Starting my own arcade

Shaggy August 11, 2007 14

This isn’t news as we generally post – just rambling on. I am on my way to getting my arcade business started as yesterday I went up to the State Commerce department and registered my business. Within two weeks I am supposed to receive a certificate showing that it is officially recognized – then I will work on getting the loan so I can buy a number of games.

I have been wanting to do this for as long as I can remember. It started when I originally saw the movie Tron, where Flynn owned and operated his own arcade and on top of that lived in it with an apartment above. I thought that it was coolest thing ever and have wanted to run an arcade since. I have managed an arcade before for about a year and it was a fun experience and learned much of what I needed to know doing that.

A few people over the years have attempted to talk me out of doing this or discouraging me with some negative thoughts about the idea but I will be moving forward despite that. I think I can make my arcade successful. That might be foolhardy in the view of some people but passion is part of what makes a business work. Marketing it to others will be a challenge but my local competition makes it easy for me – they only rely on word-of-mouth, which is possibly the slowest way to advertise. I will be using other means to get the word out and remind people of what arcades are. Once I am closer to opening I will post more about this along with pictures of the arcade itself. – Shaggy

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14 Comments »

  1. twistedsupreme August 11, 2007 at 11:21 pm - Reply

    I know it’s going to do well and I can’t wait to see it when it’s up and running. I do have a request however. When you’ve set up this arcade, can you come and set one up in my home town too!

  2. jleung@varcadeentertainment.com August 13, 2007 at 2:24 am - Reply

    Welcome to the business! It’s always good to see people taking an interest in arcade route operation. When we started our business in 2002, a lot of people (including my now wife, then girlfriend) were skeptical. Mind you, not in our ability to run the business but rather whether the customers would be there. Well, it’s 2007 and I’m happy to say that the our company is doing better than ever!

    The best advice I can give you is to not let people get you down. A lot of times the people putting you down are the ones who have either failed to start a business themselves or are skeptical about the arcade market. I am here to say that if you have the passion and the patience to see your business through and you can provide quality games the customers will eventually come.

    I wish you the best of luck and if there is anything that either myself or Varcade Entertainment can do for you, please let us know. Welcome to the arcade operator brotherhood!

    Jonathan Leung
    Varcade Entertainment
    http://www.varcadeentertainment.com

  3. SpooNMan August 13, 2007 at 5:34 am - Reply

    Good luck! I wish you all the best. I have always wanted to do something like that myself As a kid of the 70’s/80’s I grew up in the mall arcade and I think they are going to make a comeback in a big way! A trip back to an arcade full of classics you played in your youth can bring back a lot of great memories 🙂

    Again, good luck with your arcade. All the arcades (all 2 of them) here in NY are only full of crane games, DDR and 1 pinball machine.. no classics anywhere. It’s so sad.

  4. Shaggy August 13, 2007 at 7:25 pm - Reply

    Thanks guys, I appreciate more than you know. Everyone always talk about the risks involved but I think that is part of success. I have heard some operators speak poorly about the market too, but it was probably in an effort to discourage competition. It’s good to hear how well you are doing there John – the beginning has to be the hardest part.

    I plan on having a mix of new stuff and classics. I know classics have a tendency to require more TLC but I think it’s best to play a classic game like these on the real thing in a real arcade – there isn’t anything else like that feeling in the world.

    No updates to post about now – just waiting for the certificate to come, although I talked to my realtor today and there is a good spot that looks like we might have secured. If it turns out to be the place, I’ll be posting some pictures of what it looks like before as well as the transformation to after.

  5. David L. August 14, 2007 at 1:07 am - Reply

    That’s awesome…that’s my dream some day too but as of right now I cannot start an arcade even in my hometown (Fullerton, CA) as they don’t allow arcades in my city. I could go elsewhere but I always wanted to start it in Fullerton.

    Where is your arcade going to be? If its in the Southern California area, i would like to check it out!

  6. Shaggy August 14, 2007 at 1:56 am - Reply

    It’s absurd that there are still cities out there which ban arcades from existing in their boundaries. I know how it feels though – I could go to another city but I would like to open in the city I currently live in (West Valley, Utah) which unfortunately isn’t by you but I guess if you ever stop in Utah for whatever reason you could drop by. 🙂 We have a few arcades here, they do pretty well.

  7. sixto G. October 8, 2007 at 10:48 pm - Reply

    hello I have a few quesion about the buisness, like how to begin, how much money is needed to begin, or can I rent the arcade? If someone could get back to me on how to begin this process I will appreciate it! THANK YOU FOR YOUR TIME Sixto G.

  8. Lucian February 24, 2008 at 8:33 pm - Reply

    Guess everyone stopped posting. I’m trying to open an arcade in Austin, Texas, So far I have everything planned out liked the games I want and how much insurance and all those other extra cost (coin-operated machine Tax in Texas=gay) and the only thing left is to get the small business loan from a Bank. I’m planning on doing that tomorrow after I finish putting together a business plan, which is something the bank and the people you are gonna rent from are probably going to want. Ill post if when we have an update and hopefully banks aren’t reluctant to help put arcades.

