 300 weeks to pay off the the cabinet. :|

Ouchie...

[Baloo]

Wow, 60,000 quarters are needed to make $15K. at a rate of 200 plays a week, = $50 would take 300 weeks to pay off the the cabinet. :|

Ouchie...

200 plays a week is a little low, that's only 28 plays a day! No doubt a game like SFIV Arcade Edition is going to get more traffic a day than that, regardless of price.

Personally, I think all this considered 75 cents for an arcade game is reasonable in most cases. 50 cents is perfectly fine. However, $1.00 is stretching it just a little bit. Though I'd gladly pay that for some of the classic racers like Daytona USA and Sega Rally that you don't see around too often anymore. And that's what really is killing the arcades, the price people will pay for a single game vs. the cost of the machines and electricity used to run them. No one is going to want to pay $.75, let alone $1.00 for one game of Pac-Man, or Defender, or Tron. You just don't feel like you're getting your money's worth.

DreamTR, would you say that the arcade portion or the video game sales portion of your store brings in more foot traffic? I know you said most of the money comes from the arcade portion, but what draws in the customers in the first place?

Here in Philadelphia there have been stores that have put a couple of cabinets in (There was a video game store that had 3rd Strike, Marvel Vs. Capcom 2 and a Neo-Geo cab) and the local comic book store has a Six-player X-Men cab, Street Fighter Alpha 3, Spiderman, The Punisher, and a small Jaleco cab (Contains Alien). They also used to have Moonwalker and the Sailor Moon beat-em-up. And I know that every time I'm in the neighborhood I've got to swing by. Perhaps this is a good business model as well, a more of a mix? Customers can come in and notice the machines, and the overhead would be much lower.

It makes you wonder if simply putting in a mix of the most popular/classic arcade games such as SFIV Arcade Edition and Marvel Vs. Capcom and Ms. Pac-Man/Galaga or even pinball machines is a better move in this day and age than running a full-blown arcade?

[skaar]

Maybe if the change machines gave out dollar coins instead of quarters the mind would adjust easier ;)

[DreamTR]

Maybe if the change machines gave out dollar coins instead of quarters the mind would adjust easier ;)

That's the problem, everywhere else in the world they run on dollar coins and people are used to it, here people expect 25 cents for arcade games still. It's just hilarious. Go to Japan, it's more than a $1.00. Game wasn't even RELEASED here, we have to import it, and people want to pay 50 cents? HUH?

[Leo_A]

I'm not sure how 25 cents and 50 cents is supposed to be reasonable now with inflation. People are so spoiled by that 25/50 thing from the 80s. I mean, what do you think when you go and get food, go to the movies, get gas? Why does the "arcade" have to be 25 cents and 50 cents still. It's highly illogical.

We do charge 25 cents for everything except drivers which are 50 cents, but SSF4 Arcade is 75 cents. Still cheaper than basic Japan 100 Yen ($1.18 or so a play) and the game was $15,000.

Not sure how games should be that cheap still when you have a very small window to make your money back on it...

Competition they are going to play anyway. If we're the only place in 6 states with it, they are going to pay whatever it is to play the game. 75 cents is HIGHLY reasonable all things considered.

This return play thing you are talking about..we're the only "real" arcade in the state, LOL...I mean, entertainment wise it's cheaper than anything available. $3 here and $3 there from a return customer but that doesn't pay the bills always and with maintenance on machines it makes absolutely no sense.

I just know this. With a new game $100 a day is a lot better than $50 a day.

I thought I explained the point I was getting at pretty well. But I get the sense you didn't even read what I wrote. It had absolutely nothing to do about any particular price per play for an arcade machine, it was about the methodology for detirmining your pricing to maximize your revenue. He was asking for advice, which I feel like I provided. If you stopped being so sensitive with every post thinking people are criticizing you, I'm sure you'd agree. But instead you leaped to the defensive since you've decided I was saying your prices are too high, or some such nonsense.

You seem to think everyone that goes into an arcade is planning on playing a set number of games (Say 5 games), so setting your prices as high as possible is absolutely necessary since they're just going to play 5 times and you have to get your money while you can.

