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[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.
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Japan has retained a scale advantage in the traditional arcade market, especially post-1983 - most of the top games were and still are made by Japanese manufacturers for a Japanese audience, while the rest of the world retreated to the home computer market after the crash and only gradually branched out again. One look at lists of arcade games from the 80s and you'll see that the only American companies to make a mark are Atari and Midway. (I wouldn't count Sega's arcade work as American-made, despite their early history.) And as the article mentions, the Japanese manufacturers regularly snub the international marketplace, presumably because the sales estimates don't work out, which puts owners in a difficult position to retain their most devoted fans. Getting even somewhat close to the same experience means expensive imports, and those games would usually have zero translation or localization.
As well, targeting, cultivating, and retaining a specific audience was not within the scope of most past arcade owners - the business model could be summed up as "buy some games and fling open the doors." This is why the U.S. knows mostly arcades of the lowest common denominator, where the games are crammed together inappropriately and overpriced, most of them don't work, the staff consists of underpaid teenagers that sneer at complaints, and the crowd is a mix of screaming children, drunks, and gang members. (And yet despite all this, they still hold a certain appeal for the hardcore.)
The newer approaches serve the markets better by building ground-up service towards well-defined segments. And improvements within game development itself have made it easier to supply each segment with appropriate games. It's a very promising thing, and my hope is that games will only become more pervasive in the future as we find more ways to fit them into daily life.
I don't think it is generational - more a factor of finding the right public-space environment to play.
Would you considered: http://www.uwink.com/restaurants
For more information on the virtual reality game systems, you can check them out here:
http://www.amusitronix.com/VR_Home_Systems.php.
You mention the 'legal' use of consoles in arcade spaces, mentioning Quasimoto and Game Gate. Internet cafes use publicly sold games to host public gaming. Consoles should have been no different ten years ago. Quasimoto is missing the point, putting a new technology in an old box, and Game Gate (from what you said) focuses on game tournaments (competitive play). This doesnt suit all games, think of God of War for example. Sony's dismal failure with PS2 online support shows us a big disregard for the internet cafe gaming culture, and the arcade culture. In South Korea people spend 10 hours at a time at internet cafes playing FPS, RTS and MMORPGs. Sometimes i saw kids playing arcadish games, but nothing compared to what was around for us kids playing arcade games in '91. If Sony used the foundation of the arcades and internet cafes, they could have pioneered what we are now seeing in console gaming (online play, leaderboards, in game voice chat). Gamers would have also been pulled out of their homes, and gaming events would finally get into clubs (like in the movie Hackers). The legality of this all would not be a problem, because arcades would be run by simple membership. Thats fair use under copyright law.
Too bad i guess.