New member with an Arcade question

[jsicuran]

I like this site very much and I am a newcomer to this site.
I was referred here by the fellas at the ClassicGaming site.

I am an old school Atari 2600/5200 fan since 1980. I am also a classic coin op game lover as well. I have a mint Asteroids Deluxe machine in my office.

I am thinking of opening up a video game arcade in my local neighborhood to earn a little extra cash. The neighborhood is a very good middle class section of LI and I wanted to tailor the arcade to a classic’s retro theme of the eighties/nineties for the adults and introduce some of these cool classics to the current generation of kids. I would also put in a few of the current popular titles as well for the kids also. The locations are not too far from the neighbors Jr/Sr. High school. In fact a location I have looked at is on the same block as a pizza parlor and a bagel place that the kids go to for breakfast and lunch. The place would be small, like the old arcades in the eighties, not like that of a FUN ZONE or something today. Just coin ops along the walls, no rides et. al.

My question to the folks here, what is the process and possible issues involved to get started or at least further my research on this?

Do I contact the local chamber of commerce?
Do I have to present or get certified to the neighborhood leaders etc about the arcade’s hours and customers?
Do I need any kind of neighborhood approval for such a business because of its nature?
Do I buy the coin ops outright or rent monthly?
Is there or are there any past or present stories out there about starting and running an arcade that I can reference?

Any help or direction would be greatly appreciated.

Regards...

[NE146]

You might want to also post your question at the classic arcade collecting newsgroup such as rec.games.video.arcade.collecting. That's where a lot of "ops" hang out as well as collectors who have done exactly that (opened up a small classic arcade) and could probably give you good advice.

If you don't know how to post to newsgroups, you can always just use groups.google.com (you'll have to create a google account however). Anyway, here's a direct link:

http://groups.google.com/groups?hl=en&lr=&ie=UTF-8&safe=off&group=rec.games.video.arcade.collecting

I'd post to both rgvac and rec.games.video.arcade

[Arcade Antics]

I am thinking of opening up a video game arcade in my local neighborhood to earn a little extra cash.

From a pragmatic standpoint, this issue is the one you'll want to look into the most. There's a reason there aren't many small "mom and pop" type arcades these days. They weren't earning a little extra cash and had to close their doors.

I'm not suggesting that you don't try it; rather, that if the goal is to earn a little extra cash, it's definitely going to be an uphill battle. If you're okay with that and know what you're getting into (as far as those un-fun matters of keeping the doors open, etc. are concerned) then "go for it!" :) We can definitely use more arcades.


Do I have to present or get certified to the neighborhood leaders etc about the arcade’s hours and customers?

Do I need any kind of neighborhood approval for such a business because of its nature?

No - your local government type people will give you the skinny on the zoning and such, as well as what forms you need to fill out, fees to pay, etc.

And listen to NE1, as he's quite the good resource. :)

[jsicuran]

I did take NE1's advice and posted up on the google forums.

Thanks folks for all of the replies. I really do appreciate it especially the reality of some of the posters. As stated I was thinking of classics and some of the popular current games to keep everybody interested in the arcade. I do have the money to start but just still in research mode. I am trying to find out if there is a market for retro coin op gaming. I figured that something for the local school kids to hit(newer games) during the week to help coin flow and the retro for the adults and kids for future/sustained coin flow as well. The only arcades on LI are those big fun zone/chukie cheese types and they do have all those cool newer games ($1.00+) bikes etc., but I am curious if a small town arcade can make it with the retro/new games.

I do not want to go the chukie cheese route, too much overhead.

What I envisioned is a simple dual row of games, one side current popular stuff, other side classics in an old location that was once a real estate office or a Laundromat. I figured probably ¼ newer games and ¾ classic retro games. Low overhead, just insurance(thanks for pointing that one out folks), energy and staff(just me) for a couple of months.

As a unique value add I also was thinking of setting up a separate room with networking hardware so kids can bring in their Xboxs/PS2s for cheap access for LAN parties.

I have been in the tech industry since ’84 and I am a Networking IC so I have plenty of switches, routers etc.

I wanted this to be side business that I can have someone I trust manage during the week for me while I handle my usual IC ventures once the arcade was off the ground.

Do you think if I put together some advertising for the local area, then get only a 3 month lease on the location(RE market for commercial sucks so I should be in drivers seat there)and rent a truck load of games for a couple of months and give it a shot for a quarter or two, will it work? That way if things do not work out, I only loose out on the rent for location, games and energy costs. I do not have to own the games and worry about reselling them etc. What do you think? I can basically shut down quickly and cut my losses. Can that be done and has anyone done this before. Can I rent the games like that or do I have to buy them? If I rent do I have to give a % of the coin op “draw” to the renter? Can I rent the popular ones and manage to get the requested classics also?

It would be nice if it works out for what early 80s teen game nut would not have love to own a classics arcade
I will check out that other board mention earlier in this thread that had the guy with arcade experience.

Any further replies are appreciated.

Thanks again folks.

Regards

[Arcade Antics]

Do you think if I put together some advertising for the local area, then get only a 3 month lease on the location(RE market for commercial sucks so I should be in drivers seat there)and rent a truck load of games for a couple of months and give it a shot for a quarter or two, will it work? That way if things do not work out, I only loose out on the rent for location, games and energy costs. I do not have to own the games and worry about reselling them etc. What do you think?

