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  A New Life for Arcades?
by Kevin Williams
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July 23, 2009 Article Start Page 1 of 5 Next
 

[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.

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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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Comments

Andre Thomas
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Pretty nice article and I applaud it very much. But anyhow as for the piece on adaption, I do agree that some games can adapt to an arcade environment like Tourst Trophy, Gran Turismo or even God Of War, but in reality not every game can adapt well.

Overall personally I would like to see a strong resurgence of the arcade scene because not only can developers benefit, but gamers also. also.

James Hofmann
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I'm a huge fan of arcades and still go to them regularly.

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.

Bob dillan
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Arcade games by their very nature usually forced game developers to make them fun because if they weren't they wouldn't be seeing the coins inserted. I remember first playing Ninja Turtles and Killer instinct in the arcades, I think consoleification of gaming has made developers a bit loopy in the head.

Andre Thomas
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@Bob dillan, I agree with every word you say, but overall when you compare arcades to console and PC gaming its obvious to see why arcade gaming is a much more superior form of gaming.

First of all the communities built around arcades cannot, and I stress cannot be replicted with online gaming via a console or PC, Secondly the games are much better in terms of gameplay and quality, and finally arcades are more economically friendler to developers regardless of size and the profit potential is there.

Overall though I would like to see a new life for the arcades here in NA, but for that to happen its going to take developer support and developers also avoiding the mistakes that led to the arcade demise e.g. copycat games and the same type of games over and over.

Robert Allen
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Cost to me still seems to be the limiting factor. But then I'm in my late 40's. Maybe it's a generation gap thing.

kevin williams
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We saw a lot of over 40's at the INSERT COIN arcade event in the UK recently.

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

Motion Simulations
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The virtual reality industry also still has its strong foundation and very often makes its presence felt during either personal or corporate events of one form or another. People invest in the technology to provide a kind of 'arcade' experience for the given event (to their delight, to be sure) and, indeed, the market for this kind of thing continues to remain, even in light of breathtaking capabilities of home consoles. Perhaps it's the simple fact that we're still very much human and like more concrete interactions with one another instead of mere voices through a headset.

For more information on the virtual reality game systems, you can check them out here:
http://www.amusitronix.com/VR_Home_Systems.php.


dario silva
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Kevin, thanks for the information on current arcade trends, along with sales figures for 1982 compared to 2004. I've done a lot of research on arcades over the past 3 weeks, and havent been able to find this information anywhere else. The original Pong machines i think sold around 8000, at $1300 a pop. Come Space Invaders, the USA bought 100 000 of those machines, i dont know how much they cost though.

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.


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