  9. Shaggy February 25, 2008 at 12:01 am - Reply

    Yes, I do not agree with the taxes on separate machines but with a tax hungry governments, local and federal it’s something that likely won’t go away (especially looking at the rhetoric spilling out of current presidential campaigns).

    One thing the bank will look at is how much collateral you have – whether it’s land, a house a car, cash on hand, etc. They will also take CODs but they generally have to be done with the bank you go to. If things don’t work out, talk to your local distributor and see if they can give you a reference to Firestone Financial. They’ll look over your credit and financials and if everything fits they’ll get you financing on machines.

    Keep us informed!

  10. Baustin April 2, 2008 at 12:06 am - Reply

    Hey arcade great idea in 2008 a place for teens to hang out w/out being harrassed and able to stay outta trouble,in there hood. I wanna open one in my town of homewood,il can some one give me an idea of the first step.

  11. Valdez April 5, 2008 at 4:36 pm - Reply

    Hey all, just stumbled onto this website because I too am in the process, along with a few dedicated partners, in starting an arcade in my town. The local arcades are jokes around here, a few others and I decided we can make one ten times better than anything in town, and believe me, that won’t be hard. If all goes well, being early in the process, it will happen sometime for sometime. The projected site is my town in Southern California, it’s aimed toward the older crowd, 13 and up, with only the most popular games. Questions? More info to follow.

  12. gary cole April 26, 2008 at 11:21 pm - Reply

    Been reading the post with interest. My boy just won a Time Crisis 4 arcade machine 12,000 and we are looking into selling, starting a arcade shop and looking into what others are wanting to do here. Just wondering if you can still make money on one tho?

  13. Shaggy April 27, 2008 at 3:22 pm - Reply

    Yes arcades are still profitable and despite the rising gas prices it seems that an arcade in the right place is still capable of making money. That’s why it’s important to choose a location that has a lot of foot traffic – that could be a mall, popular strip mall, a standalone store located in an area where many people walk by etc. I was looking at a standalone store last year that I lost out on to another business – it was on a corner across from a library on a busy street and basically in the middle of a residential area that would have been perfect as it was just down the street from a jr. high to the south and a high school to the west where every day kids would pass by it on their way home.

    Of course once you have the location, then you need plenty of capital and the games to in it. TC4 is actually an excellent game to have that should be a money-maker for some time to come. Of course it will take a while to make up $12k (although you said he won it?)but Time Crisis has been the most popular game at every arcade I’ve seen it at. We had TC2 at the arcade I managed and it was a consistent money maker that they replaced eventually with TC3 (it’s actually one of the few games being played by two people on a Monday in that video tour I did of the Hollywood connection) ; TC3 is also the most popular game at another arcade near me called the Nickelcade – so TC4 will probably be good for the next few years. I’ve thought of getting it for my arcade but $20k for the deluxe version is hard to swallow when my budget is $25k.

    I think it’s important to carry a few new games but it’s not necessary that EVERY game you buy at startup is brand new. There are a lot of games you can get used that still make money. For example: Ms. Pac-Man. It won’t break records but it’s proven to be consistent despite being 26 years old. Namco released a Galaga/Pac-Man/Ms. Pac-Man multi-game cabinet for about $2500 that is a smart buy.
    Other money making games: DDR – although if you don’t want to pay the extra premium for the DDR name (which is an extra few thousand dollars unless you find a good deal) there is Pump It Up!. Golden Tee generally does pretty well, while these days it’s become a “bar game” due to popularity in bars it still does well in arcades.
    Big Buck Hunter is also one of the best selling arcade video games out there right now.
    Silent Scope is a few years old but I see it being played often. Same with Star Wars Trilogy and SF Rush 2049.
    NASCAR is the most popular racing game I’ve seen at the moment that also gets consistent praise from everyone I’ve seen play it and it’s reasonably priced.
    If you have the money there are some great attractions out there” the iGo IMOtion cabinet with Panzer Elite Action uses a motion base and is quite unique; Let’s Go Jungle was so popular when I saw it at an arcade that I actually had to stand around for almost 45 min. for a chance to play it although that was several months ago, I need to pass by again and see how it’s doing but I’ve heard that it still does well; Slambots is another unique game that we’ve talked about on AH, you can find more about it using the search function but it’s not a video game – two players control robots where you slam into each other and colored buttons on the sides of the enclosed arena.

    If there is a distributor in your area, you can also go and talk with them about what they see as being most popular in your area. They should know what games sell the most and they generally here from their clients about how well each game does.

  14. yani August 15, 2008 at 12:16 pm - Reply

    really great websit shuld go to it

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