gaming arcade business plan

How to Write an Arcade Business Plan + Free Sample Plan PDF

Elon Glucklich

7 min. read

Updated April 3, 2024

Free Download: Sample Entertainment Business Plan Templates

Once headed for extinction, the arcade has made a comeback. 

There are now nearly 7,000 arcades and entertainment centers across the U.S., and the sheer range of gaming options means there are plenty of opportunities for entrepreneurs looking to carve out a niche in their community.

But to build a successful business around people’s love of gaming, you need to make sure that:

• There’s a big enough market for your arcade to be financially viable.
• You’re offering something that competitors aren’t.
• You have a plan to staff the arcade and keep machines operational.
• If you’re operating an arcade bar, you need to ensure minors aren’t getting access to alcohol.

You can account for all of these concerns and improve your chances of starting a profitable arcade by writing a business plan. Plus, if you’re looking for a bank loan or investment to cover major costs like new arcade machines, they’ll need to see your plan before they’ll consider funding you.

Those are just a few of the concerns an arcade business owner might deal with. And it’s why writing a business plan will keep you focused on your market opportunity and run your operation smoothly. 

• What should you include in an arcade business plan?

Here are a few sections we recommend including in an arcade business plan:

Executive summary

• Products & services

Market analysis

Operational plan, financial plan.

There’s a traditional format that you can follow when writing your business plan .  But don’t feel like you have to follow that structure if you aren’t looking for funding. 

At its heart, a business plan is about creating a growth strategy for your arcade, so focus on the sections most relevant to your situation.

The executive summary introduces the reader to your arcade business. It’s typically written last, because it summarizes your whole plan. But it needs to be engaging.

Start by outlining your arcade’s unique concept and mission. Do you focus on:

• Classic arcade games
• Cutting-edge gaming systems (i.e. virtual reality)
• Competitive play (tournaments)

Next, highlight what sets you apart . Maybe you have a massive game selection, exciting prizes to win, or an appealing food and beverage concept. Tie these features to the desires of your target market and the role your business will play in the community.

Briefly touch on your qualifications, financial outlook and long-term goals as well. Do you have experience in business, entertainment, or the gaming industry? If you’re seeking funding, how much do you need, and how will you use it?

Products and services

The products and services section details the experiences you offer customers, and revenue streams you generate. Start with your core service.

Arcade Games

List the types of games you offer, such as:

• Classic cabinets
• Pinball machines
• Modern gaming consoles
• Cutting-edge gaming experience like VR
• Interactive games

Some arcades specialize in a type of gaming experience, like retro or sports games. If you’re focusing on a specific genre or era, explain in your business plan why choosing that segment over others gives you an advantage.

Then think beyond the arcade games themselves. Additional revenue streams may include:

• Food and drinks
• Events and tournaments
• Merchandise
• Party packages

If you’re already operational, mention any services that have proven successful.

To build a successful arcade with a steady customer base, you must deeply understand your target customers and the arcade industry.

A good place to start in your market analysis is to identify the characteristics of your ideal player:

These include demographic factors, like:

• Income level

Are you catering to teens, young adults, or families? Do you expect your customers to be mostly from the area around your arcade, or can you draw people from farther away? Based on average incomes in your area, do you expect cheaper, coin-operated games to be your most popular attraction? Or can you get customers to pay more for premium games, meals, and drinks?

You should also consider the psychographic characteristics of your customers. These are about your customers’ motivations. Are they seeking:

• Stress relief
• Social outings
• Serious competition

The answer to these questions can help determine how to position your arcade to potential customers, as well as the types of arcade games to purchase.

Competitive analysis

Understanding the competitive landscape is an extension of your market research. But due to the complexity of the arcade gaming competition, it’s worth separating into its own section.

Start by listing your rivals:

• Direct Competitors: Other arcades, especially those with a similar concept or location.
• Indirect Competitors: Family entertainment centers, bowling alleys, home gaming systems – anywhere people spend leisure time and money.

Analyze their strengths and weaknesses. Consider:

• Game Selection: Do they offer a similar mix, or specialize in specific genres?
• Atmosphere: Is it modern, family-friendly, or geared toward serious gamers?
• Pricing & Promotions: How do their prices compare to yours? Do they run specials or loyalty programs?
• Customer Experience: Look at online reviews – what do people praise or criticize?

The key to your competitive analysis is determining what will make people choose your arcade over other options. It could be that you have a larger selection of games, or a more approachable atmosphere. Clearly spell out your competitive advantage in your business plan.  

Your operational plan maps out the day-to-day work that keeps your arcade running smoothly. Here’s what to cover:

Describe your space

• Square footage
• Special features (party room, kitchen, etc.)

If you haven’t secured a location, outline your ideal requirements.

• Arcade machines
• Coin and token machines
• Kitchen and bar equipment
• Food and drink supplies
• Cleaning supplies

Archase games require periodic upkeep, so be sure to outline your plan for regular maintenance and how you’ll handle unexpected breakdowns. Also, detail where you will source games, parts, prices, food and drinks.

The complexity of your operational plan depends on your arcade’s size and staffing needs. A simple arcade might have a shorter section, while a large entertainment complex will need a more detailed plan.

Your arcade financial plan is where you demonstrate that you can turn your vision into a sustainable business that operates for years to come.

Startup Costs : If you’re seeking funding to start an arcade, detail your costs to launching, like buying arcade machines, building renovations, and initial inventory needs. Be sure to demonstrate exactly how those funds will help you succeed.

Sales forecast : Project your revenue from game plays, prizes, food and drinks, events, and any other income sources. Be realistic, especially in the early months.

Expense Budget : Think carefully about all of your costs, then list them out. Typical expenses include:

• Rent and utilities
• Game purchases/leases
• Maintenance & repairs
• Supplies (prizes, food, etc.)
• Insurance, marketing, licensing, and fees

Profit & Loss (P&L) : This combines your revenue streams and expenses, demonstrating whether your projections show a profit.

Cash flow statement : Regardless of how successful you think your arcade will be over time, you always need to have enough cash on hand to pay bills and avoid running into shortages. 

Balance Sheet : An overview of your arcade’s financial health, listing assets (like your games), liabilities (loans), and overall equity.

Important Notes

Assumptions: Be clear about any predictions you’re making (number of customers, growth rate, etc.). If you’re writing your business plan in hopes of getting a bank loan, they’ll want to see that you’ve thought through your projections.

Industry Research: Try to find sample financials from other arcades to make sure you’re not missing any key expenses. At the very least, research typical arcade expenses online.

• Download your free entertainment sample business plan

You can download any of our entertainment business plan samples for free right now to get inspiration for your own plan. Or, browse the Bplans library of over 550 free sample business plans to see what plans in other industries look like.

With competition from other arcades, large entertainment centers and home gaming systems, identifying your niche as an arcade destination is crucial for your success.

Writing a business plan keeps you disciplined in your entrepreneurial journey by ensuring you focus on gaming experiences with a high return on investment. And remember, a bank or investor won’t fund you without one.

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Elon is a marketing specialist at Palo Alto Software, working with consultants, accountants, business instructors and others who use LivePlan at scale. He has a bachelor's degree in journalism and an MBA from the University of Oregon.

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Arcade Business Plan Template

Written by Dave Lavinsky

Arcade Business Plan

You’ve come to the right place to create your Arcade business plan.

We have helped over 1,000 entrepreneurs and business owners create business plans and many have used them to start or grow their Arcades.

Below is a template to help you create each section of your Arcade business plan.

Executive Summary

Business overview.

Hal’s Arcade is a new ultimate arcade gaming experience located in downtown Seattle, Washington. We offer every game you can imagine from classic arcade games to one of a kind VR experiences. We aim to be the #1 arcade in the Seattle area and guarantee that every customer who visits us will find a game they will enjoy.

Hal’s Arcade is founded and run by Hal Jenkins. Hal has loved arcade games his whole life and has dreamed of opening up a local arcade in his local neighborhood. After years of planning and saving money, he finally is ready to lease an arcade space and start his dream business.

Product Offering

Hal’s Arcade is the best place in town for the ultimate arcade experience. We provide hundreds of games and activities so everyone who visits us can find something to enjoy. We expect that our most popular games will be classic arcade games, VR games, multiplayer sports games, and first person shooters. We also serve food and drink and have prizes and merchandise that can either be purchased with tickets won from games, cash/credit cards, or arcade cards. Groups can reserve private rooms for private parties and celebrations.

