Funworld March 2010

With successful home video units changing the way family entertainment centers (FECs) fill their facilities, some critics have declared “game over” for the arcade business.

But don’t set those machines out on the curb yet.

Experts in the industry see the value of video, too. Here they explain eight ways to keep arcades up with the times.

Squeezing the Player
FEC owners try too hard to maximize their income per play, says Rick Hunt, general manager for Austin’s Park in Pflugerville, Texas. Charging two dollars or more for one turn, he contends, puts a tight squeeze on a player’s wallet. They may initially swipe their card without a second thought, he says, but that freewheeling spending spree won’t last long when they realize they just plunked down $150 in an afternoon.

Austin’s Park charges only a quarter for most games; newer ones, like “Guitar Hero,” go for a dollar a pop. “We more than make up for it on volume,” Hunt affirms.

Hunt believes guests will return more frequently when they spend less per trip.

Smart Spending
What’s the biggest mistake FECs make with their arcade selection?

“People opt to buy all the new stuff they possibly can,” says David L. Bishop, senior vice president/chief operating officer for Namco Cybertainment Inc. in Bensenville, Illinois. “People equate new to good, and that’s not really true in this business. It can be, but not always. We talk to people about this all the time.”

FECs can waste a lot of money if they buy an inferior just-on-the-market game, he adds. Namco, which manages more than a thousand locations, has several titles in its top 10 games that came out a decade ago.

What’s Hot?
Facilities must offer a “wow” experience for gamers to leave their home video systems behind, says Kevin Williams, director of KWP Limited in the United Kingdom. He cites three main categories that are unachievable on the players’ couch (or at least a vast upgrade):

• Two-player games like “Deadstorm Pirates” by Namco
  
• Motion simulators like “Hummer” by Sega and “Aquarace Extreme” by Simuline
  
• Unique interfaces like “Dance Dance Revolution” by Konami and “UFO Stomper” by Triotech

As for the future, the industry will head more toward intuitive interactive games, Bishop anticipates. “The Wii format has made a lot of manufacturers take notice,” he says. “We’re starting to see less eight buttons on a dashboard and more about ‘Guitar Hero.’ It’s more physical rather than an esoteric video game.”

In for the Long Haul
With a hefty price tag on many new video arcade games, owners generally want a machine that will stay popular for years, Bishop says: “A good driver or gun game can last forever.” As examples, he points to “Cruis’n,” “Time Crisis,” and “The Fast and the Furious,” where even if a manager wants to go back in the series, “you still have a great game.” Driver and shooter options also appeal to a wide audience, says Hunt, owner of about 100 video games. “You, your wife, your 13-year-old daughter, and your 8-year-old son all can get on ‘Cruis’n World.’”

Pump Up Promotion
To help ensure a game stays sizzling, Hunt promotes a new title on a 30-foot electronic billboard on the road outside his facility. Other PR tactics include placing the latest games in a high-visibility location, posting high scores to get competitive juices flowing, and having occasional specials, suggests Barry Chapman, owner and general manager for Times Square Entertainment in Katy, Texas. For Steve Krongard, his best video game promotion is running a tournament with the dance game “In the Groove 2.” The owner of Nickel City in San Diego, California, sold his two older versions of the game to buy this hot upgrade. Participants pay $20 each for admission, pizza, drinks, and the prize. Only two people can dance at a time, so when they’re not up, “there’s nothing else to do but eat more food and play video games,” Krongard says. Besides this additional revenue, the tournament brings in an older demographic: 17 to 25 years old versus their normal 3 to 12 years old.

Other Avenues
Of course, arcade games have a home in FECs, bars, and hotel game rooms, but James Sinclair sees profitable opportunities elsewhere, too. Sinclair, principal for OnSite Consulting in Los Angeles, California, advises casinos to add machines to their employee break rooms.

“Arcade games are this untapped market that some people pay very little attention to,” he says. Instead of watching TV or chatting with a co-worker, staffers can casually drop in a few quarters. “They’re just looking to pass time, not to break a record.” Games in this environment have a quick return on investment and the potential to generate hundreds of dollars a day, Sinclair says.

“The point is to not make a business empire out of your employees, but it’s foolish not to take advantage of the base there,” he says. “There’s no reason not to engage in the process.”

Old and New
As mentioned above, FECs don’t need to go on a credit card binge for their game room. However, owning exclusively dated titles can hurt revenue. “It’s like having a clothes store but only selling used clothes, or a movie theater only showing old movies,” Bishop says. “Some gamers are very fickle.”

Chapman admits he waited too long to bring in fresh games. “Our play went down,” he says. Yet, he doesn’t regret holding on to classics like “Pac-Man” and “Galaga,” which continue to attract “the old-timers.”

Krongard says nostalgia games make up a big part of his free play section. They keep parents occupied while their kids enjoy the other attractions. “So when they say, ‘Mommy, Mommy, I need more money,’ they give them money because they’re playing ‘Pac-Man,’” he says.

Status Update: Hole-in-One
Arlington Heights, Illinois-based Incredible Technologies, creators of the popular “Golden Tee” series, believes social networking is another crucial way to connect with the game’s rabid fan base, says Gary Colabuono, marketing director.

Players have the ability to record their great shots and instantly post them to YouTube. In addition, they can send hole-in-one videos to their smart phones and their Facebook pages. “They want to show off their achievements,” he says. “This brings value to the player.”

Online live play competitions set the “Golden Tee” experience apart as well, Colabuono says, where players feel as if they’re right next to each other, even though they’re an ocean apart. “One guy may have a Guinness in London and the other has a Bud Light in Chicago. That immediacy is very, very important.”

Contact Contributing Editor Mike Bederka at mbederka@IAAPA.org.