But from my experience, many people enter an arcade planning to spend a set amount of money while there. Thus, you're going to get that money if the credits are 50 cents or 1 dollar. And the cheaper price while they're spending some amount like $5 is going to encourage return visits since they get more plays for their money and it keeps people there longer while they're spending their $5 which makes it more likely competitive spirit is going to kick in between two random people on something like a SFIV cabinet, which might make them go back to the token machine to exchange a few more dollars.

I was just suggesting that pricing isn't so clear cut and that there are other factors to consider to maximize profitability than just raising the price per play as high as people are willing to accept. There's more to it than just adjusting your prices to be as high as possible, adjusting them for inflation rates, etc. You have to also be concerned about the average plays for a player in one session and encouraging repeat business. I hope the OP actually tries reading what I wrote if he's serious since it's valid advice.


Where did he say that?


From your experience running your own arcade?

DreamTR is the only op who's spoken up in this thread. I'll take his word any day of the week over hearsay and conjecture.

You don't have the first clue what my background is. And the last I knew, it wasn't a prerequisite when having an opinion to actually have first hand experience with the subject.

And I said that because he's clearly only interested in the amount per play. He completely ignores the other half of the equation that is relevant to an arcade operator, since all I ever suggested was that there were two variables you had to concern yourself with when maximizing your revenue, and he disagreed. Now why is it again that you think he doesn't think that?

It doesn't even take any experience running an arcade to suggest that the highest price possible per play isn't necessarily going to yield the most revenue for the operator. And that's all I did... suggest that it isn't so clear cut when it comes to setting your prices.

They earn money through an equation like this...

Cost of 1 Play x Number of Total Plays = Your Revenue

Keeping the first half of that equation as high as possible might be so detirmental to the second half of the equation that it will yield less money for you in the end.

I'm not sure why DreamR thinks that's such an unreasonable statement to suggest that you have to carefully balance the two to maximize the most important value, the money you're earning in the end. It's correct and any business major in the world is going to tell you that there is a legitimate theory there to take into account and that you don't just go in with the theory that you set your prices as high as you think you can get away with.

Believe it or not, it's common sense. Something that is far too lacking in this day and age.

Edit - And I see in another thread that his prices are 25 cents and 50 cents per play with the exception of a single cabinet set at 75 cents.

Gee, who woulda thunk it.

[Arcade Antics]

You seem to think everyone that goes into an arcade is planning on playing a set number of games
Where did he say that?


But from my experience, many people enter an arcade planning to spend a set amount of money while there.
From your experience running your own arcade?

DreamTR is the only op who's spoken up in this thread. I'll take his word any day of the week over hearsay and conjecture.

[Emuaust]

This is quite funny, some people think that paying the same amount they where 20 years ago is a good thing, its not a sustainable business model. Its also usually these same people that get all nostalgic and long for the arcades of old.

When I was running a store and arcade we would run the older machines at a cheap price, arcade racers at $2(aud) for 2 credits and al newer games at $1, maybe outside of USA people are willing to pay for inflation...

[onReload]

Console section does about 10% of our business.
I'm sorry, I should have been clearer on this - I understand your price setup (I finally got smart enough to check your info/sig. and go to your site. You seem to run a gamer's dream, I'd love to be near your arcade.) My question is, how do you control/enforce/take money; I have never seen a public console setup. I'm guessing there's no way to automate it to trigger with a quarter or something, and when you're talking about pay-per-hour or per-diem, then it's certainly got nothing to do with a console mechanic...so is someone specifically in charge of all that? How do you prevent fraud?



Here in Philadelphia there have been stores that have put a couple of cabinets in (There was a video game store that had 3rd Strike, Marvel Vs. Capcom 2 and a Neo-Geo cab) and the local comic book store has a Six-player X-Men cab, Street Fighter Alpha 3, Spiderman, The Punisher, and a small Jaleco cab (Contains Alien). They also used to have Moonwalker and the Sailor Moon beat-em-up. And I know that every time I'm in the neighborhood I've got to swing by. Perhaps this is a good business model as well, a more of a mix? Customers can come in and notice the machines, and the overhead would be much lower.