Customer Focus

Hal’s Arcade will serve the residents of the Seattle, Washington area. The city is full of families, groups, and individuals who love to connect with their inner child through arcade games. We are open to anyone who wants to spend a few hours playing in our arcade.

Management Team

Hal’s Arcade is founded and run by Hal Jenkins. Hal grew up playing arcade games with his father and brothers and has fond memories in arcades and gaming centers. He has dreamed his whole life of running his own arcade that can be the background to similar memories for other residents in the Seattle area. His goal is to build and run the most popular arcade in the Seattle area.

Success Factors

Hal’s Arcade will be able to achieve success by offering the following competitive advantages:

• An arcade card that makes the arcade experience more convenient and enjoyable.
• Modern and comfortable environment with a family-friendly atmosphere.
• Moderate pricing that everyone can afford.
• Friendly and helpful staff.

Financial Highlights

Hal’s Arcade is seeking $425,000 in debt financing to launch its arcade. The funding will be dedicated towards securing the arcade space and purchasing equipment, opening inventory, and working capital. The breakout of the funding is below:

• Arcade space build-out: $100,000
• Opening inventory, supplies, equipment, decorations: $200,000
• Three months of overhead expenses (payroll, rent, utilities): $50,000
• Marketing costs: $50,000
• Working capital: $25,000

The following graph below outlines the pro forma financial projections for Hal’s Arcade.

Company Overview

Who is hal’s arcade.

  Customers who visit our arcade have the option to purchase an arcade card. The card can be used to purchase anything in the building, including games, prizes, merchandise, and food. It can also be used to store tickets that are won from our games.

Hal’s Arcade is founded and run by Hal Jenkins. Hal has loved arcade games his whole life and has dreamed of opening up a local arcade in his local neighborhood. He loves seeing the joy that arcade games bring to others and is eager to start a business that will bring that joy to his customers. After considerable planning, Hal is now ready to open up his arcade.

Hal’s Arcade History

Before starting his business, Hal conducted a market analysis and consumer survey to see how popular his arcade would be. Luckily, the results from both show that many local residents would be excited to frequent the new arcade. After Hal finished his analysis and survey, he incorporated his new arcade as an S-Corporation on May 1st, 2023. Since incorporation, Hal’s Arcade has achieved the following milestones:

• Developed the arcade’s branding image, social media, and website
• Found a location and signed a Letter of Intent to lease it
• Finalized food and drink menus
• Found supplies who can source prizes and merchandise
• Began recruiting key employees

Hal’s Arcade Services

Hal’s Arcade is the best place in town for the ultimate arcade experience. We provide hundreds of games and activities so everyone can find something to enjoy. Some of the types of games we provide include:

• Classic arcade games
• Multiplayer sports and racing games
• First person shooters

Customers can also purchase food and drinks while they play. We offer a full menu of options, including sandwiches, burgers, and pizza. Large groups can reserve private rooms for parties and special events.

Customers have the option to purchase an arcade card when they come to our arcade. Everything in the building can be bought with this card, including food and prizes. Furthermore, tickets won from our games will be stored on the card. This makes the arcade experience more convenient as every transaction can be stored on this card. Customers don’t have to worry about the hassle of finding the right credit card or carrying hundreds of tickets as they walk around the arcade.

Industry Analysis

The Arcade industry in the United States is expected to increase in revenue over the next five years. Consumers are expected to continue spending money on entertainment experiences and for food and drink at restaurants and similar establishments. Growth during most of the period will be supported by increased consumer spending and per capita expenditure on food, drink, and gaming experiences. Growth is also influenced by consumers’ excitement to go out and enjoy themselves after being cooped indoors during the pandemic years.

Though the industry declined during the pandemic years, the arcade industry is expected to recover. According to Data Bridge Market Research, the industry is expecting to grow at a CAGR of 5.10% from now until 2029. This growth should be enough to help the industry recover from the pandemic and sustain new growth and profit. Therefore, this is a great time to open up a new arcade.

Customer Analysis

Demographic profile of target market.

Hal’s Arcade will serve all the residents of the Seattle, Washington area who are craving the experience of a fun, local arcade. Everyone is welcome but we expect our target demographic to be mostly young adults, families, and large groups.

	Total	Percent
Total population	1,680,988	100%
Male	838,675	49.9%
Female	842,313	50.1%
20 to 24 years	114,872	6.8%
25 to 34 years	273,588	16.3%
35 to 44 years	235,946	14.0%
45 to 54 years	210,256	12.5%
55 to 59 years	105,057	6.2%
60 to 64 years	87,484	5.2%
65 to 74 years	116,878	7.0%
75 to 84 years	52,524	3.1%

Customer Segmentation

Hal’s Arcade will primarily target the following customer profiles:

• Young adults
• Large groups/special events

Competitive Analysis

Direct and indirect competitors.

Hal’s Arcade will face competition from other companies with similar business profiles. A description of each competitor company is below.

Terry’s Arcade

Terry’s Arcade has been the go-to family arcade experience for decades. Terry’s prides itself on its selection of retro and vintage arcade games that have been around for several decades. The arcade has hundreds of options to choose from and even provides skee ball, air hockey, and other activities. They also sell snacks, drinks, and merchandise for customers to enjoy while playing in the arcade.

Chuck’s Arcade Palooza

Chuck’s Arcade Palooza is a small arcade center that has gained a lot of popularity. Though they are not a large facility, they still cram their arcade with some of the most popular arcade games of today and yesterday. Chuck’s has received consistent raving reviews for years, and is a hotspot for entertainment for young adults throughout the Seattle area.

Seattle’s Center of Fun

Seattle’s Center of Fun has been a popular spot for local kids and family entertainment for decades. Providing numerous games and activities, Seattle’s Center of Fun is a great place to take your kids for a party, event, or night out. The center is far more than just an arcade. In addition to providing hundreds of arcade games, Seattle’s Center of Fun also offers a full restaurant, a bowling alley, and private rooms for large parties and special events. The center has everything one could want in a fun family night out.

Competitive Advantage

Hal’s Arcade will be able to offer the following advantages over the competition:

• Convenient Location : We will be located in downtown Seattle in a convenient location that all residents can easily access.
• Management : Our management has considerable experience in the industry and has a passion to provide the best customer service possible.
• Affordability : Our pricing will be moderate so all of our customers can afford to enjoy our games and food.

Marketing Plan

Brand & value proposition.

Hal’s Arcade will offer the unique value proposition to its clientele:

• High-quality food and drinks
• Largest selection of arcade games in town
• Premier arcade experience
• High-quality merchandise and prizes
• Family-friendly atmosphere
• Excellent customer service

Promotions Strategy

The promotions strategy for Hal’s Arcade is as follows:

Hal’s Arcade’s location is a promotion strategy in itself. It will be located in a popular and convenient location in downtown Seattle. The area is full of other family-friendly businesses as well as nightclubs and other popular locations.

Social Media Marketing

Hal’s Arcade will use social media to cater to the young adults and the social media obsessed portion of Seattle. Hal will create TikTok, Instagram, Twitter, and Facebook business accounts to post “Coming Soon” announcements as well as images of the arcade and the games we will have.

SEO Website Marketing

The arcade will invest funds into maintaining a strong SEO presence on search engines like Google and Bing. When a person types in “local arcade” or “Seattle arcade”, Hal’s Arcade will appear in the top three choices. The website will include the full menu, location, and list of games customers can play.

Merchandise

We will sell attractive merchandise with our logo and business name on it. When people see our merchandise, they will instantly recognize how fun and exciting our establishment is and want to see the arcade for themselves.

The pricing of Hal’s Arcade will be moderate and on par with competitors so customers feel they receive value when visiting our arcade.

Operations Plan

The following will be the operations plan for Hal’s Arcade. Operation Functions:

• Hal Jenkins will be the Owner/Operator of the arcade as well as the Manager. He will oversee the general operations of the arcade as well as interact with guests. To launch the arcade, Hal needs to hire the following staff:
• 10 wait staff who can wait on guests, serve food and drinks, and help customers throughout the arcade.
• 5 kitchen staff who will cook customers’ meals.
• 2 maintenance staff who can keep all the arcade games in working order.
• A Marketing Manager to develop the website, social media accounts, photography, and maintain the SEO presence.
• An Accountant who will handle the company’s accounting.

Milestones:

Hal’s Arcade will have the following milestones complete in the next six months.

