Operators in 2012, is there money to be made?

gottifour

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Are there active operators here and/or is there money to be made in this business. It seems pretty obvious stand alone arcades can't really happen anymore but I'm wondering more about bars, pizza places and restaurants. Can money be made off of the Golden tee's, pool tables, dart boards and jukeboxes in these places? I know there are a lot of variables involved so there may not be real answers to this broad question.

I'm sure it varies based on how many locations/games you have on the route but are a lot of employees needed or is it usually a one or two man show?

Any input would be appreciated!

Thanks
 
I think there is but its all about location and you have to be willing to invest in the expensive new machines. The only full arcades I can see doing fairly well are the ones located at vacation spots.
 
I have no idea what I'm talking about, but my guess is that modern stuff would do fine, and it seems to me like certain classics (except maybe Ms. Pac Man since those are STILL everywhere) *should* be able to do well on a "wow, it's an old ___ machine!" level. I think '90s games would be death because they're not classic enough to be cool and not modern enough to interest people.

But yeah, location and context is literally everything. And you can't even be general about that. One bar is very different than another bar.

I keep being tempted to go down the block and ask the owner of the bar there if I can wheel my Donkey Kong over and see what we could get out of it. Not even so much for the money (because I know it wouldn't be a lot), but because I'm just very curious!

Of course, then I imagine assholes manhandling it and go on with my day.

All I know is that if I spend an hour in the "Classics" section at the Santa Cruz Beach Boardwalk Arcade (which I do every few months or so), I will almost never see fewer than three people take a shot at the DK. The thing still pulls in $10 a day easy, and that's in the tourist off-season and on non-"event" days. That's the location advantage. The "vacation spots" comment is right on.
 
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I think there is but its all about location and you have to be willing to invest in the expensive new machines. The only full arcades I can see doing fairly well are the ones located at vacation spots.

Thanks for the response!

When you say expensive machines do you mean the newest sit down drivers and golden tee's mostly?

If I'm in a bar or pizza place these type of games seem to be the ones with the most action. In my area (Northwest Indiana and Chicago area) a lot seem to be beat up and not functioning properly. I see people going up to them and either putting money in and having a poor experience or putting money in and it not working at all. I just feel like that's money lost for the operator and it shouldn't be that way.

Ultimately I feel like it's a good business to get into if it's ran right and I am sick of living check to check at my current job! I need to supliment my income ASAP!!!!
 
Yes, the newer driving games seem to get alot of play. The kids seem to like the DDR machines which I really dont understand.
As far as classics, the midway reunion cabs seem to be everywhere and still getting alot of play. A couple years back I was at an arcade that had a row of 4 of them and all were being played. These were MsPac/Galaga machines.
 
Thanks for the response!
Ultimately I feel like it's a good business to get into if it's ran right and I am sick of living check to check at my current job! I need to supliment my income ASAP!!!!

There are less operators today than ten years ago.

And these guys knew what they were doing.

It's a tough market.

And your start up costs are high.

Learn as much as you can and don't plan on supplementing your income for years.

LTG :)
 
It is a continually shrinking market, not one I would want to get into, not when guys with existing businesses keep going under one after another.

To me getting into operating games today would be like trying to open up a chain of video stores.

I do however feel that there is the possibility for the scene to change in about 10 years. Right now you buy the newest and latest $12000 3D arcade game only to have the home stuff make it look dated long before it ever earns its keep.

However 3D graphics aren't all that far off of simply looking REAL. When that day comes the arcade games will once again be a superior overall gaming experience, at least for the simulator and driving stuff that uses controls and features beyond what the home system has to offer.
 
Here is the status of the industry right now:

Bars- only things making money are digital jukes and pool tables (when the location doesn't set the tables to free play). Golden Tee, big buck, silver strike... They don't make shit anymore. You're better off burning the cabs and selling the parts. A pinball will gross between 60-100 a week for a month, then make about 40-50 a week.

Restaurants, Carry Outs - mspac/ galaga or multicades will GROSS 60-100 per week in a GOOD location. Claws and self redemption make a little more... It really depends on what prizes you're vending. Angry birds, electronics, ball cranes, that kind of stuff.

