Almost opened a new arcade

MKplayer1start

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I live in a small town east of Toronto. The area has been developing like crazy and there has been many new homes and schools built in this area. recently, they built a new plaza with 6 commercial units and a Sobey's grocery store. This plaza is surrounded by 3 schools in walking distance. 1 high school directly accross the street. Perfect location.

I contact the people leasing the units and find out they're asking $9 per sq ft/ a year. the unit is 792 sq ft which comes to $7,128 a year. $594 a month

so the lease, hydro, insurance... I would be looking at under $1000 a month

I figured if I had all the games on free play and charged $3 an hour I would only need 15 kids a day to cover my costs. realistically I would get much more business than that. there's literally nothing else around here and all these kids have nowhere to go.

here's where it all fell apart. Apparently Sobey's grocery store does not allow Flea Markets, Arcades, or Adult stores to be built in the same plaza as them. it's one of their conditions in their leasing agreament. it goes against their parent company beliefs.

I was pretty dissapointed when I found that out, however I'm looking for a new spot in my town. I don't expect it to be a very profitable business, and it is not my main income, but I wanna do it. I think even in this day, the arcade business can survive if the location is right and the lease is affordable.

thoughts? am I crazy? lol
 
Keep trying. Sounds like you almost had it set. I was always thinking of opening some kind of hangout for the kids here. There is nothing around here for them to do and they wounder why these kids get into trouble.

Back in the mid 90s there was a diner type place with a arcade/ batting cages in the back. I loved that place. Not sure why they closed, but I know the location wasn't the greatest. Put a location like that on the main street and no way it would fail.
 
You will almost certainly lose a lot of money. It is extremely difficult to come up with any sort of arcade business model that works and the ones that do work end up being not at all what you want.

Lots of guys on these forums have opened arcades over the years only to have to close them up later.
 
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The Incredible Pizza Company near me just closed down. They couldn't even make it work with the games/pizza/redemption/birthday party stuff all going. Odd thing is that there used to be two other pizza buffets within a mile of the place, both of which went of business within a couple months of each other (leaving Incredible Pizza as the only pizza buffet in town) and then a year later Incredible Pizza rolls up its doors too.
 
Also check what you would need for city licensing. Around me it's $200 per machine per year, which in this market will take a while to recoup unless you have some other draw to pull traffic in.

Seems these days the BAR-Cade is the way to go.
 
There are a few arcades around that have the possibility of making it. However, they are not just arcades. They are full bars, with a full kitchen that serves a menu of food. Its an awesome idea to open an arcade. I'd love to do that, but in this day and age, it just does not seem profitable at all. Your target customers are mostly middle school to high school. Most of those kids are broke and if they do have jobs, they most likely are pretty stingy with their 100 dollar a week part time paycheck.

If you do open an arcade, I truly hope you succeed in your venture. It would be awesome to break out of the mold and be successful in that field. I do believe if you were to open one, the best thing to do is create another element that brings in customers out of the under 18 bracket. If you could draw adults there and they bring their kids, then its a win win. The adults pay for something they like doing and they give money to their kids to play arcades.

This would take a lot more effort, money and space (not to mention a staff), but I always thought, if I were to open an arcade, I'd do this: Open a nice restaurant with an arcade in the back...or vice versa. Serve good food, wine, deserts, etc... My whole sales pitch would be about the restaurant. I'd make people want to come down to my restaurant because they wanted to eat my food. On a side note, I'd also advertise that there is a full arcade and if you can't find a babysitter, you can bring your kids with you and we would watch them with our staff of qualified daycare employees while you eat. The kids would have full access to the arcade and maybe a mini theatre with cartoons playing.

Of course there would be stipulations, like....after your done eating, you can't just sit there while we watch your kids, unless your ordering drinks or deserts or whatever.
 
There are a few arcades around that have the possibility of making it. However, they are not just arcades. They are full bars, with a full kitchen that serves a menu of food. Its an awesome idea to open an arcade. I'd love to do that, but in this day and age, it just does not seem profitable at all. Your target customers are mostly middle school to high school. Most of those kids are broke and if they do have jobs, they most likely are pretty stingy with their 100 dollar a week part time paycheck.

If you do open an arcade, I truly hope you succeed in your venture. It would be awesome to break out of the mold and be successful in that field. I do believe if you were to open one, the best thing to do is create another element that brings in customers out of the under 18 bracket. If you could draw adults there and they bring their kids, then its a win win. The adults pay for something they like doing and they give money to their kids to play arcades.