• 6/1/2023 Finalize lease agreement
• 7/1/2023 Start design and build out of Hal’s Arcade
• 8/1/2023 Begin marketing campaign
• 9/1/2023 Finish design and build out
• 10/1/2023 Hire key staff
• 11/1/2023 Open Hal’s Arcade

Hal’s Arcade is founded and run by Hal Jenkins. Hal grew up playing arcade games with his father and brothers and has fond memories in arcades and gaming centers. He has dreamed his whole life of running his own arcade that can be the background to similar memories for other residents in the Seattle area.

For the past few years, Hal has managed a local arcade and gained considerable knowledge on the operations and management sides of running such a business. Though Hal does not have any experience running his own company, he will hire several staff who can help him manage the operations, marketing, and accounting aspects of the business.

Financial Plan

Key revenue & costs.

The key revenues for Hal’s Arcade will primarily come from charging customers to play our games. We also expect much of our revenue to come from selling food and drinks as well as prizes and merchandise.

The major cost drivers for the company will include equipment purchasing and maintenance, marketing expenses, salaries, overhead costs, and costs of supplies and food inventory.

Funding Requirements and Use of Funds

Key assumptions.

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and pay off the startup business loan.

• Initial Number of Customers Per Day: 200
• Average Meal Order Value: $50
• Average Arcade Spending Per Customer: $50
• Annual Lease: $100,000

Financial Projections

Income statement.

		FY 1	FY 2	FY 3	FY 4	FY 5
Revenues
	Total Revenues	$360,000	$793,728	$875,006	$964,606	$1,063,382
Expenses & Costs
	Cost of goods sold	$64,800	$142,871	$157,501	$173,629	$191,409
	Lease	$50,000	$51,250	$52,531	$53,845	$55,191
	Marketing	$10,000	$8,000	$8,000	$8,000	$8,000
	Salaries	$157,015	$214,030	$235,968	$247,766	$260,155
	Initial expenditure	$10,000	$0	$0	$0	$0
	Total Expenses & Costs	$291,815	$416,151	$454,000	$483,240	$514,754
EBITDA		$68,185	$377,577	$421,005	$481,366	$548,628
	Depreciation	$27,160	$27,160	$27,160	$27,160	$27,160
EBIT		$41,025	$350,417	$393,845	$454,206	$521,468
	Interest	$23,462	$20,529	$17,596	$14,664	$11,731
PRETAX INCOME		$17,563	$329,888	$376,249	$439,543	$509,737
	Net Operating Loss	$0	$0	$0	$0	$0
	Use of Net Operating Loss	$0	$0	$0	$0	$0
	Taxable Income	$17,563	$329,888	$376,249	$439,543	$509,737
	Income Tax Expense	$6,147	$115,461	$131,687	$153,840	$178,408
NET INCOME		$11,416	$214,427	$244,562	$285,703	$331,329

Balance Sheet

		FY 1	FY 2	FY 3	FY 4	FY 5
ASSETS
	Cash	$154,257	$348,760	$573,195	$838,550	$1,149,286
	Accounts receivable	$0	$0	$0	$0	$0
	Inventory	$30,000	$33,072	$36,459	$40,192	$44,308
	Total Current Assets	$184,257	$381,832	$609,654	$878,742	$1,193,594
	Fixed assets	$180,950	$180,950	$180,950	$180,950	$180,950
	Depreciation	$27,160	$54,320	$81,480	$108,640	$135,800
	Net fixed assets	$153,790	$126,630	$99,470	$72,310	$45,150
TOTAL ASSETS		$338,047	$508,462	$709,124	$951,052	$1,238,744
LIABILITIES & EQUITY
	Debt	$315,831	$270,713	$225,594	$180,475	$135,356
	Accounts payable	$10,800	$11,906	$13,125	$14,469	$15,951
	Total Liability	$326,631	$282,618	$238,719	$194,944	$151,307
	Share Capital	$0	$0	$0	$0	$0
	Retained earnings	$11,416	$225,843	$470,405	$756,108	$1,087,437
	Total Equity	$11,416	$225,843	$470,405	$756,108	$1,087,437
TOTAL LIABILITIES & EQUITY		$338,047	$508,462	$709,124	$951,052	$1,238,744

Cash Flow Statement

		FY 1	FY 2	FY 3	FY 4	FY 5
CASH FLOW FROM OPERATIONS
	Net Income (Loss)	$11,416	$214,427	$244,562	$285,703	$331,329
	Change in working capital	($19,200)	($1,966)	($2,167)	($2,389)	($2,634)
	Depreciation	$27,160	$27,160	$27,160	$27,160	$27,160
	Net Cash Flow from Operations	$19,376	$239,621	$269,554	$310,473	$355,855
CASH FLOW FROM INVESTMENTS
	Investment	($180,950)	$0	$0	$0	$0
	Net Cash Flow from Investments	($180,950)	$0	$0	$0	$0
CASH FLOW FROM FINANCING
	Cash from equity	$0	$0	$0	$0	$0
	Cash from debt	$315,831	($45,119)	($45,119)	($45,119)	($45,119)
	Net Cash Flow from Financing	$315,831	($45,119)	($45,119)	($45,119)	($45,119)
	Net Cash Flow	$154,257	$194,502	$224,436	$265,355	$310,736
	Cash at Beginning of Period	$0	$154,257	$348,760	$573,195	$838,550
	Cash at End of Period	$154,257	$348,760	$573,195	$838,550	$1,149,286

Arcade Business Plan FAQs

What is an arcade business plan.

An arcade business plan is a plan to start and/or grow your arcade business. Among other things, it outlines your business concept, identifies your target customers, presents your marketing plan and details your financial projections.

You can easily complete your Arcade business plan using our Arcade Business Plan Template here .

What are the Main Types of Arcade Businesses? 

There are a number of different kinds of arcade businesses , some examples include: Vintage games and pinball machines, Redemption games, Interactive games, Barcades.

How Do You Get Funding for Your Arcade Business Plan?

Arcade businesses are often funded through small business loans. Personal savings, credit card financing and angel investors are also popular forms of funding.

What are the Steps To Start an Arcade Business?

Starting an arcade business can be an exciting endeavor. Having a clear roadmap of the steps to start a business will help you stay focused on your goals and get started faster.

1. Develop An Arcade Business Plan - The first step in starting a business is to create a detailed arcade business plan that outlines all aspects of the venture. This should include potential market size and target customers, the services or products you will offer, pricing strategies and a detailed financial forecast. 

2. Choose Your Legal Structure - It's important to select an appropriate legal entity for your arcade business. This could be a limited liability company (LLC), corporation, partnership, or sole proprietorship. Each type has its own benefits and drawbacks so it’s important to do research and choose wisely so that your arcade business is in compliance with local laws.

3. Register Your Arcade Business - Once you have chosen a legal structure, the next step is to register your arcade business with the government or state where you’re operating from. This includes obtaining licenses and permits as required by federal, state, and local laws.

4. Identify Financing Options - It’s likely that you’ll need some capital to start your arcade business, so take some time to identify what financing options are available such as bank loans, investor funding, grants, or crowdfunding platforms.

5. Choose a Location - Whether you plan on operating out of a physical location or not, you should always have an idea of where you’ll be based should it become necessary in the future as well as what kind of space would be suitable for your operations.

6. Hire Employees - There are several ways to find qualified employees including job boards like LinkedIn or Indeed as well as hiring agencies if needed – depending on what type of employees you need it might also be more effective to reach out directly through networking events.

7. Acquire Necessary Arcade Equipment & Supplies - In order to start your arcade business, you'll need to purchase all of the necessary equipment and supplies to run a successful operation.

8. Market & Promote Your Business - Once you have all the necessary pieces in place, it’s time to start promoting and marketing your arcade business. This includes creating a website, utilizing social media platforms like Facebook or Twitter, and having an effective Search Engine Optimization (SEO) strategy. You should also consider traditional marketing techniques such as radio or print advertising. 

Learn more about how to start a successful arcade business:

• How to Open an Arcade

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Arcade Business

Back to All Business Ideas

Play and Prosper: Launching an Arcade Business

Written by: Carolyn Young

Carolyn Young is a business writer who focuses on entrepreneurial concepts and the business formation. She has over 25 years of experience in business roles, and has authored several entrepreneurship textbooks.

Edited by: David Lepeska

David has been writing and learning about business, finance and globalization for a quarter-century, starting with a small New York consulting firm in the 1990s.