Yes, you're thinking of Atomic City Comics on South Street. Great place, I'm friends with one of the dudes who works there, so I stop in just to say hi and play some Alpha 3 (I've played Konami's X-Men too many times for it to be worth it, even though it's the awesome 6-player setup). They also have Alien vs. Predator, which is a great beat-'em-up. If you look at the cabs that are off (usually The Punisher), they have a sign explaining that they can't have more than a few (three?) at once, due to noise regulation. This isn't really a problem for University Pinball, since that whole block is under the same ownership...as I hear it, anyway.

Random arcade cabs used to be all over the place - hell, I found a great-condition X-Men: Children of the Atom cabinet on an NJ Turnpike rest-stop...there's an arcade cab in almost every damn one, I tell ya'. The comic shop in Philly just has good taste and a good collection. Everything is somewhat-related to comics; Street Fighter Alpha 3 is a bit of a stretch, but it's the SF series at its most comic-like...you'll know what I mean if you've played it. Also, to owner/operators: why does it seem like the most common cabinet I see nowadays is the Ms. Pac-Man/Galaga 2-in-1? Is it that cheap? Kinda off-topic, I know.

Thanks so much for all the discussion, guys, I really appreciate it.

[ubersaurus]

That's the problem, everywhere else in the world they run on dollar coins and people are used to it, here people expect 25 cents for arcade games still. It's just hilarious. Go to Japan, it's more than a $1.00. Game wasn't even RELEASED here, we have to import it, and people want to pay 50 cents? HUH?

I wonder if it's psychological, in part. Putting in multiple coins for a game vs. a single one feels like more money, even though you know full well it isn't. If arcade machines were built to take in dollar coins (and if those things were actually used more often) I could see that being a viable alternative to the quarter. I imagine that was part of the reason why Gameworks uses the cards; a single card swipe for any machine would thus make you less likely to be concerned about how much the game costs.

Any thoughts on the trend I'm seeing of arcades charging an entrance fee and then having games on free-play or at reduced cost? I know Nickel City did that for years, but now I'm seeing other arcades o'er the land doing the same thing.

[Collector_Gaming]

The Arcade business model is one that is doomed for extiniction.

This is because an arcade relies heavily on foot traffic; and most are in horrible locations due to lease costs. For example, a 1500 sq ft place in a busy area (e.g. by a main grocery store that draws in 200+ people an hour) can easily cost minimum $2500 a month, combine that with the bills, such as insurance ($150-$300 a month), electricity ($400 a month + depdening on draw, A/C, and efficency, def can go higher due to arcades mostly being old fashioned CRT's). This means there is atleast a monthly incuring cost of $3000, $36000 yearly. And this does not take in consideration the costs of the cabinets, service, maintaince and employees. You would need atleast yourself and perhaps one employee, at 40 hours a week at $8/hr that is $320 weekly. $1280 monthly, which draws on more expenses. Most arcade owners go the route of the cheaper lease; which always usually mean being in a worser location or having less square footage space which is death to an arcade. If no body knows your business exists; they won't go to you. And if even you are in a good location but can only pack 10 cabinets in a relaivley small space; people won't go because they are packed an it does not offer the expected enviorment.

And the main deciding factor the customer: the main arcade customer of the past was a teenager individual to young adult; that did not have access to the Internet (for Roms/piracy/onling gaming such as MMO's) and teenagers/Young adults that were not particulary wealthy, but always had $4-5 bucks that could last them an hour or two at the local arcade playing a multitude of games. Perhaps even longer.

This is different nowadays because of the increased availability of home gaming consoles and portable gaming which now even includes cell phones that are powerful enough to run emulators. A wii can be purchased brand new for less then $190 at walmart, and less then $150 used. And it allows games from all generations; even once arcade only games to be played.

This affects arcades because everyone knows and understands that arcades are a retail enviroment, which means at default you are paying a higher price then you should've. It also means the uniqueness of an arcade can not rely simply on the games they have but in the enviorment they are in. To many times I've seen arcades that offer generic enviorments powered by fleurscent lights or perhaps the ones that try to be edgy and offer darkout/black out enviorments with neon and more.