This would take a lot more effort, money and space (not to mention a staff), but I always thought, if I were to open an arcade, I'd do this: Open a nice restaurant with an arcade in the back...or vice versa. Serve good food, wine, deserts, etc... My whole sales pitch would be about the restaurant. I'd make people want to come down to my restaurant because they wanted to eat my food. On a side note, I'd also advertise that there is a full arcade and if you can't find a babysitter, you can bring your kids with you and we would watch them with our staff of qualified daycare employees while you eat. The kids would have full access to the arcade and maybe a mini theatre with cartoons playing.

Of course there would be stipulations, like....after your done eating, you can't just sit there while we watch your kids, unless your ordering drinks or deserts or whatever.

PolarBear,

I see your in Canton, I am in the area and I would love to go and deposit some quarters and play some classic machines. Do these places exist in metro Detroit?
 
You need something besides just arcade machines. Maybe some kind of fast food or selling other products that will actually make money.
 
The Incredible Pizza Company near me just closed down. They couldn't even make it work with the games/pizza/redemption/birthday party stuff all going. Odd thing is that there used to be two other pizza buffets within a mile of the place, both of which went of business within a couple months of each other (leaving Incredible Pizza as the only pizza buffet in town) and then a year later Incredible Pizza rolls up its doors too.

I work there and we never did close our doors (except for Christmas and Easter of course). The owner of the 2 IPC locations was getting the run-around from corporate from not getting the proper training, recipes changing for the worse, corporate kick-backs from having to use sub-par products at a higher price than higher quality food from certain companies, marketing changes, and many other problems with corporate. We are going through some overhauling (new paint, recipes, themes, etc.) and we are still going strong and hopefully getting stronger. We are still a christian based facility. The pizza has gotten better and we are trying other types of food. Same games, and getting a couple new ones, repainting the Go Karts and other improvements. With all the legal battle/fees, it kind of looked like we were closed with not having a real sign on the building. The south location is almost all done with the conversion and the St. Peters will hopefully start on Monday May 14. I just don't like the new color for the front, but you will diffidently see it when you drive by.
 
you need to offer them something they can't get on an Xbox like linked sit down racers (different experiance), air hockey, ping pong...

stuff like that and price it low to encourage traffic.
 
Air Hockey and Ping Pong ....really , I don't see it .
Kids today can play Gran Turismo 5 in 3D on their dads 50 "plasma with a force feedback steering wheel at home , they are not so easily impressed .
 
Air Hockey and Ping Pong ....really , I don't see it .
Kids today can play Gran Turismo 5 in 3D on their dads 50 "plasma with a force feedback steering wheel at home , they are not so easily impressed .

And yet, kids today still play baseball using cheap bats / sticks and their backpacks as bases. The trick is to give them something social and competitive that they can't experience in their living room.
 
I rember having skating rinks with arcade in them, do they still exist anywhere? The only way I see being able to have a arcade in my area would be to build one in Silver Lake. They have a few of them but they are not just arcades they have go karts and mini golf also but the arcade part seems to have a lot of people there.

Also when I was on vacation at Dolly wood they had a ton of big arcades in town, Gatlinburg,TN. and they seemed packed.
 
Didn't I just say you have to offer them something they can't have at home ?

Yep, you sure did! Then gave the examples of Air Hockey and Ping pong...

Air hockey tables = $50 bucks on CL and it's common to have ping pong at home too! I had a ping pong table and a lot of people do because 1) They store fairly well for their size and 2) make good tables for large parties.
 
Went skating 6 or 7 years ago with my buddy and his wife. It was a friday night, the place was packed with teenagers (we were the only adults there) we stayed about 2 and a half hours.

They had 3 or 4 arcade games and one pinball machine there (at least one was a driving game). I watched the machines all night and at no point did anyone play any of them.

Not one single play of one game on friday night with 150 kids there.

Not one play.

I rember having skating rinks with arcade in them, do they still exist anywhere? The only way I see being able to have a arcade in my area would be to build one in Silver Lake. They have a few of them but they are not just arcades they have go karts and mini golf also but the arcade part seems to have a lot of people there.

Also when I was on vacation at Dolly wood they had a ton of big arcades in town, Gatlinburg,TN. and they seemed packed.
 
I'd have to agree with much of what was said in the previous posts. Your business venture cannot thrive on the arcade on it's own. For arguements sake, let's say you open a restaurant. The arcade is what will set your restaurant apart from others in the area, not that you will be an arcade that just sells food.

Another flaw in your business model is your costs. You plan on just making rent, electric, water (and I'll assume wages). You still have not taken into account preventitive maintinence, basic maintinence, parts, new stock for game rotation, etc.

Look at successful business ventures, and ones that fail, and compare why they work/don't work. Here in the states, Dave and Busters has been a successful business model. Plain arcades have died. What sets them apart? Dave and Busters has good, affordable food, a fully stocked bar (top shelf and rail), tons of TVs with sporting events, AND games to play... It's about the package deal...
 
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