[In an overview of the current arcade game business, industry consultant Kevin Williams examines the state of the market, probing why, although the Western arcade biz is much changed from its '80s heyday,  there's still room for new products.]

In a feature of this kind we would normally begin with a short history lesson on the "arcade" industry -- looking at past glories of the Golden Age and how nowadays retro arcade classics have managed to account for a high percentage of consumer releases on all platforms.

But the popularity of the classic arcade industry is so great that the sector is covered authoritatively in numerous fan-based websites and portals. The communities, such as Arcade Heroes, fans of the Multi Arcade Machine Emulator (MAME), and the fighting and driving game genres are legendary and constantly growing.

Though the arcade is a retro title goldmine, for many in the consumer game scene it has been easy to dismiss arcade gaming as nostalgia, but no longer a viable or functioning industry. That view has recently been contradicted; we are in the midst of a groundswell of new developments in this so-called "dead" market.

The reality is that while consumer gaming has evolved into the multi-billion dollar industry we know and love, the arcade industry has also changed -- having evolved itself into a sector that is still of interest to consumer game publishers and player attention alike.

The Shape of Today's Market

What many still call the "arcade" business has not existed in any serious size for 20-odd years -- the industry that this feature is covering is that of the video amusement and public-space sector (also known as the Digital Out-of-Home interactive entertainment industry).

Where once wooden black box arcade cabinets were crammed into retail units and called an "arcade", the modern industry places the latest dedicated amusement pieces in a multitude of sites ranging from retail, bowling centers, family entertainment venues, cinema chains, hotels, theme parks and airports -- and many sites in-between. Rather than supplying the stand-alone presence, public-space gaming is now largely a compliment to a facility's primary activities.

The general North American market, where these products are placed, also consists of Family Entertainment Centers (FEC), ranging in size from 15,000 to 200,000 square feet, mixing entertainment such as bowling, lasertag, mini-golf, go-karting, redemption and amusement under one roof, with 200 to 400 machines. An aspect of this includes facilities that focus on a centralized experience such bowling alleys, light-gun arenas, and video game rooms.

Next to this there are cinemas, with movie theatres including FEC elements in separate retail units or scatted throughout the venue -- such as the Cineplex chain and its 130 multi-screen venues, which include games as well. Some cinemas are broadening their scope to include mass audience interactive experiences unique to the movie theater, such as the TimePlay Entertainment's CineLynx platform -- offering 100 wireless consoles to take part in mass-audience game experiences.

Game rooms encompass standalone amusement venues, but also are being combined with existing venues such as hotel resorts and other visitor attractions. These are closest to the traditional "arcade" style game room -- but have now shrunk from 10,000 venues in the arcade heyday to roughly 3,000 sites across the United States.

The more familiar face of amusement are Children Entertainment Centers (CEC), exemplified by the Chuck E. Cheese chain, originated by Nolan Bushnell in 1977. Since then, it has grown into a 350 center operation with annual revenue in the region of $1.6 million per Center. Another leader in the field is Discovery Zone, with over 300 locations. In the U.S. and Mexico, there is also Peter Piper Pizza, which ranges in size from 5,000 to 10,000 square feet, with over 140 sites.

These restaurants are a mixture of fast food and gaming -- known as "EaterTainment" -- with a considerable emphasis on video and redemption (prize) gaming. EaterTainment also touches the hospitality industry, including such venues as sports bars and taverns that deploy digital jukeboxes, casual gaming decks, and gaming kiosks -- blending the drinking and dining experience with a gaming component.

Another venue type is Urban Location Based Entertainment Centers (LBE), including what is known as Adult Entertainment Centers (AEC).

This is best illustrated by Dave & Busters, which has over 46 venues, each one mixing restaurant and bar enclosures with redemption midway, amusement gaming, and specialized attractions. These venues range from 30,000 to 50,000 square feet and typically have roughly 450 machines.

A re-emerging AEC chain is the GameWorks operation (owned by amusement giant Sega), with over 17 venues. These mix a bar and club atmosphere with the latest video amusement systems.

The sites, developed as entertainment anchors, are at home in a mall as well as being deployed as standalone venues. This parallels the evolution of the mall into a Retail Entertainment Center (REC), which offers shopping venues with high foot-traffic to entertain a family mix at the site.

New trends include re-application of the game room in new locations such as truck stops and airports, while edutainment -- using interactive entertainment to supply educational experience, including exercise gaming -- is linked to a drive against childhood obesity through physical game experiences. These are all opening new opportunities for developers.