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Martin, Engineer
Category: General
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Experience:  i'm 41 and i never stopped studying and experimenting
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Is opening an arcade center a profitable venture? If yes,Where

Customer Question

Is opening an arcade center a profitable venture? If yes,Where can I really learn more about the business?
Submitted: 5 years ago.
Category: General
Expert:  JB Umphrey replied 5 years ago.
Hi and thank you for using JustAnswer!

Because today's kids now have access to video games at home (e.g., Xbox, Wii, PS3, on their PCs and Smart phones), arcades are no longer profitable ventures.

The answer to your question is "no."
Expert:  Martin replied 5 years ago.

Unless you have already a big video game collection and much personal interest in those games you will not find your profit in running an arcade.

Not only new games are rare, they are not that good anymore (less competition between manufacturer). You will always be able to assemble a more retro arcade with classic games but those take lot of space and electricity and maintenance (they always break).

Some machine can complement an entertainment business, but a stand alone arcade would require a lot of passing customer to be profitable. Gone are the days when a Pac Man machine was making $200/week. Crane machine still bring the money but they are not a customer magnet, something is needed to bring the customer in.

Not only the home and smart phone video game took over, the classics are now almost all playable with emulator like MAME on home computer. So there is only incentive to play very unique game with special controller not duplicable at home, but those tend to be gimmick game in the first place and they take a lot of space.

Pinball machine are still popular but those cost a lot, only one manufacturer make them anymore (STERN), they require LOT of maintenance. To be profitable those place need to be special in quality and scale (PATA in Pittsburgh come to mind).

Some existing arcade transformed into PC lounge with tournament play to keep head out of water. It worked for a while as they allowed player top of the line PC, multi monitor, racing chair and good network speed, but now PC cost peanuts and high speed internet is affordable so this avenue is also struggling.

The whole video game industry right now is not much in health. The last arcade stronghold (Japan) is in sharp decline and video game studio there are closing at alarming rate. The industry don't want to admit it but we are entering a second video game crash like it happened in the 80's.
Customer: replied 5 years ago.
Ahh Martin, that is soooo informative.. Thank you. However, I was thinking of importing some of d games into Nigeria.please are d facts u mentioned a global thing ? Nigeria is not so advanced with all the game stuff. Am actually toying with the idea of the arcade biz or a kiddies educational store (that will sell books,dvds,costumes). With ur experience, pls advice
Expert:  Martin replied 5 years ago.
I see. Indeed an arcade have lot more chance to be viable there (but still don't think to be rich with this). I am not that familiar with arcade in Africa but i remember that Sega (more a licensed distributor than Sega itself) continued to sell a lot of 8bit console in Brazil even when 8bit system were not selling anymore in North America, Europe and Japan.

Arcade usually need a permit. I don't know the detail of how this is working in Nigeria.

Electrically you will require those from the UK as they are 240V 50Hz (Japan and North America are 120V 60Hz). You would also need a solution for the coin/token as Nigeria coin probably won't work on them. The stability of power is also important, you don't want customers to loose their play because a power glitch happened.

You would have to pay lot of transport fee for the machines and the parts.

If you want to add some machine 5 or 10 to a more diversified biz it could work, just don't expect to be rich. Air hockey table are still a good money maker to have in an arcade.

The best to buy arcade game is to know about the good games with long lasting appeal and the boring one. You can learn a lot from online review of those games. You then go to an arcade market where sellers will come with hundreds of machine, you test them and bid on them. Buying machine on Ebay is a big gamble as you can't be sure if it will work. Video game can be bought as full cabinet but for more general games it's possible to just buy Jamma board (an industry standard) that you can swap in the cabinets you have. Some of the oldest classic come in cocktail table that do not take much space if you need tables in the first place.

You could try with a Ms Pac Man machine to see if it work and then build up one machine at a time. (if it's not working then you could resell the machine at the price you paid it as this machine keep it's value a lot). You really need to have someone around that have basic electronic skill to maintain those (especially for the monitor) or you will drain all the profit to a repair shop.
Customer: replied 5 years ago.
So a kids education store is adviceable? Probably with 1 or 2 arcade game at d corner?
Expert:  Martin replied 5 years ago.
A kids education store is advisable if this is what you want to do. Is it advisable economically, i would need to see your whole business plan and have the socio-economic of the particular area to really know. Indeed 1 or 2 arcade game won't be too much of a burden if they don't bring the money.

Even if most arcade are dead now in the USA, many convenient store still have one or 2 next to the counter. When they give the change to the customer they are often lucky to see the customer dropping a coin or two back into the machines. A lot depend on the space you have, if you have lot of it, definitively carry a air hockey table (you might even get the players thirsty from the action and sell them some soda :)).
Martin, Engineer
Category: General
Satisfied Customers: 4933
Experience: i'm 41 and i never stopped studying and experimenting
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