Boyks

D Tier Internet Sensation

Twitch Partner, Variety Streamer, Speedrunner, Pepsiman SGDQ 2016/2018, Retro Console Modder, Indie Dev, Mashup Artist, Ex-Card Gamer, Co-host of @RuffCuts, Cat Dad.
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Ryyudo
@Ryyudo

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Video arcade games aren't hit earners anymore. How do arcades today stay alive?

Most arcades now offer services around the arcade such as snacks or food, alcohol, karaoke, bowling, or entire game stores, offering unique experiences to drive foot traffic.

That said, any place that relies on the arcade to carry its own weight needs to include games that are high-earners—providing significantly higher returns than what's invested.

And honestly? Arcades effectively becoming a gambling din for youngins is not off the bingo card for these companies.

Today, we talk about Redemption and Prize games' Earnings & Upkeep and Inner Workings.


Earnings & Upkeep

Once again, we're pulling out the math!

A reminder of the prior equation to estimate earnings per hour:

  • ([cost of 1 credit] * [# of players]) * (60 min./[est. mins. for a credit]) = Earnings Per Hour

I pulled up YouTube to watch a Mega Stacker game: 23 seconds.

Let's just round that to 30 seconds, for ease.

  • $1 per credit (remember: premium games, premium prices). 1-player game. Estimated 30 seconds to game over.
  • ($1 * 1) * (60/.5 minutes)
  • $1 * 120 credits an hour = $120/hr(!)

Needless to say, that's bank for a machine with a few lights, secure doors, and recorded lines.

What about the cost of repairs? "lol," said the arcade tech. "lmao."

I only needed to repair our Mega Stacker once, a motherboard failure, and Namco expedited a new motherboard for it in a day since that machine was so high-priority. It's a simple machine, perfect for any arcade owner or Schmoe with extra space looking to bring in money (e.g. Wal-Marts, movie theatres).

Redemption (or Ticket) games are high-earners as well, but reverse the gameplay loop and cost: Low price but fast games.

Pulled up another YouTube video to watch a random ticket game: SpongeBob SquarePants Ticket Coaster Six. Seconds.

Six seconds from when the ball begins rolling down to when it hits the end of the game.

  • .50 per credit. 2-player game. Estimated 6 seconds to game over.
  • (.50 * 2) * (60/.1 minutes)
  • $1 * 600 credits an hour = $600/hr (!!!)

Now, this is overselling it. Folks will try to time shots and not freely toss money at the machine. We're honestly looking at 20-30 seconds a game, or $181 - $120/hr.. Folks will get bored of these quickly as well, so their retention is lower.

Small Prize (e.g. Crane game) machines, similar to Redemption games, are low-cost quick games.

Compared to Dance Dance Revolution ($10/hr) or Time Crisis ($15/hr), it's a no-brainer why Prize and Redemption games are the backbone of many arcades today. Ironically, many Video arcade games seen today are Redemption games. Often, they're built off other games such as Flappy Bird, Fruit Ninja, and /checks notes Hokuto no Ken?

A Kung-Fu Panda arcade posed next to a Hokuto No Ken FightingMania arcade machine. Both have six punchable sensors lined along the side of the main game monitor with a seventh one in the bottom-middle of the screen on Hokuto No Ken. Kung-Fu Panda is made by Andamiro, the same company that makes Pump It Up. Konami made both FightingMania and Dance Dance Revolution. Imitation is the sincerest form of flattery.

While there are "opportunities" to win in all these games, the quotation marks are doing some heavy lifting.

Inner Workings

It's possible you now realize arcades have taken a similar approach to gambling dens: Pachinko Parlors, Casinos, etc.. They hit the Skinner Box similarities; Hit button, receive reward (sometimes). Numerous game companies have made, or make, gambling devices; casino-like arcades have been in the back of their minds.

A convention room with multiple slot machines. An advertisement for the Silent Hill slot machine is presented at the front and left. Konami's name hangs above the room in bright, red letters.

That said, there're a couple of sticking points. How can they legally set children up for gambling and how can arcades ensure they're making money back on prizes?

Both of these are answered with one thing: These are not games of chance but of incredibly unfavorable skill.

Stacker needs to make enough money to pay for its prizes and earn a profit. Still, folks absolutely need to win otherwise the game appears rigged.

The solution?: Stacker decreases its difficulty the longer a prize is not won. What starts off as an effectively impossible timing window becomes wider as losses stack (hehe) up. Even as the timing window widens, it doesn't become easy -- it's a skill-based game!