Nowadays, to even attempt to break even; arcade owners go with $1 gaming+. For example DDR arcade games are/can be purchased at less then $4000. This would mean, just to pay the price of the machine it would take 4000 minimum plays. If theres just 5 plays a day, that machine is only making $5 bucks, 5*7 is $35 weekly. $140 monthly, $1680 yearly if it's steady (it never is).

Revenue is simply not there anymore. Arcades are no logner designed to survive soley based on their own merits, but to be combined in high foot/customer walk in areas such as the back row of restarunts. Game stores, Dentists offices/waiting rooms and places which main souce of revenue is not based soley on the arcade cabinet but as a way to increase passive income over a set period off time.

And now, here will come the people that'd curse me with their anger saying I have no idea what I'm talking about because I simply disagree with them.

first off before i get to what your saying

i wanna first say DreamTR how long has your arcade been around?
i was in Nashville visiting a friend in early 09 and going to a heavy metal concert and we were in the need for some gaming fun and asked a local game stop and i could have sworn your arcades name popped up. but we ended up at a bowling ally with a massive arcade within it :|

alright to the quote

i agree with you to a extent
what really is the problem with arcades and their survival these days is as easy as this

as you said emulation through roms on your computers is as easy as a google search away
you can do this as well on your smart portable devices as well
and most consoles now a days can emulate arcade classics and provide some of the newer arcade games as well

But i think a problem that exists just as big as that is people don't go out like they use to

I mean yea you seem to see people shopping just as much as they use to but i think its not as much as we use to see

take for a example japanese arcades do extremely well because theres one thing about tokyo japan we know about that is different then the american way of life

people in tokyo are always on the move. Thats why their apartments are about the size of your standard living room. cause 85% of their lives is on the go so theres no need to have a big apartment when you only spend 15% of your time at home anyways.
That means going along with what you said heavy foot traffic cause the japanese are always on the go and all over hte place

in america its no where near like that anymore. With all these computers and such we prefer to be at home and do our shopping at home, talk to friends at home. do alot of our tasks at home.

[DreamTR]

I thought I explained the point I was getting at pretty well. But I get the sense you didn't even read what I wrote.

You seem to think everyone that goes into an arcade is planning on playing a set number of games (Say 5 games), so setting your prices high is absolutely necessary since they're just going to play 5 times and you have to get your money while you can.

But from my experience, many people enter an arcade planning to spend a set amount of money while there. Thus, you're going to get that money if the credits are 50 cents or 1 dollar. And the cheaper price while they're spending some amount like $5 is going to encourage return visits since they get more plays for their money and it keeps people there longer while they're spending their $5 which makes it more likely competitive spirit is going to kick in between two random people on something like a SFIV cabinet, which might make them go back to the token machine to exchange a few more dollars.

I was just suggesting that pricing isn't so clear cut and that there are other factors to consider to maximize profitability than raising the price as high as people are willing to accept. There's more to it than just adjusting your prices to reflect inflation rates.

You're not getting it. New games not out on console do not follow this model. Whereas everything else we have is inexpensive, logically a game that costs $15,000 and you have 6 months to make your money before it comes out on console AND the fact we are the only place with the game within 7 states, 75 cents is MORE than fair for a game. If you "lower" the price to "encourage" play, you aren't realizing that the game is getting played no matter what. That is why if the game is played 6 hours on weekday and it makes $75 why would I lower it so it can make only $25 in the same amount of time? We don't get the investment back.

Granted people come in there to spend $5 on older games as a set price but with a new competitive fighting game that is definitely not even close to being the case and it never will be. The people that come to PLAY those games are not regulars. They BECOME regulars BECAUSE we are the only place with the game and people from out of town COME to play the game.

Can't take an inch and stretch it into a mile. We spend the money to get the game and expecting it to be lowered is ludicrous. I mean, there's a line to play the game. I LOSE money lowering it because it's going to be played no matter what. Again, small window to make that money back.

[DreamTR]

To answer the other questions:

Arcade has been open since Nov 2008. I still have games on route since Nov 2007 in a laundromat/billiard parlor.

