Classic Arcades from an Arcade Owner

I recently found an article that a Utah arcade owner wrote about how his last year went in the industry. It is actually a really good article. It is rare to have arcade owners actually write stuff like this explaining what has been working, what hasn’t been working, plans on the future and thoughts on the industry. This might be for a few reasons including there just not being many arcades out there.

While I very much enjoyed and appreciated this article, I can’t help but take issue with one particular part. At one part, he goes into how his classic games are doing and he makes a statement that “the classics will have a tough time getting very far today.” He uses as prove that 3 of his classics, Warlords, Crystal Castles, and Ninja Gaiden are consistently his worst games, usually doing only about $20 a month.

To be sure, this isn’t good at all and I can understand that this can be frustrating to any particular arcade owner. However, there might be a number of reasons for this bad performance.

First, the Red Herring in his argument. He complains that these three games are traditionally the bottom three earners at his arcade but then goes on to say that CarnEvil (not exactly a classic, but it is older) sometimes does better than the new games and TMNT ranks #12 and that is with a bad monitor. I do think TMNT is a classic arcade game, one of my all time favorites personally and is a good judge of what a classic arcade can continue to do. He also has a multi-cade with classics, and a couple other older arcade games, think he has a NeoGeo for instance and these don’t get mentioned which means that they are middle of the pack, which means not terrible.

That brings us to the games themselves. I’m not entirely surprised that Warlords doesn’t do well. I’ve seen some of the writings and the videos of this arcade owner, and he is very high on the game, and looking at it, it looks like it could be fun. But I honestly never heard of it before this and I follow games. I also can imagine Crystal Castles suffers from the same problem. Ninja Gaiden is a little surprising because this one has more name recognition, but like the author mentions, this is a hard game and brings back the old school difficulty. I could see this one getting a fair number of initial plays but not a ton of repeat plays which may be the entire problem.

Thirdly, token disparity. A lot of arcades these days compensate for the loss of mainstream customers coupled with the increase costs of arcade cabinets by increasing cost of play for games. Many games these days cost $1.00 to play with $.50 to continue. The continuation being cheaper is actually a really good, but the higher play cost I think has been a reason why fewer people play in the first place. Like it or hate it, $0.25 for a play had a huge draw. It’d be the equivalent of if Jukeboxes cost $1.00 per song these days instead of the $0.25 of the olden days. If anything it is the opposite, you generally get 3 credits per $0.25 on jukes to keep people interested. Tangent aside, If you charged 4 tokens for Crystal Castles, you wouldn’t get $80 but you might get $50 per month instead. He doesn’t put in the totals for his bigger games but it is entirely possible this would up the ranking a tad.

Fourth, Demographics. I think there are three types of demographics for arcades. The 5-15 demographic which tends to prefer redemption games like those found at Chuck E. Cheese. The 13-24 demographic, this is where you find interest in newer arcade games like those found at Game Grid (Street Fighter IV, House of the Dead 4, Big Buck Hunter, etc). And lastly there is the 21+ demographic which honestly would take games from the first two, but also does really well with classics. The key to this last demographic is that they really don’t want to be around the kids and the teens as much, so if you throw a classic or two into a place where teens hang out (like the game grid), they really won’t be interested in going. I think a classic would actually do better in a redemption arcade (FEC) than a teen arcade because then they can bring kids and enjoy an adult game at the same time.

Lastly, cost disparity. New games cost a lot. Generally between $15,000 and $40,000 (hello SF4!) per game. Classic games can cost between $200 and $1,000 per game, I’ll say on average $500. Even taking into account the token disparity that I mentioned above, you are likely going to be profitable on a classic before you are profitable on the new one.

Let’s create an example. Let’s say use the $20 mark of Ninja Gaiden the article puts out for us, that is 80 plays a month, and the cost he lists for D&D of $200.1 Let’s assume a new game gets more plays despite the higher cost, and lets multiply it by 10, that’s 800 plays a month. This is, $800 a month. Let’s assume this is a $20,000 cabinet, not the uber expensive SF4  or a cheap one,t his is average. On the surface, $800 per month compared to $20 a month is astonishing difference, until you figure out that you aren’t profitable on the new machine for 25 months. On the $200 machine he is profitable after 10 months, 20 months if it is a more expensive machine at $400. So even though it isn’t rolling in a ton of money, it is actually MAKING money sooner. Now assuming that super expensive cabinet is still going to be profitable after the 2 year mark at the same rate, yes that would be a much bigger deal. The new game would have made up the profit difference in under one month after meeting the initial cost.2

I suppose a second lastly would be game selection. The arcade operator considers that maybe he should have bought Xybots instead of D&D: Tower of Doom for a new game this year and he is probably right. When you are only allocating 5-8 slots to older games, you probably shouldn’t be cannibalizing what another arcade already has, even if it is really popular. D&D is like a mix between TMNT and Gauntlet: Dark Legacy which Game Grid already has. Xybots would have been a kind of new entity and I think the action genre (like the beat ’em ups) would do slightly better with the teen crowd. I wouldn’t be surprised if he saw a dip in sales on TMNT when D&D came around. It isn’t bad to have two similar games, especially if one is really popular, but it’d be better I think to have a bigger variety.

Show 2 footnotes

  1. Which I think is probably close to average for him on classics because I don’t think he mights not having a lot.
  2. The classic game would have made about $300 in the 15 months that it was profitable while the new game was still paying off its initial sum, assuming the new game is still making $800 a month after two years (which I doubt it would be) it’d take about a week and a half to pass the classic in profits.