Arcade Business Models - Coin Drop Vs. Entry Fee

[@benjaminjmcgee]

How arcades work from an operator/owner perspective is interesting. I’ve been loving this content! (Unboxings are still the coolest vids you make) Thank you for sharing.

[@jbalien20]

In NYC, there's a new arcade club that opened up near time square. It's called Coexist Gaming. The least expensive price is $300 a year. Pretty much $20 a month. The club has a hip hop vibe. It's Kool. It's different.

[@nicsamazingpinballchannel7688]

Hello AH! I run Roanoke Pinball Museum in VA (one of those rare non-profits)... we're on free play currently $13.50/unlimited for ages 11+ and $10 ages 10 and under. Works great for our size and location. But if we were more of a barcade with drink profits at the forefront, we'd be doing coin/credit play instead. Sometimes people just want to hang out and drink and not play. "Your space will shape your place"! I'll be at Pinball Expo in Chicago this October giving a talk about things I've learned in the biz and on the road. Love seeing this type of "operator content" on YT. Keep it up!

[@arcadeheroes_coinop]

Awesome, I love hearing from other ops on their experience and perspective. Thanks for sharing that!

[@TheBigExclusive]

One of the issues with Bar Arcades is that owners don't use certain arcade machines because of food. Bar Arcade owners don't want people spilling food and drinks on the arcade machines. So Bar Arcades mostly just use stand up arcades machines, and avoid using a lot of sit down machines. And definitely do not use any arcade machines with hydraulic motion and movement. From what I've seen, they might have a designated eating area, and the arcade machines are off to the side. Or maybe the machines might have a small table near the machine to put down your drink.

[@IndieArcadeWave]

Great video man. You did a really good job of laying out the business model. I know of a handful of arcades that use quarters but as you said the majority are moving to electronic payments. A lot of pay to enter arcades in the arcade bar space, They make money on the liquor way more than the games.

[@JohnshiBRPG]

I know High Scores arcade in Alameda, California, has a one hour option or all day, which the latter is the equivalent of 2 hours pricing. I usually stick around for 1 hour since the amount of arcade cabinets are good enough for a small space. High Scores arcade is a mix of old games, some new games, and a few rare treasures along with game console inside vewlix cabinets and multi game cabinets. It is the only one in the East Bay that allows all ages with the entry fee. Otherwise, the majority of them in the Bay Area (SF, East, and South) are a few FECs like Round 1 USA and Dave & Busters, along with arcade bars with pay per quarter / token, except one in San Jose being San Pedro Social, which they made the games all free to play yet their selection is too sparse compared to Miniboss, very close to San Pedro Social in San Jose, with lots of games packed with coin drop in addition to varied drinks and foods.

[@georgewindsor2667]

my main complaint about Entry Fees/ Free play is game hogs, and the fact that some of these games are 45 minutes long. Time Crisis 3 for example. Its actually kind of hard to keep your arm up that long even . You have to have enough machines thatt they arnt all hogged, so 50 +? Also you nailed it with that "coin drop"/money on the line stuff.

[@SP95]

As a simple visitor the entry fee model is mostly meant for retro arcades indeed. A mall seems like the perfect location for a modern arcade business and also avoids attracting the kind of troublemakers we get in the heart of cities

[@bltxlettuce3444]

One thing I liked about a local free play arcade was it let me try a pretty wide variety of games, ones I otherwise might have hesitated to waste a dollar on individually I would be willing to try on free play, some of the stuff was modern(it might have actually been one of the test locations for Neon FM), and showed me some cool new stuff. I believe Round1 uses a traditional card system, but one of the options is a timed free play where it works only with the normal video games.

[@arcadeheroes_coinop]

Ah, I did forget about the ability of cards to work on a time system and switch back and forth. Would be interesting to find out the data on how the engagement/earnings do in that setting

[@georgewindsor2667]

makes me think a "free play night monthly" is the way to go on that then

[@knightmaremedia7795]

This is awesome.

[@TheBigExclusive]

I've seen some arcades where you are given a card. You can choose to pay for timed (like 1 to 3 hours), or pay a fee for "all day" play. When you scan your card, the scanner system automatically keeps track of each card. Whether it's all day play, or timed. When your card runs out of time, you simply can't use the card anymore. So there's no need to use colored wristbands, or to chase people out.

[@arcadeheroes_coinop]

One reason some locations may not use the cards and still use wristbands is that card systems are very expensive. You're often talking $20k+ to start. The bigger the arcade, the more it costs. A typical freeplay arcade with 50-100 machines, you're probably talking $40k-80k (could vary a bit depending on which brand of cards you go with - I might still be off on the numbers there as they don't publish costs and you have to get a custom quote, so just talking from the few quotes I've seen). I currently use tokens and would love to upgrade to a card system - but I simply don't have the money to afford it (no financing for those systems either).

[@TheBigExclusive]

@@arcadeheroes_coinop - Very good point! These systems are expensive.

[@lounowell4171]

Any thoughts on running an arcade for one weekend/friday night a month? Assuming you can hire out a community centre or something, and have the means to transport the machines without too much hassle? Like a LAN party perhaps with an arcade-core - could this be feasible?

[@eseeray2679]

I think more arcade games should allow a usb to be plugged in for save’s.