Model of games going to free play depends on maximizing profitability and location. Some places I have seen going out of business because college kids won't pay $6 to go all day. Galloping Ghost has 200 games and charges $15 to play for free all day. I still prefer mall employees coming in and spending money on their lunch breaks and repeat customers that way but a lot of things depend on licensing, regulations, and type of business. Family LBE might be better with one price anyway.

About our console setup, we have a game store inside the place, so we just monitor the console section since we have to have someone there anyway. No big deal. $6 all day, $3 an hour...

[The_Chosen_One]

Maybe if the change machines gave out dollar coins instead of quarters the mind would adjust easier ;)

I think this is probably THE reason people have a hard time adjusting to a dollar a play. I think it's perfectly logical to spend more on a game now as compared to 20 years ago, but the point is that you always used change or tokens. If the US actually got on a system where we all used $1 coins no one would even blink at spending that coin on 1 play. Spending 4 coins though....I know that sounds a bit odd but it's true. Same amount of money or not it's almost a psychological thing, dropping in 1 coin instead of 4.

[SegaAges]

I will say as an arcade goer (and the fact that there are a few really amazing arcades here in Vegas), that the bigger the machine, the more I am willing to pay.

By that, I mean games that are more than a joystick and buttons (unless it is really new).

I am perfectly fine with dropping $1 on a newer game, because let's face it, it gives me motivation to get good at it and only sped $1 on it (that is how I got decent at CvS2 and Alpha 3).

Games like Top Skater, Alpine Runner (I think it is called that), Sega Rally 3, Initial D v4, After Burner Climax, I could keep naming them, but that is what I mean by bigger machines.

If I drop 25 cents into a machine, I am not expecting much except for a good time and something classic and that is about it (maybe some missile command or ms. pac-man or something), but even with some of the older fighters (GameWorks just recently got in Sonic Fighters) I am willing to go 50 to 75 cents (well for Sonic Fighters, but I am biased enough to be willing to make that purchase). If the game is almost like an experience, I am more than willing to drop more (I am still happy and comfortable dropping $1+ on Star Wars Trilogy Arcade Deluxe). Dancing games, well rhythm games in general (except for Guitar Hero Arcade, don't get me started on that game). If it is more of a "pull you into the experience" type game and less of a "here is a fun idea to get points that is strangely an addictive idea" then I am less inclined to pay as much. Most modern racing games I am just fine paying $1 because many of them do a great job of putting you in the driver's seat.

Ms. Pacman/Missile Command/other awesome classics, 50 cents is starting to push it.
The newer stuff, oh man, the newer stuff is cool and I am more than happy paying $1+. The people that complain are cheap.

Also, when I was in Nebraska, their big arcade (Family Fun Center) had a massive area similar to what DreamTR talked about, and that is the console area. Sure, it doesn't make much money, but that console area in FFC is massive and pulls in a crap load of people.

[Leo_A]

And a decade later, it seems like the vast majority of surviving and thriving arcades have done just what I said and have gone to a flat fee that gives the player unlimited plays during their visit.

[Niku-Sama]

not true.

all the ones within reasonable distance of me use quarter or tokens they are however in a bar and for 21+ crowds

[Aswald]

It isn't just covid-19. Arcades have been in trouble for a long time. Note that there are no longer any arcades anywhere near where I live.

In my day arcades did not have to deal with the Internet- only a small percentage of people even owned computers, only a fraction had modems, and the Internet in any modern sense of the word did not exist. Games like "World of Tanks" or "Midnight Ghost Hunt" did not exist. Plus figure in Facebook, Youtube, etc...

There is also originality and technology. In my day arcade technology had a jump on home technology, which was advancing rapidly- but not as much as arcade technology. Even the ColecoVision and Atari 5200 could not match arcade games, not the best.

But today? Home consoles seem more like game rigs. For years home games have had technology so advanced it is no longer a case of arcades being really beyond it, and home technology ("World of Tanks") now has almost every advantage.

There is also the fact that we live in an ugly dystopia and more and more it is better to interact over the Internet. Arcades rely on people physically interacting, and thanks to rampant political correctness that is becoming too dangerous, plus the fact we live in a police state. September 11th 2001 and Covid-19 hammered the final nails in that coffin, in finem citius.