Amusement machine industry not actually in shambles?
So while talking with fellow klov member editor in the guitar hero thread, he pointed out something extremely interesting. The amusement/arcade industry is actually doing well, but is being ignored by the consumer press. Here is our conversation so far. Sorry this isn't better organized for those of you just joining in; I'll quote some specific comments that I found especially interesting in a reply.
(At this point I made an ill-informed point about the amusement industry being in the toilet, to which he corrected me)
So while talking with fellow klov member editor in the guitar hero thread, he pointed out something extremely interesting. The amusement/arcade industry is actually doing well, but is being ignored by the consumer press. Here is our conversation so far. Sorry this isn't better organized for those of you just joining in; I'll quote some specific comments that I found especially interesting in a reply.
I've always wondered how Chuck E Cheese is doing, do you have any links?
Also, one thing I always wonder about with someone like Dave n Buster's or Chuck E Cheese is that they get all of these machines with loan money, and then are able to post profits because they're bringing in more revenue than money they're spending to pay back the loans. But isn't this only temporary? It could take 10-30 years to pay the loans back, and by that time the machines have definitely stopped making as much money (and most machines have probably stopped making the majority of their money after the first, what, 3-5 years?). I mean by that point they've probably taken out new loans, bought new machines, and are then using the new loans/machines to continue paying back the old loans, but have they ever actually made much money off the machines? They have so many machines that cost $5,000-8,000, and I can only imagine that there are more than a couple that never come close to paying for themselves.
Sorry if I'm rambling, didn't sleep very much last night. Feel free to let me know if I need to clarify anything.
No - I think I got the jist of the point you were making.
Right lets deal with a link to the CEC profits:
http://arcadeheroes.com/2009/10/31/chuck-e-cheese-posts-profit-jump-in-q3-how-is-your-arcade-doing/
[Note - while there look at the Dave&Busters numbers]
Next to the point of loans. No your incorrect, what we see is a distributor agreement that leases the machines, and agrees a buy back for purchase of the next system. The big chains able to employ more buying power and diversity. The idea that the market is crumbling is wrong, but to be frank if I depended on the news for the consumer games media for info on amusement I would think its dead.
Some information (sorry to bore those not interested) - a amusement machine sells in the order of 100 to 2,000 units depending on success - average prices are between $6k and $14k. Machine sales are up on 80's numbers, but the number of manufacturers is way down (big slices on small pie). Machines are placed in venues such as cinemas, family entertainment centers, bowling, miniature golf, laser-tag, retail, sports bars, etc,. This is a diverse and complicated market - and has not depended on old style arcades since the end 89' (don't tell the consumer press!)
We have seen a major upswing in amusement machine interest in this 'recessional' market - though the skill and redemption machines have seen an even bigger upswing.
I can't put enough force behind this final point; the consumer game scene is not here to promote the amusement sector, so you will have to dig for yourself for accurate arcade news. Even when I write for the consumer media they edit my coverage (amusement seen as a competitor to their business, and difficult to cover).
(At this point I made an ill-informed point about the amusement industry being in the toilet, to which he corrected me)
Kiwasabi - where do you get the notion that amusement "is already mostly completely destroyed"??
It is this kind of ill informed statement based on no facts that perpetuates the myth and allows others to profit. As I supplied above - CEC is doing great guns, D&B doing great, and the cinema sector sees amusement as a valuable maximizer to their business. The bowling sector is phenomenally successful for amusement. That is not a "completely destroyed" industry by any perception... other than by a console fan boy!
All that said, amusement is hurting - we see an industry staggering to define itself in the new business model of public-entertainment. Products like the GamesGate and the new ZAZOOX system look at mixing consumer with public-space entertainment. But amusement still draws interest, especially with next years Metal Gear AM system wowing crowds.
Dear Kiwasabi - agree let take this off to another posting, did not mean to insult, or stamp on you, it is just that I get sick of hearing people claim my industry is dead, and then for them to have to think of a cleaver way to admit that there is some life!! Guitar Hero was a great example - first the consumer trade said it was not happening, then they suffered amnesia that they had claimed it would never come out or sell - now they just ignore it - and for the Konami announcement of Metal Gear in 3D, some sits tried to re-write the press announcement to cover their butts!!