Published on April 7, 2022 Updated on August 1, 2024

Investment range

$65,000 - $130,000

Revenue potential

$156,000 - $312,000 p.a.

Time to build

1 – 3 months

Profit potential

$47,000 - $94,000 p.a.

Industry trend

Vital aspects to consider when kicking off your arcade business:

• Define your concept — Decide on the type of arcade you want to create, such as a traditional arcade, a retro-themed arcade, a family entertainment center, or an e-sports arena.
• Entertainment permits — Check local regulations and obtain any necessary permits for operating arcade games , offering food and beverages, and hosting events.
• Choose a location — Select a high-traffic location with adequate space for arcade games, seating, and additional amenities. Consider accessibility, parking, and proximity to other entertainment venues or shopping centers.
• Arcade games — Invest in a diverse selection of arcade games, including classic games, modern video games, redemption games, and interactive attractions. Regularly update your game selection to keep customers engaged.
• Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
• Legal business aspects — Register for taxes, open a business bank account, and get an EIN .
• Pricing strategy — Set competitive prices based on market research, cost analysis, and desired profit margins. Consider offering package deals, membership plans, and special promotions to attract more customers.

You May Also Wonder:

Can an arcade be profitable?

Typically, each machine can generate $200 to $400 per week in revenue. You just need to choose the best games to appeal to your target market, such as classic games for families, or action games for a younger crowd.

What games should I buy for my arcade?

You should buy games that target a certain market of people. If you want to attract families, you should buy classic arcade games and games that appeal to children. If you want to attract a younger crowd, look at the types of games that are trending, such as action games.

What arcade games are most profitable?

Generally, games that offer a high level of engagement and excitement, such as racing games, shooting games, and interactive experiences, tend to be more profitable. Games that offer the opportunity to win prizes, such as claw machines and redemption games, can also be popular and profitable.

How can I attract and retain customers in my arcade business?

To attract and retain customers in your arcade business, you can focus on providing a high-quality customer experience that is engaging, entertaining, and memorable. This may include offering a wide variety of games and experiences, providing excellent customer service, hosting special events and promotions, and utilizing technology to enhance the customer experience. 

How can I create a unique and engaging atmosphere in my arcade?

To create a unique and engaging atmosphere in your arcade, you can focus on creating a theme or ambiance that appeals to your target audience. This may include using lighting, music, and decor to create a specific atmosphere, such as a retro or futuristic vibe. 

How do I source and purchase arcade games for my business?

To source and purchase arcade games for your business, you can work with manufacturers, distributors, and wholesalers in the industry. You can also attend trade shows and industry events to learn about new games and technologies, and network with other arcade owners to get recommendations and referrals. 

Step 1: Decide if the Business Is Right for You

Pros and cons.

Starting an arcade has pros and cons to consider before deciding if it’s right for you.

• Good Money – Profit margins for arcades are high
• Fun – Play your own games whenever you want
• Growing Market – Arcades are booming as family entertainment
• High Startup Costs – Games are expensive
• Crowded Market – Compete with the likes of Dave and Buster’s

Arcade industry trends

Industry size and growth.

• Industry size and past growth – The US arcade, food and entertainment complex industry is worth $3.1 billion in 2022 after expanding more than 50% since 2020.(( https://www.ibisworld.com/industry-statistics/market-size/arcade-food-entertainment-complexes-united-states/ ))
• Growth forecast – The US arcade, food and entertainment complex industry is projected to grow 16.5% in 2022. 
• Number of businesses – In 2022, 5,634 arcade, food and entertainment businesses are operating in the US.(( https://www.ibisworld.com/industry-statistics/number-of-businesses/arcade-food-entertainment-complexes-united-states/ )) 
• Number of people employed – In 2022, the US arcade, food and entertainment complex industry employs 54,594 people.(( https://www.ibisworld.com/united-states/market-research-reports/arcade-food-entertainment-complexes-industry/ )) 

Trends and challenges

Trends in the arcade industry include:

• Virtual reality games are becoming more and more common in arcades.
• In recent years, arcades have become a popular vacation activity. 

Challenges in the arcade industry include:

• Home gaming poses a threat to the arcade industry, as many gamers prefer to play at home.
• The negative publicity that violent games receive make it a challenge for arcades to have those types of games, which are still in demand by gamers. 

How much does it cost to start an arcade business?

Startup costs for an arcade range from $65,000 to $130,000. The largest expense is for the games, which can cost between $6,000 to $9,000 each, and the space itself. 

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
10 to 20 arcade games	$60,000 - $120,000	$90,000
Space rental deposit	$4,000 - $8,000	$6,000
Total	$65,550 - $132,100	$98,825

How much can you earn from an arcade business?

The average revenue per machine is about $300 per week. Your profit margin after rent, overhead, and labor should be about 30%. 

In your first year or two, if you have 10 machines, you’ll be bringing in $156,000 in annual revenue. This would mean $47,000 in profit, assuming that 30% margin. You could add 10 more machines at this point. With annual revenue of $312,000, you’d make a tidy profit of $94,000.

What barriers to entry are there?

There are a few barriers to entry for an arcade. Your biggest challenges will be:

• The high cost of the games
• Competing with larger arcades and entertainment centers

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Step 2: hone your idea.

Now that you know what’s involved in starting an arcade, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research arcades in your area to examine their products/services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing an arcade with virtual reality games, skeeball, the claw machine or a shooting game. 

You might consider targeting a niche market by specializing in a certain aspect of your industry, such as fighting games or classic arcade games.

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Plan your arcade games and amenities

You’ll just need to determine what games to purchase. Popular games to choose from might include:

• Pinball machine
• Air hockey 
• Mortal Kombat and fighting games 
• Big Buck Hunter and shooting games
• Jurassic Park
• Retro arcade games like Pac-Man

You could also offer snacks and alcoholic beverages with the right licensing. You could even make a game and craft beer arcade.

How much should you charge for arcade games?

Individual games generally cost $.25 to $.50 to play. Some arcades offer $10 to $15 cards or unlimited play for a limited period, such as one hour for $10. You should aim for a profit margin of about 30%.

Once you know your costs, you can use this Step By Step profit margin calculator to determine your mark-up and final price points. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your target market will depend on the type of games you purchase. If you buy retro arcade games or family-oriented games, your target market will be more established people who you can find on Facebook. 

Where? Choose a location for your arcade business

You’ll need to rent a space for your arcade, preferably one with high foot traffic, such as in a mall. When considering a location, it’s also important to think about your target audience. Look for a location near schools or universities if you plan on targeting younger demographics, or near family-friendly attractions if you plan on targeting families with children.

You could also consider a location near popular nightlife spots if you plan on targeting adults. You can find commercial space to rent in your area on sites such as Craigslist , Crexi , and Instant Offices .

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm an Arcade Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “arcade” or “game room”, boosts SEO
• Name should allow for expansion, for ex: “Playtime Entertainment” over “Pinball Palace”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Find a Domain

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Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that sets your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create an Arcade Business Plan

Here are the key components of a business plan:

• Executive Summary: Present a brief overview of your arcade business, highlighting its commitment to providing a diverse array of gaming experiences, from classic arcade games to modern virtual reality setups.
• Business Overview: Describe your business’s focus on operating an arcade that offers a variety of games, including video games, pinball machines, and redemption games.
• Product and Services: Detail the range of entertainment options, such as arcade games, party hosting services, and possibly food and beverage offerings.
• Market Analysis: Assess the demand for arcade entertainment in your area, considering factors like local demographics, entertainment trends, and family-friendly activities.
• Competitive Analysis: Compare your arcade to other local entertainment venues, focusing on your unique offerings like retro game collections, modern VR experiences, or party packages.
• Sales and Marketing: Outline your strategy for attracting customers, including advertising campaigns, social media engagement, and promotions for groups or parties.
• Management Team: Highlight the experience and skills of your team, particularly in entertainment management, customer service, and business operations.
• Operations Plan: Describe the operational aspects, including game maintenance, customer service, and facility management.
• Financial Plan: Provide an overview of financial aspects, covering startup costs, pricing strategies, and expected revenue.
• Appendix: Include supplementary documents such as equipment lists, market research data, or floor plans to support your business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Registering your business is an absolutely crucial step — it’s the prerequisite to paying taxes, raising capital, opening a bank account, and other guideposts on the road to getting a business up and running.

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you’re planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to arcades. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your arcade will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

Here are the main options:

• Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return.
• General Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns.
• Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts.
• C Corp – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation.
• S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC , which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization , and answer any questions you might have. 

