Further Thoughts on the Arcade

I’ve been putting a lot of thought into the Arcade idea of late. I do a lot of research on chances of success and usually come back with not much.

The most recent one I found was an arcade that had 125 games, 30 of which were old. And those classics did on average of about $1 a week. I still think this is a matter of mixed demographics. You can’t expect people going to an arcade full of new games to partake in classic games, these are completely different demographics. One is young and only cares about newer games, the other is older and likes it for nostalgia. Nostalgia guy isn’t going to go to the new arcades because they are full of crap games. [1. Trust me, I am this guy. I only see maybe 1 new game per year come out that is actually worth playing in arcades. I feel most arcades have gone down to redemption games and I really hate these games!.] I don’t think this is a game breaker, there are several classic arcades throughout the country in different formats that are doing quite well for themselves. It is just a little disheartening.

I have come to several decisions on the arcade though that I wanted to share:

1. It will be a bar. I didn’t really want to own a bar, but the more I thought about it, the more it made sense. Alcohol and games go together. I am looking for the 25 to 45 crowd so I don’t mind sacrificing the teens. And with an arcade that I am looking at $0.25 per play, I feel that I need to make a solid secondary service, alcohol does that in spades. Still I don’t want to have people coming just for the beer, so I want to only serve micro-brews and maybe some specialty drinks themed on arcades.
2. I have picked a name, I’m not going to announce it here as I’d like to actually get a domain that it works with. However, the base domain is not available. Not sure if I should just go with the name + arcade.com or not. I like the name, it sounds trendy, it doesn’t have the word arcade in it which could both either be good or bad.
3. At the beginning, I want about 40 games, 4 pinballs, and preferably two air hockeys, though I think this last one will get lowered to just one. In order to do this, in addition to a bar, I think I am looking at a 3,000 sq ft location minimum. I have already begun looking at potential places.
4. The places that I have been looking at have been geek friendly. What this means is that they are near other game stores, comic shops or similar type retail outlets so that I would get a good natural foot traffic from them. I am also considering places that have nearby food, such as pizza joints because although I will have drinks, I am not planning on having food at launch, I think that adds too much to the table and actually feel like I would need to increase the size of the place to do it.
5. Arcade games would need to be at least 20 years old. I toyed with the idea for 25 years for awhile given that a car needs to be 25 in order to be considered a classic, so I feel this is a good number for the classic moniker. The problem though is that I wouldn’t get to 1990 until 2015 which means it would be awhile till I got to those good silver age games. 1992 allows me to get some of the good early 90s titles with having some good ones waiting down the road. I still might hold onto 25 if I am only able to hold 25 games as I’d be more limited in number and putting limits on what arcades to use helps here.
6. Still trying to figure out how to fund this baby, that’s the hard part. I don’t think that I’ll get more than $25,000 from a small business loan (though if I do that’d be great), and I don’t even think that’d really be half the cost even. I’m going to need some creative ways to come up with the rest. I’ve already started putting money aside, though it is hard because I am also saving money for a new car which is a more immediate need.
7. I think I want to get about 15 arcade cabinets before I started seriously looking for loans and such. This is a lot, and considering that I am not planning on renting additional storage and that it may take awhile to gather these arcades, this will be difficult. The first games I get will likely be older games, especially if I worry that I might go with the 25 year plan above as I don’t want to have a game that is sitting around for 3 years.
8. The arcade will be going the route of the quarter. Originally, I had toyed with the idea of charging $5-7 for unlimited playtime. I have also toyed with tokens. But I want to create a space with little to no price of entry. I don’t want people to feel forced into buying X amounts of tokens, or have a high upfront cost. If you want to go in and check it out, you can. Spend $0.50 cause you come during lunch to check it out but don’t have time, fine. It needs to be easy to come in and play.

I actually think that I am getting to a point where I want to look into starting an LLC. Once I register an LLC, I can go out and look for a domain name and open a business bank account and then start moving funds there. Small steps, but I think it is small steps that I need to make. At the pace I am looking at right now, I don’t imagine that I’d get the arcade open before 2013. At this point if I were to pick a start date I would look at May 1, 2013, but even that may be a long shot. I may actually be looking at August or September.