The Business and Downfall of the Arcade: Help me save it

Hey people, FcknDrrn here and Im here to ask the FGC some questions, I thought this would be the best place. Basically my brother, a couple friends, and I would really love to start a business and we were throwing some ideas around and the thought of opening a hobby shop/arcade/barcade seemed really interesting. So before I get sunned out for even thinking its a good idea, let me tell you guys what I do know and some things you guys can all help me out with. As to why i picked the UMvC3 boards to do this, its all about Mahvel and the game took me from an interest Iv had in fighting games to a true passion. I watch all the streams, follow the top and not so top players just like Sunday night football, and the UMvC3 boards here on SRK have always been extremely good to me and Im looking to give back to the FGC, for real, so thanks to anyone who ever answered anything Iv ever posted here.

Let me just briefly tell you why I would ever want to go into this risky business environment. I am currently a senior at the State University of New York at Albany about to start my last semester of my Environmental Science degree and to be honest I’m fucking terrified. I’m terrified of the job market, 50% of college graduates are unemployed so I sit here thinking about my future and it honestly sucks. Iv grown up reading comics and playing fighting games and video games in general, as I’m sure a lot of you here have as well and who wouldnt want to love what they do? Im not saying im not passionate about my degree but ill have that piece of paper forever, but right now I have a real opportunity to do something Iv dreamed about since the first steps I took in my local hobby shop. I currently have the support of my brothers who are real adults with real jobs and real families, that means they could be serious investors as well as full time owners but I refuse to let them down with a failed business.

Here’s what I know in no particular order:

Business is hard and arcades BLEED overhead costs. Iv seen it first hand, utilities, rent and labor adds up quickly and everyone underestimates them when thinking about running a business. I know that comic shops generally only turn around 35-55k in profit and thats not even close to what the profits would look like the first 1-2 years. I also know that comic sales are up around 15% since 2010 and things look good in the market. I also know that in terms of a hobby shop/arcade anyone can by an xbox, a game, and play online and never step foot in a store. People including myself can download every comic book ever printed for free. I also understand the golden mantra of starting any business: Location location location.

Aside from all this negative, there are things i know that make me think this could be an excellent idea. For one thing, rent is really low just about everywhere. Other costs I happen to be in a position to absorb, are website design and upkeep as well as IT in general. While going to school here i have met a few kids that play FGs like me and like me have absolutely no where to go besides the friends you already have. Sure at school there is a small group of kids that play magic, SSFIV, and whatever but theyre more into TCGs more than anything. Thats it. I live in the CAPITOL OF NY and I get that its not NYC but come on, there’s literally not one place I can get to on the bus where I can meet up with people everyday or every week to play in a small tournament or just run casuals. My real home is in north NJ where I used to play heroclix back in the day, magic, and vs system and I used to hang out, make friends, and compete every week and it was the BEST but they never did FGs. I also think that business models like the type that Next Level uses, a subscription base instead of the per play model of the 80s and 90s could be successful elsewhere. My idea is to combine some real arcade machines, a real comic shop, real FG tournaments, real magic/yugioh/warhammer merchandise and tournaments. This way combining revenue from multiple mediocre revenue streams could help cover profits and create a really awesome environment that people would love to compete, shop, and hang out at and give them reasons to get out of their houses, online gaming cant come close to competing in tournaments and being involved in the community. Lastly, I hope this isnt a dumb idea since every schmuck in the history of humanity has wanted to open a bar but I really think that adding a tasteful bar to the arcade machine section of the establishment could really help with the revenue bleed of your standard arcade or hobby shop and make this whole idea viable.

So I humbly ask you for your advice, FG Warriors. Id love to give back to community and its so disheartening that I cant find one place less than an hour from either of my homes in 2 separate states to compete or just immerse in the community. Is any of this worth doing, any “secret” money sinks I could miss in opening a business like this, am I just insane for even thinking this is a good idea? I just really need feedback, and in the meantime ill be crunching the numbers for starting this and keeping it going.

Ill be happy if anyone stays awake by the end of this post, if you did THANK YOU

I would honestly get in contact with someone like Valle who has had success running these types of venues.

Thank you, how do you suppose I get in touch with him?

this isn’t something the boards can really help you with. ask valle/whoever runs the cali arcade, ryan harvey (fubarduck) of austin’s arcade ufo, and/or henry cen of new york’s next level. twitter, facebook, their arcade site contacts, whatever.

from what i can see, it’s a terrible idea financially and an amazing idea socially/community-wise. good luck.

No offense, but I just find it a little funny that you are terrified of the job market yet your alternative is opening an arcade of all things.

Hope you manage to have success, though.

Ahem one thing all those arcades that are active have in common?
A large relatively dedicated player base or a great location.

If you don’t have some kind of dedicated player base or an attraction next to you don’t bother.

Real talk. In short, you’re insane, but if you want to put your finger on a worthwhile endeavor
that could “still” help the community (don’t mind the avatar) holla at your boy.

IMO if you’re not tying in the arcade as part of another business, you’re fucking up. It’s 2013, you have to have something else going and make the arcade just part of the venue. I respect those few that are still running traditional “play games here” arcade establishments, but it’s just not something you can ever turn a real profit on anymore. Why try to make money solely from the games? That’s just purposefully limiting the amount of money you could make. Most people play video games for the “soul” or just the enjoyment. Not really the money making and they know it can’t really make you money either. Especially not games they can play at their house for free and with all of the customized controllers and joysticks they may personally have.

I always said that if I ever won the lottery I would just open up an arcade because that way I would have way more money than I would need to cover the potential losses for a lifetime. Though to try to make a middle class man business out of it…nah.

As stronger netcodes (like GGPO) and faster internet speeds improve online play, the incentive to make a business that solely focuses on people playing games at some place is only going to diminish further. It’s not like Japan where you’re on a small island and it’s such a part of the culture where it still makes some kind of sense.

For something that could actually work, look at what’s already working. Get a little more ambitious than just “herp derp arcade” in 2013.

In order to really get something out of this, you’ll need to find the extra ways necessary to bring in people who normally wouldn’t come to an arcade otherwise. Otherwise you’re just bringing in the same tiny pool of nice fighting game players and not doing anything to expand the scene or make you more money.

Might as well have a vhs rental store and a record store in the back of your arcade, lol.

If you’re worried about your future, the last thing you should worry about is opening up an arcade unless you deliberately ruin your life financially.

Seriously if you want a scene that bad, move, it will be cheaper.
If you want to be your own boss? Open something that will be profitable.

Insert Coin has a good business plan, but also check its location it’s friggin LAS VEGAS and it’s patrons
aren’t necessarily part of the FGC. I know another game arcade in Orlando that does pretty well but again
it’s FRIGGIN Orlando.

Next Level is cool but it also had a dedicated player base follow it after having a seriously long history
at the Chinatown fair THE arcade to go to.

I’d say before diving to deep, a multi faceted store could possibly attract, but look at the DEDICATED venues
already in place. How long have they been there? Are they doing it right? How close is it to your possible patrons?
(Crucial, since distance is the biggest factor when deciding where to go. Loyalty get fucked.)

Thank you guys for all your insight. The more I think about it the more I think I’m insane for imagining this working out. I guess I do see the irony in my current situation at the current job market and a goal of opening an arcade, even if it didnt need to be an arcade in the traditional sense. Maybe I’ll just try and move to the city :confused: kind of a shame though

It is insane. Move to the city, if you need a job I’ll hook you up. You won’t be using your degree though.

Ha thank you, what kind of job? I’d love to move to the city, the job would have to let me afford an apartment though