Form Your LLC

Choose Your State

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Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number , or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

The IRS website also offers a tax-payers checklist , and taxes can be filed online.

It is important to consult an accountant or other professional to help you with your taxes to ensure you’re completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan .
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
• Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best option, other than friends and family, for funding an arcade business. You might also try crowdfunding if you have an innovative concept. 

Step 8: Apply for Licenses/Permits

Starting an arcade business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration ( OSHA ), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package . They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

This is not a step to be taken lightly, as failing to comply with legal requirements can result in hefty penalties.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account .

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your arcade business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks. 

You may want to use industry-specific software, such as  Clubspeed , centeredge , or semnox , to manage party reservations, purchases, and payments. 

• Popular web-based accounting programs for smaller businesses include Quickbooks , Freshbooks , and Xero . 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using services like WordPress, Wix, or Squarespace . This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization ( SEO ) practices. These are steps that help pages rank higher in the results of top search engines like Google.

Here are some powerful marketing strategies for your future business:

• Theme Nights and Events: Organize themed nights or events like retro gaming nights, tournaments, or cosplay contests to create a buzz and attract diverse crowds.
• Local SEO  — Regularly update your Google My Business and Yelp profiles to strengthen your local search presence.
• Loyalty Programs: Implement a loyalty program with rewards such as free game tokens, exclusive access, or discounts for frequent visitors to encourage repeat business.
• Social Media Challenges: Leverage social media by creating interactive challenges, like high-score competitions or user-generated content contests, to boost online engagement and attract a wider audience.
• Partnerships with Local Businesses: Establish partnerships with nearby restaurants, cinemas, or entertainment venues to cross-promote and offer joint discounts, expanding your customer base.
• Themed Decor and Ambiance: Enhance the overall customer experience by investing in themed decor and ambiance that aligns with popular gaming trends, creating a unique and immersive environment.
• Student and Group Discounts: Attract students and larger groups by offering special discounts during off-peak hours or designated days, fostering a sense of community and encouraging group visits.
• Mobile App Integration: Develop a mobile app for your arcade that allows users to check real-time availability of games, receive special offers, and accumulate points for discounts.
• Community Engagement: Actively engage with the local community by sponsoring school events, sports teams, or charity initiatives, establishing a positive reputation and building a supportive customer base.
• Referral Programs: Encourage word-of-mouth marketing by implementing referral programs where existing customers receive bonuses or discounts for bringing in new patrons.
• Dynamic Pricing: Implement dynamic pricing strategies, such as happy hour discounts or variable pricing based on peak hours, to optimize revenue and attract customers during slower periods.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your arcade meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your arcade business could be: 

• Family fun for all with classic arcade games
• Beat your friends at all the hottest games!
• Craft beer and the best retro arcade games

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running an arcade, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in arcades for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in arcades. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for an arcade business include:

• Arcade Attendants – take payments, assist customers
• General Manager – scheduling, accounting
• Marketing Lead – SEO strategies, social media

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed , Glassdoor , or ZipRecruiter . Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run an Arcade Business – Start Making Money!

Arcades are booming as the industry roars back after the pandemic. With an investment in games and a good location, you could start your own arcade and make good money riding the industry wave. The keys are to buy games that will appeal to a certain target audience, have a great location, and provide a great customer experience.

You came to the right place to learn about the business, and now you’re ready to get your game on and start your successful arcade!

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• Decide if the Business Is Right for You
• Hone Your Idea
• Brainstorm an Arcade Business Name
• Create an Arcade Business Plan
• Register Your Business
• Register for Taxes
• Fund your Business
• Apply for Licenses/Permits
• Open a Business Bank Account
• Get Business Insurance
• Prepare to Launch
• Build Your Team
• Run an Arcade Business - Start Making Money!

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• Sample Business Plans
• Entertainment & Media

Arcade Business Plan

Starting an arcade business has several of its own perks—of course, high-profit potential, diversified revenue streams, and flexible hours are there, but apart from, all that you also get to be the ultimate boss of fun and entertainment.

Sounds fun, isn’t it?

But before you start racking up those high scores, you need a solid arcade business plan in place to succeed.

Need help writing a business plan for your arcade business? You’re at the right place. Our arcade business plan template will help you get started.

Free Business Plan Template

Download our free business plan template now and pave the way to success. Let’s turn your vision into an actionable strategy!

• Fill in the blanks – Outline
• Financial Tables

How to Write an Arcade Business Plan?

Writing an arcade business plan is a crucial step toward the success of your business. Here are the key steps to consider when writing a business plan:

1. Executive Summary

An executive summary is the first section planned to offer an overview of the entire business plan. However, it is written after the entire business plan is ready and summarizes each section of your plan.

Here are a few key components to include in your executive summary:

Introduce your business:

Start your executive summary by briefly introducing your business to your readers.

This section may include the name of your arcade business, its location, when it was founded, the type of arcade business (E.g., traditional arcades, family entertainment centers, mobile arcades.), etc.

Market opportunity:

Summarize your market research, including market size, growth potential, and marketing trends. Highlight the opportunities in the market and how your business will fit in to fill the gap.

Product and services:

Highlight the services your arcade business will offer your clients. The USPs and differentiators you offer are always a plus.

For instance, you may include arcade games, virtual reality experiences, and eSports tournaments as your services and mention unique experiences and a variety of games as some of your USPs.

Marketing & sales strategies:

Outline your sales and marketing strategies—what marketing platforms you use, how you plan on acquiring customers, etc.

Financial highlights:

Briefly summarize your financial projections for the initial years of business operations. Include any capital or investment requirements, associated startup costs, projected revenues, and profit forecasts.

Call to action:

Summarize your executive summary section with a clear CTA, for example, inviting angel investors to discuss the potential business investment.

Ensure your executive summary is clear, concise, easy to understand, and jargon-free.

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2. Business Overview

The business overview section of your business plan offers detailed information about your business. The details you add will depend on how important they are to your business. Yet, business name, location, business history, and future goals are some of the foundational elements you must consider adding to this section:

Business description:

• Describe what kind of arcade business you run and the name of it. Here are some of the common types of arcade or gaming businesses:
• Traditional arcade
• Family entertainment center
• Mobile arcade
• eSports arcade
• Retro arcades
• Describe the legal structure of your arcade business, whether it is a sole proprietorship, LLC, partnership, or others.
• Explain where your business is located and why you selected the place.

Mission statement:

Business history:.

• Additionally, If you have received any awards or recognition for excellent work, describe them.

Future goal:

This section should provide a thorough understanding of your business, its history, and its future plans. Keep this section engaging, precise, and to the point.

3. Market Analysis

The market analysis section of your business plan should offer a thorough understanding of the industry with the target market, competitors, and growth opportunities. You should include the following components in this section.

Target market:

Start this section by describing your target market. Define your ideal customer and explain what types of services they prefer. Creating a buyer persona will help you easily define your target market to your readers.

For instance, teenagers, children, and families looking for fun and entertainment activities can be an ideal target market for an arcade business.

Market size and growth potential:

Describe your market size and growth potential and whether you will target a niche or a much broader market.

Competitive analysis:

Identify and analyze your direct and indirect competitors. Identify their strengths and weaknesses, and describe what differentiates your gaming services from them. Point out how you have a competitive edge in the market.

Market trends:

Analyse emerging trends in the industry, such as technology disruptions, changes in customer behavior or preferences, etc. Explain how your business will cope with all the trends.

For instance, virtual reality is disrupting the traditional arcade market. Explain how your business will use these technologies for sustainable business growth.

Regulatory environment:

List regulations and licensing requirements that may affect your arcade business, such as business registration, zoning regulations, employment laws, gaming laws, health and safety regulations, etc.

Here are a few tips for writing the market analysis section of your arcade business plan:

• Conduct market research, industry reports, and surveys to gather data.
• Provide specific and detailed information whenever possible.
• Illustrate your points with charts and graphs.
• Write your business plan keeping your target audience in mind.

4. Products And Services

The product and services section should describe the specific services and products that will be offered to customers. To write this section should include the following:

Describe your services:

Mention the arcade services your business will offer. This list may include services like,

• Virtual Reality experience
• eSports tournaments
• Prize redemption
• Arcade games sales or rental
• Hosting corporate events

Arcade games:

Describe the types of arcade games your facility will offer to game enthusiasts, including classing games, modern games, and games with advanced tech and graphics.

Quality measures:

This section should explain how you maintain quality standards and consistently provide the highest quality service.