Video is DEAD, unless it is the newest, hottest thing, and you're paying $8000 plus for a game. Redemption is where it is at. Case in point... I was down in Rehoboth on the boardwalk recently. One arcade... The only non-ticket, non merch games were terminator and pirates pinball. THE WHOLE ENTIRE ARCADE was ticket or merch. Probably a dozen or so claws, 3-4 Key Masters, a couple stackers, stuff like that. Down the boardwalk a bit, another Gameroom had a few more.... A couple h2os, terminator..., but the rest of the vids were 10+ years old: hod3, time crisis 3, rush 2049, Crusin exotic, and ocean hunter. Rest was redemption/merch.

Bottom line is: vids aren't worth buying! They depreciate like a rock, and they make you money, relative to what you have in them. I'd rather have a Crusin exotica that I paid $400 for at the last auction making $25 a week than a super cars making $125 a week that I paid $8000 for.

Now... Remember the lawsuit against CEC last year where the mom accused the chain of illegal gaming? Well, CEC is co-sponsoring a bill that would eliminate or severely limit the prizes distributed by merchandisers or FEC's. CEC sees the writing on the wall, and is being proactive in leveling the playing field, so to speak.

A few ops around me (including myself) have slowly started to stockpile classic video as if that will be the next fad in coin op. we'll see.

My advice: don't do this full time. If you're looking to supplement your income with what you already own, then fine. Ops are dropping like flies right now.

Mike
 
I'm restoring my first machine right now, so I probably can't accurately answer the question, however, my brother works at a new local comic book/card game/miniatures store ( http://epiclootgames.com/ ) that hosts various tournaments (think Magic the Gathering).

They get about 100-200 people in on Fridays and Saturdays for their various tournaments, and the owner is practically begging me to put my DK machine there. He says the majority of their clientele are in their 30s and would swoon over it. He told me I could keep 100% of the profits, he just wants it as an additional draw and cool conversation piece.
 
I keep being tempted to go down the block and ask the owner of the bar there if I can wheel my Donkey Kong over and see what we could get out of it. Not even so much for the money (because I know it wouldn't be a lot), but because I'm just very curious!

Check with your city licenses first.

Here is Spokane you need a "Amusement Devices Licenses"
I'm sure every city is different, BUT check into it. If the city find out
they will want their cut and penalties, etc,etc,etc

Good Luck!
 
In addition, most of the guys who have gotten into operating, say after the 90s, are DIY types, and don't really have many employees. Anyone still around from the heyday is running on old money, or has parlayed the old money into bigger ventures like restaurants, bars, real estate, pawn shops, etc., and are just hanging around for whatever reason.
 
It is a continually shrinking market, not one I would want to get into, not when guys with existing businesses keep going under one after another.

To me getting into operating games today would be like trying to open up a chain of video stores.

I do however feel that there is the possibility for the scene to change in about 10 years. Right now you buy the newest and latest $12000 3D arcade game only to have the home stuff make it look dated long before it ever earns its keep.

However 3D graphics aren't all that far off of simply looking REAL. When that day comes the arcade games will once again be a superior overall gaming experience, at least for the simulator and driving stuff that uses controls and features beyond what the home system has to offer.

I agree with you on the 3D stuff and I'm looking forward to the progress in that area!

Here is the status of the industry right now:

Bars- only things making money are digital jukes and pool tables (when the location doesn't set the tables to free play). Golden Tee, big buck, silver strike... They don't make shit anymore. You're better off burning the cabs and selling the parts. A pinball will gross between 60-100 a week for a month, then make about 40-50 a week.

Restaurants, Carry Outs - mspac/ galaga or multicades will GROSS 60-100 per week in a GOOD location. Claws and self redemption make a little more... It really depends on what prizes you're vending. Angry birds, electronics, ball cranes, that kind of stuff.

Video is DEAD, unless it is the newest, hottest thing, and you're paying $8000 plus for a game. Redemption is where it is at. Case in point... I was down in Rehoboth on the boardwalk recently. One arcade... The only non-ticket, non merch games were terminator and pirates pinball. THE WHOLE ENTIRE ARCADE was ticket or merch. Probably a dozen or so claws, 3-4 Key Masters, a couple stackers, stuff like that. Down the boardwalk a bit, another Gameroom had a few more.... A couple h2os, terminator..., but the rest of the vids were 10+ years old: hod3, time crisis 3, rush 2049, Crusin exotic, and ocean hunter. Rest was redemption/merch.