So many new businesses, even businesses that should be a "slam dunk", fail within the first two years. So on one hand, to really make it work you may have to stick it out for several quarters. On the other hand, if you have a pretty clear picture of where things are/will be going at the first or second quarter mark, sounds like you've got a handle on that end of things.


I can basically shut down quickly and cut my losses. Can that be done and has anyone done this before. Can I rent the games like that or do I have to buy them? If I rent do I have to give a % of the coin op “draw” to the renter? Can I rent the popular ones and manage to get the requested classics also?

New games: you can rent the games from a local distributor. Not sure what they charge, you might be able to negotiate a deal with them.

Classic games: You might be better off buying them outright. If you get a good deal on them and things don't work out, you could sell them for the same price and not even lose money leasing them. Best bet is to go to an auction, buy several games there for a song. In that case, if things don't work out and you shut down, you'll probably wind up selling them for a little more than you paid originally.

Good luck, keep us posted on your progress. :)

[NE146]

I see that you got 4 replies already in rgvac.. :P By the way.. I don't know if you actually used "Google" to do your post (it doesn't look like you did) but if so, just thought I'd let you know that Google groups is very slow.. sometimes replies to your posts take up to 24 hours to show up even though they're already there. x_x Just FYI

[jsicuran]

It's Saturday night, I've got no date, a 2-liter bottle of Shasta and my all RUSH mix-tape!


Fry? is that you?? Futurama?


Thanks fellas, yes I did post to the google forum and have received some replies directly from email. I already have an tax id, for my s corp and professional insurance from being a tech IC. So that is out of the way. I will see what the feed back from the google forum is like and look into the game purchasing. The issue with purchasing the classic games is just that, the time to resell them back if things do not go well. I will have to store them if not resold back before the lease is up. Or put them all in my house, hell I don't mind my home being decorated in classic arcade fashion but the wife may. Nontheless I am trying to see if I can do this as low overhead a possible and keep the option of getting out if things do not go so well. The issue that bothers me most is the local gov/permit issue. One point of this whole exercise is to get it close to the kids as possible.

Thanks..

[jsicuran]

I have been in business for 8 years as an IC in networking so my only overhead is intellectual capital. I also run an online lab www.amilabs.com but this was low cost to put together and is not meant to make a lot of money. It is the understanding of the risks that have always made me successful or lucky and that is why I am here I figured you pros have seen it all and could help shed some light. If I can put it together and it grows then great, if it dies quickly or hits an expense threshold quickly my fold up costs and time are minimal and mitigated. That is why I was looking into renting all of the coin ops if possible. With that approach if I sink I just return them and basically paid for my own private arcade for a month or three. If it takes off I could always ladder the coinops by buying a classic and returning the rented ones on a monthly basis.

[stargate]

My #1 piece of advice to you is this:

Don't invest alot of money into decorating the place and offering food and drinks and all that garbage. Just have tons of cool games, dim lighting, and most importantly............

Play really cool music that the teenagers will like. There was this arcade that I grew up near when I was a teen. They played the best music, Metallica, Megadeth, Motley Crue (it was the 80's remember). It became a great hangout and was always packed. There is something about good music that draws young crowds. If the place is a success, then you can think about adding money to make it better.

[Masco73]

My suggestions would be to start with at least 6 months to a year worth of running costs. Your 1 to 3 months is unrealistic. It takes a while to get the word out. Case in point. It took me 3 months to notice a new EB was opened up in a place I drive by 2 to 3 times a week. I drove by it one day and and did a double take. The store had already been there 3 months.
Also, Advertise!!! Have a big grand opening or something to draw attention to the place. Maybe have a high school kid hand out flyers in school.

I think most of us here have had this idea/dream. I for one have, but the overhead and investment cost would be pretty big. I hope you can make it work!!

Good Luck!! :D

[jsicuran]

My #1 piece of advice to you is this:

Don't invest alot of money into decorating the place and offering food and drinks and all that garbage. Just have tons of cool games, dim lighting, and most importantly............


That is why I was looking at a spot right next to a bagel store and two stores down from a pizza shop. Why spend on the food is a good point..

Thanks..

[jsicuran]

Thanks folks you really opened my eyes. This is what I was looking for. I do have the cash but was looking to see if such an endeavor was a slam dunk and the points in your replies were what I needed. For what I "thought" was required and the reality are very different. Believe it or not I do know about running a business, well maybe a consulting services business, but not a storefront type. I remember when I started out as an IC taking out a lease for 35k on a protocol analyzer that will add to my professional tool chest. That 35k tool investment made me 500k in a couple of years. I was hoping to just do something like this on the cheap to make like $500 to $1k a month after all expenses. If you had made one point very clear, and being in the tech field for 20 years, is that the maintenance can or will kill me. New games I am screwed on cost. Old games I am screwed on quality of service, MTTR, MTBR.

It is funny that so many people on the boards had similar responses. I know the topic has been done to death by every wannabe arcade owner dreamer like me. But it must really be that bad for so many people to tell me it is not a good idea. I know they are being kind by not wanting to crush my dreams but just the lack of rah rah entrepreneurial spirit speaks for itself. It is just not economically sound to do unless you really commit. My time is best spent on another technical project, a WISP.

I want to thank you for the time and replies. I will post this up on the other boards to thank the other folks as well.

It looks like I am going to pass on this "dream", unless I hit the lottery:)

Thanks again and good luck to all. I will stay a member on the boards though...

I really do appreciate the time everyone took to reply so thanks again..

Regards..