Hey, Bee… it’s been a while since I’ve last seen you. I, like you would definitely love to see some type of arcade setup. The problem is not that we don’t have arcades, as we have quite a few in the Minneapolis-St.Paul area, the problem is they all suck (Too many redemption games, not fixing sticks, buttons, ever, no fighters, except for outdated Tekken 5.1). I have personally petitioned them to get other games in, even games that I believe would actually make money, but I assume they brushed it off.
There are several factors you have to look into:
Location: It’s in your best interest to put it around the Minneapolis-St. Paul area (within a 20 mile radius). It’s probably best not to put it in the ghetto, either.
Cabinets: It’s going to cost quite a bit, especially for newer games (which according to Fubarduck, are the ones that make the most money). You might be able to go the console in an arcade cab route, but you might get into legal trouble (maybe).
Game Selection: Fubarduck said that newer games make the most money, and older games (from the 70s to 1995) don’t make as much. Doesn’t mean that you shouldn’t have older games, but take this how you will.
Cash Flow: Let’s be serious, you probably aren’t going to get your cash from the cabs/games, you have to get it from somewhere else, such as vending machines, food, beer (which you need a license to sell it), etc. Anything else you can think of that can make money, it is in your best interest to use it.
Recurring Customers: Its always good to have customers that keep coming back, but there needs to be an incentive to make sure they do this. Offering competitions would help (maybe Tuesday could be a high score night where the winner gets put on the wall of fame, or if someone breaks a world record from TwinGalaxies or Gamest Arcadia, they get cash prizes, etc…). Also, you might not be able to rely on the same customers, as work, or other obligations will catch up to them, so you need to have new customers as well.
Demographics: Who is your business marketed towards, is it everyone or a certain group?
Advertisement: Honestly, other than Gameworks or Dave and Busters, I’ve never seen an advertisement for an arcade. Not in the newspaper, billboards, commercials, radio, not even on the internet! I’m sure that is one reason why people stop going to arcades.
Other factors you have to look into are spending (including bills, upkeep, buying parts or games), what your schedule of specific days will be, etc.
You should post this up in the Minnesota thread, I’m certain you will have people on both sides (an arcade that is economically feasible vs. an arcade that isn’t) that will debate on this. Also, you should seriously talk to Shogo (Denjin Arcade), Fubarduck (Arcade UFO), DreamTR, or Henry Cen (Chinatown Fair). Tell them all your ideas, and tell them what it takes make a successful arcade (one that makes a profit, meaning being able to pay bills and get money out of it).
Also, if you have business partners, make sure you are on the same page, and if there is a disagreement somewhere, bring it up and get it fixed. There was a place called Sava Media in 2005, which was supposed to be the “next” place to meet up and play here, but it was in Arden Hills (strike one), they didn’t advertise much (strike two), and the owners of the game store had disagreements on where they company should go (strike three).
You should also look at this, great article: http://www.shoryuken.com/showthread.php?t=221150