Barcades are crushing it thats where the money's at

Hell yeah barcades are where it's at. They have a few nice ones in your area Delta.

Agreed

Without a liquor license or food it's highly unlikely.

Our league arcade does well, but it's attached to a popular used video game store. The successful arcades these days seem to have/need an additional hook to bring in the traffic.

Sounds like a winning combination.

It's unlikely that you'll make enough to pay off 15 new machines at LE prices and pay yourself much to start out with. The sort-of saving grace there is that right now at least, pinball machines don't tend to depreciate much if they're well maintained. As others have noted, opening a bar or restaurant with pinball as a draw seems to be working out pretty well for several individuals and franchises, building a business around just the arcade not as much. Expect more headaches with maintenance than you are planning or budgeting for. Do you have experience with keeping pinball machines working? Is there anyone that can service them for you in your area if not?

What is your competition? 20 machines for a single location is quite a few, and you also don't want to set yourself up to have to pay off a Walking Dead for the next three years while newer and more relevant titles are coming out. You might want to plan on starting with a few less than that and adding new games or rotating games.

If my wife was reading this she would start researching the possibility just to get the pins out of the house.I'm guessing you would be purchasing machines to start up so you might not feel the emotional distress of having strangers playing and leaning all over them. I don't know if I could handle running an arcade with my own collection. I would be hovering over the customers offering up hand wipes all day.

I would think for sure sell booze and food to make it work. The pins may bring in enough money to maintain themselves. Do some demographics studies too--Most of the successful Barcades are in larger cities with "hip" crowds. Also location, location, location. Good luck! Hope it works out!

Mike

The games themselves won't make you any money.

But hopefully they can be enough of a draw for you to sell lots of booze.

It seems like you'd be better off finding a partner venue that would let you operate pinballs in it. Let them operate the biz, you take care of the pins without the headaches of everything else.

I'm thinking 20 machines is a bit much to start out with unless you already own them. Mix in some video games because not everyone is into pinball. Location is important. Maybe near a university or high traffic area.

Go with pros. Cheaper and easier to maintain. Unbeknownst to a lot of hater disbelief, stern is doing the right thing with 2 (or 3) different models. There's a reason their pro machines are so popular outside of pinside. Less maintenance + good theme = better or more stable profits.

Not seeing a reason to buy all new machines. They would be more reliable, but my recent trips to barcades show that age doesn't mean much.

UP Down in KC for example.
WCS
SM
FGY
SP
AFM
TAF
ST Premium
KISS Premium
TWD Pro
Iron Man VE

There was one woman up with me playing some of the newer sterns. I saw more action on SP and AFM. TAF's GI was out which put players off, but everything else was in tip top shape.

This. Work with a bar or venue that has some space. Explain to them the expense of operating pinballs and try and negotiate a smaller cut with the explanation that it will drive more people to eat and drink there. Also - I would start a league. That will give you more consistent income.

Learn all you can, so you have the best chance at success.

If you can get it. Cities don't just hand them out, and check out requirements and costs. No guarantee of success either, bars go broke too. You are talking a lot of space too. Two handicap approved rest rooms, and the bar itself. Lots of rent sucked up right there.

Depends on the place and people. 20 games may take in twenty games worth of money, or twenty games may take in five games worth of money. Until you do it, no way of telling how much money is in there.

Check out what you'll all need for licenses, insurance, zoning ordinances, etc.

If you go forward with it, best wishes for success.

LTG : )™

The conventional wisdom seems to be that alcohol is a critical ingredient to opening a pincade these days. What about Modern Pinball NYC or Asheville Pinball Museum? Are these just outliers based on location?

Im in Phx 2-3 times a year, the only decent place out there is castles and coasters and all of their machines are in shit condition. If you guys were to have a barcade out there I would be all over it. Im sure the locals would flock since there is nothing like it around you.

I think you maybe looking at things wrong. The machines most people route don't ever pay themselves off fully. They make money while they can and then are sold for as much as you can to make the rest (or ideally the entire ) investment price.

It needs to be a good bar with a side of pinball - if the emphasis is pinball you are going to lose money

I thought about this as well for a while. After doing a lot of research I decided not to turn my hobby into work. I was thinking a small barcade featuring local craft beer. The main thing that stopped me is you have to serve food to serve alcohol. This turns it into a restaurant of sorts which I have no desire to run. You also have to consider the hours of operation that are needed for that type of an establishment. You end up working mid afternoon until 1am or later and unless this is what both you and your wife do for a living you will end up not seeing each other much if she works a normal schedule. In the end I couldn't justify the risk and time away from my family. To make good money at it you pretty much have to go big and have a great location. This requires a huge investment up front. You can go small and make it more of a hobby but just remember hobbies do not make money. They take time and eat money.

Good luck, hopefully you're opening a bar because there is a market demand for a bar and pinball at the location you're looking at and not because you'd personally like to see a barcade in your town.

