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,

[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.