Your quality measures may include regular maintenance of games, maintaining cleanliness, food and beverage quality, game variety, etc.

Additional Services:

Mention if your arcade offers any additional services. You may include services like party and event rentals, game sales and rental, serving food and beverages, and if there are any additional services.

In short, this section of your arcade plan must be informative, precise, and client-focused. By providing a clear and compelling description of your offerings, you can help potential investors and readers understand the value of your business.

5. Sales And Marketing Strategies

Writing the sales and marketing strategies section means a list of strategies you will use to attract and retain your clients. Here are some key elements to include in your sales & marketing plan:

Unique selling proposition (USP):

Define your business’s USPs depending on the market you serve, the equipment you use, and the unique services you provide. Identifying USPs will help you plan your marketing strategies.

For example, games with advanced graphics, vintage arcade games, unique experiences, and a family-friendly environment could be some of the great USPs for an arcade business.

Pricing strategy:

Describe your pricing strategy—how you plan to price your gaming services and stay competitive in the local market. You can mention any discounts you plan on offering to attract new customers to your facility.

Marketing strategies:

Discuss your marketing strategies to market your services. You may include some of these marketing strategies in your business plan—social media marketing, Google ads, brochures, email marketing, content marketing, and print marketing.

Sales strategies:

Outline the strategies you’ll implement to maximize your sales. Your sales strategies may include cross-business promotions, providing group discounts, hosting local gaming events, and providing referral discounts.

Customer retention:

Describe your customer retention strategies and how you plan to execute them. For instance, introducing loyalty programs, discounts on annual membership, personalized service, etc.

Overall, this section of your arcade or game zone business plan should focus on customer acquisition and retention.

Have a specific, realistic, and data-driven approach while planning sales and marketing strategies for your arcade business, and be prepared to adapt or make strategic changes in your strategies based on feedback and results.

6. Operations Plan

The operations plan section of your business plan should outline the processes and procedures involved in your business operations, such as staffing requirements and operational processes. Here are a few components to add to your operations plan:

Staffing & training:

Mention your arcade business’s staffing requirements, including the number of employees, game technicians, or support staff needed. Include their qualifications, the training required, and the duties they will perform.

Operational process:

Include the processes and procedures you will use to run your arcade business. Your operational processes may include game maintenance, cash management, inventory management, cleaning and maintenance, customer service, marketing, and sales.

Include the list of equipment and machinery required for the arcade, such as arcade games, cash registers, ticket dispensers, security cameras, maintenance tools, game tokens or cards, and other equipment.

Explain how these technologies and equipment help you maintain quality standards and improve the efficiency of your business operations.

Adding these components to your operations plan will help you lay out your business operations, which will eventually help you manage your business effectively.

7. Management Team

The management team section provides an overview of your arcade business’s management team. This section should provide a detailed description of each manager’s experience and qualifications, as well as their responsibilities and roles.

Founder/CEO:

Mention the founders and CEO of your arcade business, and describe their roles and responsibilities in successfully running the business.

Key managers:

Introduce your management and key team members, and explain their roles and responsibilities.

It should include key executives, senior management, and other department managers (e.g., Arcade manager, Game Technician manager.) involved in the arcade business operations, including their education, professional background, and any relevant experience in the gaming industry.

Organizational structure:

Explain the organizational structure of your management team. Include the reporting line and decision-making hierarchy.

Compensation plan:

Describe your compensation plan for the management and staff. Include their salaries, incentives, and other benefits.

Advisors/consultants:

Mentioning advisors or consultants in your business plans adds credibility to your business idea.

So, if you have any advisors or consultants, include them with their names and brief information about roles and years of experience.

This section should describe the key personnel for your arcade services, highlighting how you have the perfect team to succeed.

8. Financial Plan

Your financial plan section should summarize your business’s financial projections for the first few years. Here are some key elements to include in your financial plan:

Profit & loss statement:

Describe your projected revenue, operational, and service costs in your projected profit and loss statement. Make sure to include your business’s expected net profit or loss.

Cash flow statement:

This section should estimate and describe the cash flow for the first few years of your operation. This may include billing invoices, payment receipts, loan payments, and any other cash flow statements.

Balance sheet:

Create a projected balance sheet documenting your arcade business’s assets, liabilities, and equity.

Break-even point:

Determine and mention your business’s break-even point—the point at which your business costs and revenue will be equal.

This exercise will help you understand how much revenue you need to generate to sustain or be profitable.

Financing needs:

Calculate costs associated with starting an arcade business, and estimate your financing needs and how much capital you need to raise to operate your business. Be specific about your short-term and long-term financing requirements, such as investment capital or loans.

Be realistic with your financial projections, and make sure you offer relevant information and evidence to support your estimates.

9. Appendix

The appendix section of your plan should include any additional information supporting your business plan’s main content, such as market research, legal documentation, financial statements, and other relevant information.

• Add a table of contents for the appendix section to help readers easily find specific information or sections.
• In addition to your financial statements, provide additional financial documents like tax returns, a list of assets within the business, credit history, and more. These statements must be the latest and offer financial projections for at least the first three or five years of business operations.
• Provide data derived from market research, including stats about the arcade industry, user demographics, and industry trends.
• Include any legal documents such as permits, licenses, and contracts.
• Include any additional documentation related to your business plan, such as product brochures, marketing materials, operational procedures, etc.

Use clear headings and labels for each section of the appendix so that readers can easily find the necessary information.

Remember, the appendix section of your game zone business plan should only include relevant and important information supporting your plan’s main content.

The Quickest Way to turn a Business Idea into a Business Plan

Fill-in-the-blanks and automatic financials make it easy.

This sample arcade business plan will provide an idea for writing a successful arcade plan, including all the essential components of your business.

After this, if you still need clarification about writing an investment-ready business plan to impress your audience, download our arcade business plan pdf .

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Frequently asked questions, why do you need an arcade business plan.

A business plan is an essential tool for anyone looking to start or run a successful arcade business. It helps to get clarity in your business, secures funding, and identifies potential challenges while starting and growing your business.

Overall, a well-written plan can help you make informed decisions, which can contribute to the long-term success of your arcade business.

How to get funding for your arcade business?

There are several ways to get funding for your arcade business, but self-funding is one of the most efficient and speedy funding options. Other options for funding are:

Small Business Administration (SBA) loan

Crowdfunding, angel investors.

Apart from all these options, there are small business grants available, check for the same in your location and you can apply for it.

Where to find business plan writers for your arcade business?

There are many business plan writers available, but no one knows your business and ideas better than you, so we recommend you write your arcade business plan and outline your vision as you have in your mind.

What is the easiest way to write your arcade business plan?

A lot of research is necessary for writing a business plan, but you can write your plan most efficiently with the help of any arcade business plan example and edit it as per your need. You can also quickly finish your plan in just a few hours or less with the help of our business plan software.

About the Author

Upmetrics Team

Upmetrics is the #1 business planning software that helps entrepreneurs and business owners create investment-ready business plans using AI. We regularly share business planning insights on our blog. Check out the Upmetrics blog for such interesting reads. Read more

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How to Open an Arcade in 14 Steps (In-Depth Guide)

Updated:   January 26, 2024

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The arcade gaming industry is experiencing a nostalgic resurgence, with the global arcade gaming market projected to grow at a compound annual growth rate (CAGR) of 1.99% between 2022 and 2027 . With the popularity of barcades and other social entertainment venues on the rise, now may be the perfect time to turn your gaming passion into profits by opening an arcade.

An arcade start-up has plenty to get excited about. Today’s arcade entrepreneurs can take advantage of innovative new technologies like virtual reality and innovative payment systems to create unforgettable gaming experiences. They can develop laser tag arenas or host gaming tournaments and events to attract gaming enthusiasts hungry for the arcade’s classic sights and sounds.

This guide will walk you through how to open an arcade. Topics include market research into arcade games and your target market, competitive analysis, registering an EIN, opening a business bank account, common startup business expenses, and more.

1. Conduct Arcade Market Research

Market research is essential to starting a successful arcade business. The arcade industry is full of unique variables that set it apart from others in the entertainment market. Market research offers details on the target market, trends in new and classic arcade games, pricing models, and more.