Bottom line is: vids aren't worth buying! They depreciate like a rock, and they make you money, relative to what you have in them. I'd rather have a Crusin exotica that I paid $400 for at the last auction making $25 a week than a super cars making $125 a week that I paid $8000 for.

Now... Remember the lawsuit against CEC last year where the mom accused the chain of illegal gaming? Well, CEC is co-sponsoring a bill that would eliminate or severely limit the prizes distributed by merchandisers or FEC's. CEC sees the writing on the wall, and is being proactive in leveling the playing field, so to speak.

A few ops around me (including myself) have slowly started to stockpile classic video as if that will be the next fad in coin op. we'll see.

My advice: don't do this full time. If you're looking to supplement your income with what you already own, then fine. Ops are dropping like flies right now.

Mike

Thanks for all of the insight on this, you obviously understand the market since you are in it.

There are several operators in my area with "fully functioning" routes and they are ready to retire.

I just see a lot of there stuff on location and they have out of order signs and/or aren't working properly. I can't understand why they don't repair these so they can at least make some profit from them.

I will read up on the lawsuit you mentioned, I haven't heard of it.

I'm restoring my first machine right now, so I probably can't accurately answer the question, however, my brother works at a new local comic book/card game/miniatures store ( http://epiclootgames.com/ ) that hosts various tournaments (think Magic the Gathering).

They get about 100-200 people in on Fridays and Saturdays for their various tournaments, and the owner is practically begging me to put my DK machine there. He says the majority of their clientele are in their 30s and would swoon over it. He told me I could keep 100% of the profits, he just wants it as an additional draw and cool conversation piece.

Do it! Sounds like a win-win unless your DK is fully restored. I would be a little worried about putting something fully restored in the wild!

Check with your city licenses first.

Here is Spokane you need a "Amusement Devices Licenses"
I'm sure every city is different, BUT check into it. If the city find out
they will want their cut and penalties, etc,etc,etc


Good Luck!

I do believe they tax every machine in my ares but I'm not sure how much yet. I'm still looking into that.

In addition, most of the guys who have gotten into operating, say after the 90s, are DIY types, and don't really have many employees. Anyone still around from the heyday is running on old money, or has parlayed the old money into bigger ventures like restaurants, bars, real estate, pawn shops, etc., and are just hanging around for whatever reason.

So were the operators making a ton of $$$$ in the heyday? I'm assuming the answer is yes on this.



Thanks for all of the information guys. I really appreciate it!!
 
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There was a guy who opened an arcade in the local mall - a bunch of ticket machines, a couple of sit down drivers, air hockey, 2 pins and a mini frogger and mspac. Was there for about 6 months and closed down. Real bummer - the place was a ghost town anytime I went by. Probably didn't help that he was at the opposite end of the mall from the food court where all the kids hang out...
 
Every now and then some of the Georgia group discusses operating down here.

Right now it's very cost prohibitive just from the licensing side. It's something around $500 for a master license, and then $25 or $50 a machine last we discussed it.

At one point back when Golden Tee's where the big thing I thought about getting a few, but again, the licensing just about killed a smalltime operator.

I think the whole Pinball Club or something like that might make more sense in today's day and age, but not sure if that really gets around any of the licensing.
 
I've been thinking about opening a Hackerspace down here in North Atlanta and maybe putting a few machines in there on freeplay for club members, but still worried about licensing being an issue.
 
So were the operators making a ton of $$$$ in the heyday? I'm assuming the answer is yes on this.

Thanks for all of the information guys. I really appreciate it!!

oh yeah... in the early 80's pacman was credited with Japan experiancing a shortage of coins and they had to mint more... not joking. In the heyday vid-gaming was HUGE, now it's mostly nostalgia...
 
Every now and then some of the Georgia group discusses operating down here.

Right now it's very cost prohibitive just from the licensing side. It's something around $500 for a master license, and then $25 or $50 a machine last we discussed it.

At one point back when Golden Tee's where the big thing I thought about getting a few, but again, the licensing just about killed a smalltime operator.

I think the whole Pinball Club or something like that might make more sense in today's day and age, but not sure if that really gets around any of the licensing.

It really seems that standalone arcades can't happen anymore. At least with the current technology of the games.

