Originally Posted by
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.
Reply With Quote