Make sure you understand the demographics. There are two barcades in Raleigh, only one has partrons overflowing out the door onto the patio, and it's the one with half crap condition pins. The slower one is the one with nice pins, runs tournaments, etc. I know the CoinBox guys keep a big lineup of modern, clean, working games and most of their money comes from casual players in the bowling alley anyway, not people who visited to play pinball.

If you want it to make money, concentrate on the bar portion with the pinball as a loss leader. Also budget for a tech to come in every day to fix stuff and clean games. Dirty games earn less.

Another thing to consider is to make paying to play as easy as possible - that means dollar bill validators, perhaps electronic mechs that take both quarters and tokens, and even PayRange:

https://www.payrange.com/

You don't need 15 new pins to make money. I have proof of that. I'd say to go for 10 classic arcades set on free play and 4 solid 2K-5K pins set on at least 50 cents, and you will be set. If you can't work on the pins, you will need to befriend someone local to help you work on them for less than the "going rate". I charge around $50/hr. to local friends (which is considered VERY reasonable).

Also, creating an 80's "mood and atmosphere" is also LOT more important than you think, to try and maximize customers visiting more than once.

The problem with your idea:

You will not make enough $ to support your family with this alone. In other words, it is a labor of love, not of profit. If you're ok with that, I'd say to go for it.

The sad truth is, when you start looking at the costs involved to launch this, you start asking yourself the cold hard truth about whether this is a good use for your money, or can that same money earn more another way, also without becoming the worst job in the world.

I'm a fan of Bar Rescue, and more often than not the people opening the bars did so because "they like bars". Jon Taffer will regularly tell them something like : "If you want to hang out in your own bar, build the best basement bar in the world, have your friends over and don't worry about ROI, rent, utilities, staff, and everything else that becomes a nightmare".

I took that advice to heart and built my own basement arcade, everything to commercial spec, and don't lose any sleep over it .

I do think being an operator is a decent middle ground, and I'd take my time finding the best, most cooperative venue that sees the pinball as an attraction.

You also need to think about the accounting side of things and the depreciation that would be involved with the machines, especially if they are going to be sold after a while. There is too much to even get into when it comes to accounting. The good thing is that the IRS has extended Section 179 depreciation and Bonus depreciation, although bonus depreciation is being phased out in the future. If you have any questions on accounting, feel free to PM me.

Definitely cannot forget about the accounting and tax implications. Get a CPA for sure.

20 machines is probably much more than you need to start with, especially if you have little/no competition. 10 is a pretty good number...it's more than "just a few", gives you a good variety, and is enough to run a weekly league. I have 10 at my location...and we play half of them one week for league, and half the next week. I thought people would get bored of this, so I would hold league nights in other locations to mix it up, but would always get lower attendance when I did that. So, in my experience, 10 is enough for a league.

If the competition is limited, I'm not sure than 20 pins that much more of a draw than 10 (coming from my perspective as a player).

If your machines are so busy that people are waiting a lot, then you can expand with more.

But, I agree with everyone else...the money is in the alcohol. Even just a 5 seat bar with limited selection would at least double your revenue. Many of my regulars would not be regulars if they couldn't buy alcohol there as well.

Here in Fargo that Fargo Pinball suckered some people here & the Fargo area to give them $$$ for a kickstarter so why couldn't you?

With a liquor license, if you can get one comes a lot of other requirements. You need a local, and state license, and you need special insurance to serve liquor. Many towns limit the number of licenses and they get hard to come by too. Also many places if you have liqour you must also serve food. Check into the laws and local ordinances to see what you might be up against before going too crazy about it.

To start a league is a good idea...consistent income as fattdirk said, and also gives you "assumably" a crowd that will appreciate and take care of your games, as opposed to the general populous that will just beat on them. Pinball popularity goes up and down from time to time, as do prices of pins, so I would definitely start with less than 20 games. See how it goes first before making a larger investment, especially with several A-list or higher end titles. You could also throw in some Williams System 9 or 11 games that people love to play, as opposed to a straight line of DMD's. That would lessen some of the cost, and they are easier to repair and maintain.

As everyone else is throwing out there, alcohol is a must for the adult crowd, but you'd have to decide if you plan on entertaining adolescents and teens as well. In my area, there are younger kids getting into the hobby that I have sold games to, but that would raise other legal issues with serving alcohol if you plan on being a family-friendly establishment. In PA, kids are not allowed to sit at a bar (rightfully so), and there is also a requirement that doesn't even allow them to be within a certain proximity of the bar, or where alcohol is being served unless at a table by wait staff. You'd have to check with your local Liquor Control Board to see what those requirements or restrictions might be. If the regulations are less stringent out there, kids that are interested in playing can keep pumping money into your machines, while their parents get hopped up. Either way if you're planning on selling booze, make sure you have at least a $1 million / $3 million general liability policy on the business.

You'd still have to meet all the requirements involved or the license won't transfer. If it's transferable.

All kinds of things. You might have to be a registered voter X number of years. Lived in the same city as the license X number of years. Clean records. Etc. Etc.