[@lounowell4171]

I'm trying to figure out how to do this when I start an arcade, not for anything too elaborate - but I want to let people customize their Virtual On mechs, save their Initial D progress, etc... Might even get more elaborate and host competitive pokemon battles or something, let people bring their own teams

[@TheBigExclusive]

Very interesting example with Darius! I didn't really think about that. What are your thoughts about Arcades converting older arcade machines to use new parts like LCD screens (instead of older original CRT monitors)? Basically anything that's not original to the machine. Do you think that's a smart move as a business owner to keep the machine running? Some people say that it takes away from the experience when you don't use original parts. That an LCD screen is not the same as the old school CRT monitor. That the player isn't getting the same "experience". Other people say they are fine with it, and sometimes is necessary because it's hard to find replacement parts. What are your thoughts?

[@arcadeheroes_coinop]

One step ahead of you on that one :) Thoughts on it here: kzbin.info/www/bejne/gqTMpWaLZZtmq7c

[@TheBigExclusive]

What are your thoughts about the entry fee model, and the maintenance of older retro arcade machines ? My understanding is that retro arcade machines are harder to keep running. They are older, parts break more often, and the manufacturer doesn't make spare parts anymore. Does the entry fee model cover the maintenance cost of machines?

[@arcadeheroes_coinop]

Not sure if you saw it but I have a couple of videos about retro games and fixing them - here's links in case you missed them: kzbin.info/www/bejne/aJjEfqGfobGrmq8 Fixing: kzbin.info/www/bejne/hGiUo4CgjJuDbpo As for the specific question though - It's hard to say. Galloping Ghost seems to cover those costs although I don't know how much they end up spending on that (with about 1000 games, it has to be very high). A lot of entry fee places that have newer or high-maintenance games (such as pinball) do seem to charge for those games to help cover said costs.

[@wacka.]

Is it possible to have some sort of card/fob that can be "charged" to work for X hours so after X hours they need to be "recharged" at a kiosk.... so it's like "freeplay" with the card which only works while charged... instead of the wristband situation?

[@arcadeheroes_coinop]

I want to say that it is but this is an area I'm not an expert on - you would have to contact the various card creators (Embed, Intercard, Seminox, Sacoa, Amusement Connect, RFPay, etc) and ask if that is an available feature for their system. I can't imagine that it would be difficult to implement however

[@georgewindsor2667]

gotta find a way to "drink-proof" the games. ive though about this alot, at least a "shield" around the PCBs

[@arcadeheroes_coinop]

It hasn't been the PCBs in danger as much as the controls - we put a strict policy in place after some kids spilled a bottle of coke on the air hockey table. But despite that, we still get people ignoring the rule and bringing stuff in all the time, spilling on the floor, on controls, on the wood or spitting gum on the floor, etc. Outside of the games being covered in that crap, it's just gross.

[@georgewindsor2667]

@@arcadeheroes_coinop im with ya,...but a regular arcade wont work in my area... a barcade that serves mostly food and charges high drink prices will be more likely to succeed. What i would love to you see do (so i dont have to ) is analyze the demographics of the customerbase in a region, spreadsheet it and figure out what the average patron in this region was vs this region, vs income levels etc. some of these really boring economic numbers are the magic i need to know

[@arcadeheroes_coinop]

@@georgewindsor2667 That's one place where I'm not very good :P I want to say that I did that way back in 2007 but I lost all of the data - I do recall however that I lowered the numbers so as to not be "rosy" and my estimates were still way off of reality. That said, when you're shopping for commercial real estate, they often have some demographic data for you to chew on, it just doesn't look at things like spending habits. That's the sort of thing you need to hire a pricey consultant for - although I've often been leery of that myself. There used to be a location here that did hire a consultant I know, spent about $30-$40k on their services, but then the location was closed in about a year (this was pre-pandemic!). That said, consultants can still help you figure things out - if you have the money, they can be essential, they just can't manage the biz for you afterwards

[@SP95]

Water Gun Fun With Ice Walker by Coastal Amusements is probably the easiest drink-proof arcade game by design 😂

[@georgewindsor2667]

i watched a video on Nickle-Mania, and alot of the machines cost like 5 nickles....so whats the point...

[@arcadeheroes_coinop]

Their's is a model that has done fairly well where I live, in good part thanks to there being a high population of kids around. It does affect perception for me though - I've often had people tell me that "25¢ is expensive" because they're used to Nickelcade/Nickel Mania.

[@JohnshiBRPG]

@@arcadeheroes_coinop And that will lead to the downward spiral of low cost entitlement that does not take account of the entry fee imposed. It's the feeling of low price or no additional money paid per play that gives a feeling of good bargain. We don't know if that nickle cade and entry fee model really gives them profit compared to pay per play.

[@maximepivi]

how much are your newer games per play?

[@arcadeheroes_coinop]

Most new ones are $1 to start, less to continue, but it can depend on the game. Some won't get more than 2 coins to start, but I'd only do that on certain low cost (in the sub-$7000 range) titles

[@maximepivi]

@@arcadeheroes_coinop interesting. im actually watching all your podcasts one by one. its very informative intel. i will start a arcade business here in Guinea. but im not rushing, i want to make it work the way it works (the proper way). so, intel first, plan second, implement later. XD thank you so much for the intel

[@arcadeheroes_coinop]

@@maximepivi You are welcome - take your time to get it right and feel free to ask more questions!

[@maximepivi]

@@arcadeheroes_coinop thank you, i apreciate it.