Some details you’ll learn through market research include:

• The ample youth population with increasing disposable incomes makes the Asian Pacific market an ideal location for an arcade business.
• North America and Europe present strong opportunities as well thanks to rising demand for social interactive gaming experiences.
• The arcade gaming centers market is fragmented, with portfolios ranging from family entertainment centers that include party rooms for younger children to specialized gaming cafés.
• Family entertainment centers remain popular, though the increasing focus on competitive and recreational gaming for adults is driving demand for specialized gaming bars and cafés .
• Either business model can be profitable if strategically placed in high foot traffic areas hungry for entertainment.
• Hosting birthday parties, gaming competitions, or using the space as an event venue during off-peak hours helps increase ROI.
• Arcade bars can also integrate craft beer, unique cocktails, and food menus to attract patrons.
• The keys to succeeding with an arcade start-up include having a clear target demographic and offering the latest arcade gaming technology like VR.
• Keeping a fresh selection of games, maintaining equipment, and focusing on customer service also pays dividends.

With nostalgic trends bringing arcades back, now presents an opportune time for entrepreneurs to capitalize on this growth industry. Despite rising competition from mobile and console gaming, arcades can leverage the appetite for interactive social entertainment as a key differentiator.

2. Analyze the Competition

Understanding the competitive landscape is critical for any arcade start-up. First, research arcade gaming centers in your geographic area to analyze offerings and foot traffic.

Some ways to get to know about other local businesses as you develop an arcade business plan include:

Drive-by assessments allow you to gauge parking availability, interior spacing, game selection visibility, and customer demographics. Competitor visits then let you experience service quality first-hand while you audit pricing, game variety, food menus, and bonus offerings like prize redemption.

Online reviews and social media monitoring also yield valuable competitive intelligence. Review sites like Yelp and Google provide customer commentary on strengths and weaknesses. Meanwhile, following competitor social media unveils promotional strategies and events that successfully drive patronage. Sales data from sites like Sensor Tower can uncover top-grossing arcade apps and games as well.

Another effective tactic is running anonymous online surveys with those in your target area. Simple questions like “Which local arcade do you visit most and why?” uncover brand perceptions, experiential preferences, and decision motivators. Transportation access, venue aesthetics, game selection, and hospitality all play pivotal roles.

Monitoring local business listings gives visibility into how rivals drive online awareness as well. How often do they update Google My Business profiles? What tactics boost visibility, location pins, photospheres, posts, and offers? Essential for driving discoverability.

3. Costs to Start an Arcade Business

Starting an arcade requires significant upfront capital for gaming equipment, facility leasing/purchase, construction, inventory, licensing, payroll, marketing, and other expenses before opening doors to the public. Thorough planning and cost projections early on are essential.

Startup Costs

In terms of start-up costs, acquiring specialized arcade equipment like videogame consoles, arcade cabinets, pinball machines, air hockey tables, VR headsets, and prize redemption stations takes top priority.

These can range greatly in pricing, but allotting at least $50,000 – $100,000 provides flexibility for a strong initial game selection Mixing classics like Pac-Man alongside multiplayer fighting games and leading VR titles keeps offerings fresh. Refurbished arcade cabinets help limit costs as well.

Leasing an appropriately zoned retail space for the arcade comes next, often demanding $4 – $10 per square foot monthly for commercial real estate. For a 2500 square foot unit, that equates to $10k – $25k in rent per year, excluding property taxes and association fees.

Purchasing a building brings more financial stability long-term but requires around $200k – $400k up front for mortgage financing, taxes, and insurance. Paying for necessary renovations tailored to the arcade floor plan also falls in the $75-$150k range.

Outfitting the interior with a customized layout warrants supplies like carpeting, lighting, stools for consoles/bars, shelving for redemption prizes, counters, and decorative materials to match the branding. These fixtures ring up around $15k – $25k altogether.

Required business registration, permits, and insurance need to factor in up to $5k as well for costs like sales licensing, food handler training, public liability coverage, and more. Legal and professional fees (logo work, contract drafting, accounting setup) can run $3k – $7k. Don’t forget the change fund (at least $500) for registers and coin dispensers too!

Ongoing Costs

Staffing represents a significant monthly expense in addition to gaming equipment lease payments, inventory ordering, software subscriptions, maintenance/repair, advertising, utilities, and other costs. Having a dependable team to handle customer service, sales, tech troubleshooting, and administrative tasks is pivotal.

Industry wages for managerial and full-time floor staff land around $45k per employee. For a staff of at least 4 (1 manager, 3 attendants) payroll reaches upwards of $200k annually. Workers’ compensation and benefits jack up labor overhead exponentially too.

While volume dictates costs substantially month-to-month, projected annual operating expenses easily exceed $300k including the fixed salaries, non-employee expenditures, and COGS.

Savings from refurbished machine purchases and quarterly vendor account reconciliation help offset such overheads. Overall though, the complexities of managing an arcade call for intensive operational planning paired with circumspect financial oversight, year in and year out.

4. Form a Legal Business Entity

Launching any arcade demands weighing the pros, cons, and liabilities of each legal structure. As a sole proprietorship, your arcade assumes no separate business identity from personal assets, spelling immense financial risk. Any legal trouble directly impacts your home and bank accounts.

Sole Proprietorship

A sole proprietorship is a solid company structure for any single-owner business. It can also be used if a married couple wants to share ownership of a business. A sole proprietorship keeps you in the driver’s seat where small business administration and big decisions are made, but it doesn’t protect your assets in the event of legal trouble.

Partnership

Partnerships seem an affordable option as you equally split arcade liabilities with others. But any co-owner blunders or conflicts become your own. Their assets stay tied to yours. Partnerships face heavier tax burdens as well. And good luck getting a bank loan when co-owners’ lives inevitably shift.

Corporation

Establishing a Corporation better shields your assets from arcade troubles while easing expansion prospects long-term. Its formal designation as separate entities adds legitimacy and trust for securing business financing too. Just beware of added paperwork and annual renewal fees. Corporations are the most complicated and expensive entities to form.

Limited Liability Company (LLC)

An LLC proves ideal for combining personal asset protection with pass-through taxation flexibility for arcade entrepreneurs. Setting up an LLC only demands around a few hundred dollars plus moderate filing and renewal fees annually. Compare that to incorporating where state laws require appointing directors/officers and issuing shares. This added complexity benefits larger chains but overcomplicates most arcade launches.

5. Register Your Business For Taxes

Securing your arcade’s Employer Identification Number (EIN) establishes your legitimate business identity in the eyes of the IRS and state regulators. The EIN formally registers your arcade enterprise separate from your identity for tax and employer purposes. Without one, you can’t open critical business bank accounts or apply for needed licenses.

Thankfully obtaining an EIN takes just minutes online. Simply access the IRS EIN Assistant tool and select the option best reflecting your LLC ownership structure. Enter your identity details like name, address, and SSN along with your soon-to-be arcade’s legal name and address.

With EIN secured, call your state revenue office to register for necessary sales licensing so you can legally collect and remit taxes. This requires submitting your state sales tax permit application form along with a one-time registration fee ranging from $10-$50 depending on your state.

Additionally, certain local jurisdictions require separate business or amusement licenses for arcade operations on top of standard sales permits. Research specific municipality statutes to steer clear of compliance violations or surprise fees down the road. Consider assigning these administrative tasks to a reliable manager or support staffer as operations ramp up.

Between the SZN, sales licenses, and any local amusement/gaming permits, properly registering your arcade covers crucial legal and tax bases while empowering genuine market legitimacy. Taking these foundational steps flags you as an ethical business committed to integrity from day one.

6. Setup Your Accounting

Juggling arcade operations without disciplined accounting Habits courts financial disaster long-term. Tracking revenues, inventory, wages, taxes, and assorted expenses demands detailed recordkeeping, or else profit leakage and IRS penalties become inevitable. Thankfully modern tools paired with an adept accountant’s guidance make accounting manageable.

Accounting Software

Implementing QuickBooks early on works magic through automatically importing arcade sales receipts and vendor bills when synced to business bank/credit card accounts. This eliminates manual data entry drudgery so you focus on customers instead. QuickBooks also automates payroll handling, reconciliation, invoicing, refund processing, and other tedious paperwork.

Hire an Accountant

Supplementing with an accountant’s expertise ensures full compliance across taxation, accounting rules, auditing protocols, and more as your arcade enterprise expands. A qualified accountant also provides invaluable business advisory services across growth planning, expense optimization, payroll strategies, and investment decisions over time. Expect fees of around $200-$500 monthly when utilizing an accountant year-round.