LTG : )™

One of the big reasons you start a business is because you're satisfying a "need" or "pain" for your customers. In this case you're thinking the pain is a lack of pinball in your area. But you gotta test and research that to determine whether or not there are enough customers to make that need profitable to address.

And odds are there probably aren't.

The Brewcades approached that pain from a different angle; a bar where you can drink AND be entertained instead of a place to drink before or after you've gone someplace to be entertained. Same with, say, my local miniature golf course, which has about ten Sterns and a WOZ as part of a larger arcade. So pins can work in supporting an establishment, but unless you're in a major city such as Modern Pinball or a well-defined pinball demographic (is there such a place?) you need to carefully evaluate your business opportunity before you start sinking money into it.

If you're really serious about starting this business you might like this free Udacity course in building a startup: https://www.udacity.com/course/how-to-build-a-startup--ep245

For typical locations yes, for successful barcades this statement is not correct

If you can't bear the thought of someone playing your games, then opening a new location may not be the best option for you.

If you do this, then events are big. Rent it out for parties, host tournaments, leagues, anything you can to get groups of people in there.

Watch the PAPA TV Road Show Episode 2, they interview the guy who runs Lyon's Classic Pinball in Colorado, and he talks a bit about what it was like to open it.

There is an arcade in my town run by a group of guys. You can pay at the door or get a membership. No booze but byob. There are pins and arcades, mostly older, all on freeplay. They have been operating for a while so it must be working. Keeping up with pin maintenance when running a bunch seems to be a handful even for a group of guys.

I don't know what it's like where you live, but here in Boston opening a bar (because if you expect to make your profits on the liquor and food and not the games, the games are basically a non factor. you are de facto running a bar) costs you at least a million dollars. Liquor licenses, inspections up the wazoo, fitting a space, hiring staff, buying insurance... and even then a lot of bars fail. Obviously 'Bar Rescue' is mostly fictional but its a good indication that running a restaurant/bar is a HARD business to make work.

Even if someone gifted you 20 Stern games you might still have a hard time making an arcade work. Electricity costs (especially in AZ where I'd expect your A/C bill to be ridiculous), employee salaries, maintenance on the pins, insurance, rent, licensing, etc... I mean there's a reason the arcade scene died out and then morphed into something else. the traditional economic models just don't support it.

Also, have you worked in the hospitality/bar business before? That's a big part of it. If you are hinging the success of the business on the part of the business you know the least about (bar) then I would question that.

I think it's inflation. Look at how much everything else has gone up in cost since the 80's/90's. What would the relative cost of game then vs now be anyway? $2/$3 a game?

Not as much as you would like to think.
.25 in 1985 is .55 today.
http://data.bls.gov/cgi-bin/cpicalc.pl?cost1=.25&year1=1985&year2=2015

Yup... If you haven't worked with the public before, I'd suggest get a part time job bartending, delivering pizza etc. to see if you're cut out for dealing with the public... Not everybody is. And the Wife needs to be on board 110%, so that means her too. You cannot trust employees, and will need to be there constantly until you can (if ever).

If you get into it and one of you decides they want out, you're gonna be in a world of hurt.

Believe me, been there!!

That basement bar/arcade is a great option!

This.

Also a popular venue needs a 'vibe'. Not sure what the flavour is around your area but 'industrial' looking bars do well around here. I think for this sort of venue you should clarify your 'target market' which may need to be altered and adjusted to as you go. Interesting, relevant stuff on the walls helps.
Good luck if you go ahead.

Maybe see if you can set up a nice bank of pins in a bowling alley, they compliment each other and you have hardly any overheads. If they get lot of play then you know a demand is there to start an arcade.

Can you claim the purchase of the machines as a business expense?

Sounds good to me! Boutique beers add to a great atmosphere. Your experience in this area, your location and business model all sound real good. If failure means you don't lose out badly then I'd say it's worth a crack.

Im 31 yrs old & I started my coin-op business from scratch. I operate in FECs & Bars & recently started a second business which operates a stand alone arcade with 10 pins in my hometown. In the 12 years Ive done this Ive never paid myself till recently. Ive had to work a full time job to pay my personal bills. The businesses are self sufficient when it comes to paying their bills, but please think long & hard before getting into coin-op. The bar market is terrible. Barcades in the correct city do good, but there bars 1st & arcades second. I am very fortunate my wife has a great job & I only work my businesses now, but man have I struggled at times. You have to have a burning desire & truly love pinball or video amusement or whatever type of coin-op you do. Remember you can be Disney or you can be Joe's Arcade and this equipment cost you both the same. You dont get a discount cause your small. Ive only recently had employees as well for my stand alone arcade venture & right now paying there wages, & paying the rent & paying utilities & paying machine bills I cut myself a check a couple times a month, but its $100 at a time. Love this venture 100% or you will burn out fast. Remember you buy a GOT or TWD premium its $7000. True pinball players who play in leagues & tournaments will pay $1.00 per play, but your average customer who outweighs your league player 100/1 will balk at that $1.00 per play, they will go on facebook & comment about it too. You gotta be careful & find a true balance of equipment you can price accordingly for your everyday customer.