This difficulty slider can be pushed out for approximately as long as it's needed to earn a profit. Ours earned ~$1000 for a ~$250 prize, but that could be $1800 over two weeks to win followed by $400 to win few days later, and then $800 after another week.

U.S. crane games work similarly. The claw strength increases a bit after losses. Japanese crane games have a constant weak arm strength but it works as a puzzle keeping players retained and working towards a win. You can win faster if you're good though!

Ticket games convert real money to real-fake money that can't be used anywhere else except that arcade's redemption counter. Think of casinos in Japanese video games where you convert your real money into tokens that can only be used there and exchanged for a prize.

Most players pay around 3-6 times the cost in ticket games for that same prize from a store. Arcades buy in bulk as well so the prizes are cheaper per item. Some prizes could be shared such as candy for the ticket counter and a Candy Crane machine.

A crane machine labeled Candy Crane with its wording designed to look like peppermint stripes. The machine is mostly black with silver trim. There's a sticker on the front glass that reads "Play Till You Win." I ate so much candy from this thing when I was 5... The candy was probably my senior by 3 years (joking, probably; we cleared ours out after some time at least.)

These machines aren't complex, don't require much mechanical know-how, and bring in profit. Thus, we get to the landscape we see today:

  • Prize and Redemption focused arcades with little maintenance. They're also generally smaller machines, more bang for the real estate.
  • Rhythm games to bring in nostalgic and consistent foot traffic. They're also attention-grabbing and energetic.
  • Activities beyond the arcade such as bars, bowling, and shops entice folks to stay longer and spend more.

While some may be unhappy with the current state of arcades, there are positives: Video (but mostly Rhythm) game lovers still get access to arcade experiences that are expensive to replicate at home, locations can become profitable with a bit more finesse and understanding of the markets, and arcades function as hangout spots for folks who don't want to only go out for video games.

A notable example is Akihabara Arcade near Denver, Colorado. Akihabara Arcade would likely struggle any other time with their heavy focus on Japanese arcade games, yet they've expanded their business twice now.

Akihabara Arcade needed the distance from the 80's and 90's arcades to build nostalgia and a more-common understanding of Japanese games. It offers unique experiences compared to home consoles by providing a Japanese-influenced arcade. As a (delicious) barcade, it's not entirely dependent on its games to keep the business afloat and even attracts the less-gamer audiences there. Children are also allowed, with adult supervision, up until 8:00 PM so families can experience the arcade.

We'll never truly revive whatever your definition of "The Golden Era of Arcades" was, but folks' souls still burn to this day with operators making it work and collectors providing machines to events such as various fighting game tournaments, MAGFest, and many others.

Much love to those who keep the spirit alive. It didn't look easy then and looks even harder now!

Next Stage: AMA; Ask Me Anything -or- They'll Never Be Pinballin' /Spits Cereal

The original reason I started writing this small series was to explain the current landscape of arcades. I think I've accomplished that but I'm sure there's plenty I've missed, remaining curiosities, or general questions about anything.

So I'll open the floor for an AMA via the comments below. I'll answer them as the next Chost if there are enough questions!

So I'll open the floor for an AMA via the comments here. I'll answer them as the next Chost if there are enough questions!

If not, I'll simply talk about pinball machines because they're neat, have a spot in the current arcade landscape, and instead answer any questions as replies. 😌 Thanks for the insane support these have received so far, as well as thanks ahead of time for any questions!

A close-up shot from the front of a pinball machine named Total Annihilation Pinball


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in reply to @Ryyudo's post:

This has been such an interesting look into the economies of arcades; it makes total sense why things have developed the way they did given this information. Thanks for sharing!

As far as AMA questions, do you think things like having a fighting game local grow up around an arcade can help them support themselves, both in terms of regular traffic/customers as well as the possible upside of renting the space on some regular cadence?

This entire series is extremely interesting and informative! Reminds me, as all gambling adjacent things inevitably do, of Kaiji. Would absolutely love to hear your thoughts on pinball, both in the meta (here in NYC I am a pinball obsessive and am trying to map out the city's machines, and there are so many I would be fascinated to hear the money metrics of it) and design (I hate Total Annihilation!! But the one I played on was very unforgiving, so maybe I am a baby and the design is actually great. Still better then the worst pinball machine I saw get regular rotation, a strange Supreme brand one. How do you compare modern machines to the classic pinball heyday ones of the 80s and 90s? Has the market gotten more expansive or is it now favoring the collector?)

Holy crap, these are REALLY good questions I wasn't even considering. I think this will actually become closer to how I structure the next post honestly. Thanks for these, these will definitely be answered as their own subjects!

Also everything should come back to Kaiji, IMO 😌