I've been thinking about opening a Hackerspace down here in North Atlanta and maybe putting a few machines in there on freeplay for club members, but still worried about licensing being an issue.

There has to be some sort of loophole with this setup. Like under the guise of it's a private club or members only or something. Especially since they will be on free play.
 
It really seems that standalone arcades can't happen anymore. At least with the current technology of the games.



There has to be some sort of loophole with this setup. Like under the guise of it's a private club or members only or something. Especially since they will be on free play.

Well there is a fairly negative perception about the industry that doesn't help sales and unfortunately its not always based in reality. I am currently writing a book about the arcade experience both classic and modern to tackle that. Arcades depend on a few things that affect small businesses in general. Location, location, location. Where I am at is directly affected by how busy the mall is. Lately the entire mall has been slow so I have been slow. If the mall is busy, I am busy. I have been running a video arcade business for four years. Haven't made a bunch of money but have managed to stay open. And that is without a bunch of prize games, I have focused almost exclusively on video. Only recently did we add a BarberCut Lite from another operator to see how it would do. They are going to be adding the new Big Buck HD, should be interesting to see how that does. Raw Thrills games are my money makers, Terminator, Tokyo Drift, etc have all paid themselves off in about a year. Classics do not make any money at all. They are only good for filler(an example from my place this past week - Crystal Castles made $2; Warlords Cocktail $0; Ninja Gaiden $2.50; Namco Classic Collection Vol. 2 - $3. Terminator Salvation which is two years old made $152. This was a slow week but even on busy weeks classics don't really change all that much) That doesn't mean that a classic or a multigame can't do fine at the right location like a restaurant where there are no alternatives. Classics can do well when the location is packed with them (60+ machines) it seems, from all the classic arcades popping up out there. But don't kid yourself that it will be easy.

Not to mention that we are in an essential depression - anyone who doesn't believe that isn't paying close attention to the economic realities of the past few years. The reported growth is always published at a higher number and then quietly revised downwards, look at the numbers just from the final revised ones on a chart and its more than obvious that the so-called recovery is a joke and a charade. In past recessions it would have been over and done with already which is frustrating as I would love to be operating in a healthy business environment for a change. I opened just a few months before the crash and its been anemic but we've made the best of it, even having to move two separate times because of mall reconstruction. I don't make enough money to hire someone because of it all not to mention that it's expensive to hire someone between wages, insurance and taxes. I don't know of many businesses really expanding as it is, in fact lately there have been more layoffs. But given the right game selection, right location and right marketing, it can be done.

But to give you an idea, there are more arcades out there then are given credit for. Close to 105,000 according to Play Meter:

http://www.playmeter.com/images/SofIpg01.gif

Of course a vast majority of those are street locations, places that have a couple of games to make a quick buck off of. But they still list about 2100 arcades and 1800 FECs. Aurcade.com is catching up on registering those. They currently have 1223 listed.

There are more video only arcades appearing on the scene but the problem comes back to a business reality for many small businesses and that is marketing. Few arcades have the capital to spend on marketing and a lot of us are not marketing experts. One time I blew over $1000 on marketing and it was a complete waste of my money (coupons in a coupon book placed on Pizza Hut boxes - took much longer to publish and I never received confirmation that all the books were put on as many boxes as promised). So I've focused mostly on social media advertising up to this point. I would love to spend money on something like radio or TV but its a question of capital vs effectiveness.
 
Are there active operators here and/or is there money to be made in this business. It seems pretty obvious stand alone arcades can't really happen anymore but I'm wondering more about bars, pizza places and restaurants. Can money be made off of the Golden tee's, pool tables, dart boards and jukeboxes in these places? I know there are a lot of variables involved so there may not be real answers to this broad question.

I'm sure it varies based on how many locations/games you have on the route but are a lot of employees needed or is it usually a one or two man show?

Any input would be appreciated!

Thanks

There is definitely money to be made, but not in a stand alone arcade with nothing else. You need food, booze, something else to supplement. There is a local owned pizza place near me with a classic arcade of about 10 games (Galaga, Ms Pac...nothing even JAMMA) and 3 pins from an op. The games do over $1,500 per month, which shocked the hell out of me as they are all a quarter per play. He takes home $750+ after the split which ain't too shabby cause he isn't depending on just the arcade money...he sells pizza and italian food which is where he makes his money.
 
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