Open a Business Bank Account

Strictly separating all arcade finances protects personal assets and simplifies reporting. Establish dedicated business checking/savings accounts plus a business credit card only used for arcade expenditures. Personal and arcade funds must remain wholly distinct for easier accounting and heightened liability protection.

Apply for Business Credit Cards

Applying for a business credit card also assists cash flow via flexible financing. Lenders determine credit limits according to annual arcade revenue projections. Ensure all projections seem reasonable since personal credit scores are now irrelevant. Instead, provide the arcade’s EIN, projected sales, and ownership/entity documentation during application. Then let financing fuel growth!

7. Obtain Licenses and Permits

Beyond standard business registration, arcades demand specialized permitting tied to gaming devices, youth admission, food & beverage service, and amusement tax protocols. Find federal license information through the U.S. Small Business Administration . The SBA also offers a local search tool for state and city requirements.

At a minimum, an operational arcade license from your city must be displayed publicly per local statutes. Fees range $100-$500+ for review, processing, and site inspections to ensure building codes and safety standards stay met. Zoning classifications must enable commercial recreation too. To confirm your intended property address works before signing any lease.

Usage licenses then come for the units themselves including game consoles, coin dispensers, VR rigs, and redemption prize machines. Permits range from $50-$100 apiece in recurring fees, capped at certain quantity limits depending on square footage. Carefully tally all arcade equipment ahead of time to avoid surprise gaps or charges.

With minors comprising the target demographic, attenuated care for safety and supervision remains paramount. Most states mandate obtaining amusement ride operator permits for entertainment venues focused on serving those under 18. These certification review processes examine employee background checks, security protocols, emergency procedures, and injury incident readiness to verify sufficient precautions are taken.

Health permits similarly demand awareness should your arcade offer traditional cuisine, just snacks and fountain drinks, or integrate a full-scale restaurant. Check state statutes on necessary food handler training, site compliance, public operating standards, and kitchen equipment rules if going beyond pre-packaged goods.

Don’t forget amusement taxes which apply steep surcharges between 5-10% on arcade revenues in certain cities. Beyond sales taxes, amusement levies help fund municipal budgets by targeting admissions fees, equipment usage charges, prize redemption token purchases, and similar arcade activities.

8. Get Business Insurance

Operating any arcade without adequate insurance invites financial ruin should equipment get damaged, customers get injured, or other unthinkable scenarios arise. Yet convincing entrepreneurs to splurge on protection plans rather than flashy new consoles proves challenging. Here’s a perspective on coverage critical that prudent owners cannot afford to overlook.

• Scenario A: a normally docile redemption prize machine unexpectedly topples during peak hours, injuring a child while sending two nearby teens to the hospital. The untreated floor anchor failure triggers a flurry of seven-figure lawsuits. Was proper liability coverage in place to prevent bankruptcy?
• Scenario B: a freak electrical storm strikes your city one Friday night, sending a power surge racing through circuits and frying every arcade cabinet beyond functionality. With no safety net, can you afford to replace $300,000+ in charred gaming inventory?
• Scenario C: En route to a trade show, your box truck loaded with prized arcade wares gets T-boned on the highway. The uninsured driver flees while your custom cargo sinks to a total loss without adequate protection. Does closure loom without stopgap coverage?

Now ponder those worst-case scenarios with ample insurance backing every corner of operations. Accident claims help replace damaged goods plus handle legal settlements without batting an eye. Business interruption policies ensure payroll, utilities, and fixed costs get covered when unforeseen events like natural disasters force unexpected closures. Customized protection brings peace of mind.

9. Create an Office Space

Establishing an administrative headquarters separates oversight duties from distracting arcade clamor crucial for maximizing productivity. Managers require quiet surroundings to concentrate on vital paperwork like payroll, bookkeeping, inventory orders, and vendor accounts while fielding permits and licenses.

Coworking Office

For managers overseeing multiple locations, coworking spaces like WeWork provide movable offices suiting expansion ambitions. Membership plans offer 24/7 building access, utilities, administrative support staff, and amenities from $300-500 monthly. WeWork empowers flexibility.

Retail Office

If you prefer singular workspace permanency, retail office suites adjacent to established arcades centralize oversight. The proximity encourages direct engagement with customer experiences while keeping behind-the-scenes businesses physically separate on-premises. Expect lease rates around $800 and up monthly based on square footage needs.

10. Source Your Equipment

Launching an arcade demands significant upfront investment in specialized gaming equipment. From iconic staples like PacMan to trendy VR setups, attracting clientele requires the hottest entertaining attractions. Thankfully myriad options exist for furnishing state-of-the-art diversions without draining startup capital.

Buying brand-new equipment from leading manufacturers ensures flawless functionality for years while allowing customization latitude. Work directly with sales reps to tailor gaming suite specifications to your space limitations, power constraints, aesthetic preferences, and targeted demographic appeal. Just brace for premium price tags ranging from $75k and beyond for robust initial inventory buys.

Scouring the resale market unearths cost savings on gently used machines discarded by shuttered arcades. Vintage gems like pinball offer wonderful retro flair. Facebook Marketplace and Craigslist provide local pickup options for those upgrading inventory or downsizing. Expect to pay 40-60% less buying second-hand. Just inspect closely and test everything before swiping cards.

Renting gaming equipment also helps new arcades conserve capital for other build-out expenses. Skip repair and maintenance costs by signing flexible short-term rental contracts instead of owning outright. Operators like BMI Gaming offer reasonable weekly rates. This lets entrepreneurs regularly rotate attractions keeping offerings fresh. Customers enjoy trying new technology without the monopoly fatigue.

Leasing strikes an ownership feel without huge frontline capital demands through spreading payments over months or years. Benefit from reliable tech and negotiate service bundles without obliterating budgets. Be sure to scrutinize terms for hidden rate hikes, ownership delays, and early termination penalties before committing, however.

11. Establish Your Brand Assets

Cultivating an unmistakable brand identity fuels crucial customer awareness, retention, and referrals over the long term. While gameplay quality drives the initial trial, a polished aesthetic matching experiential promises gives arcades mass appeal and sticking power.

Get a Business Phone Number

Centralizing business communications under a single phone number projects consistency and professionalism across all client touchpoints. Services like RingCentral provide toll-free local numbers with call routing, voicemail transcriptions, SMS capabilities, and more starting at $30 monthly.

Design a Logo

Designing an iconic, meaningful logo also ignites visual familiarity and nostalgic connections with target demographics. Classic arcade iconography modeled through services like Looka simplifies graphic production starting at around $20 per logo. Modify colors, typography, shapes, and themes until you land the perfect mark aligning with your brand personality.

Print Business Cards

Printing staff business cards, loyalty program pamphlets, redemption prize signage, and table tents bearing the vibrant logo multiplies subliminal impressions. Sites like Vistaprint offer 500 basic cards for under $50 including free design templates to incorporate graphics. Cards enable personal outreach during community events and site visits while other collateral blankets the arcade with awareness-building visibility.

Get a Domain Name

Staking an online home for customers through registering an intuitive domain cements brand legitimacy while owning a digital asset. Namecheap features domains from $8.88 annually plus free email hosting, SSL certification, and private registration if desired. Choose short, simple name variants centered on location or experience themes for easy retention.

Design a Website

Building a sleek website alongside social media profiles showcases gameplay offerings 24/7 to web searchers. User-friendly services like Wix facilitates intuitive site creation without coding starting at $14 monthly. For more advanced designs, Fiverr connects affordable developers, copywriters, and graphics geniuses beginning around $5 per task.

12. Join Associations and Groups

While competitive zeal drives most entrepreneurs, collaborating with industry allies through associations unlock support, insights, and connections pivotal for excelling in unfamiliar terrain. Rather than reinventing gameplay wheels alone, leveraging groups’ Veteran savvy illuminates proven formulas worth borrowing.

Local Associations

Local associations like the American Amusement Machine Association provide both online and in-person opportunities interfacing with amusement innovation frontrunners. Attending conferences keeps the inspiration flowing as you examine growth strategies or bleeding-edge attraction sneak peeks other owners are eyeing.

Local Meetups

Ongoing meetups also encourage consistent networking through feeds like Meetup . Typing “arcade” into location-based searches uncovers active regional groups coordinating gatherings for industry insiders plus gaming fans. Hosting or attending recurring events nurtures community ties and referral pipelines as you demonstrate thought leadership in discussing emerging sector trends.

Facebook Groups

Meanwhile, niche gaming groups on Facebook facilitate broader digital conversations examining pressing topics. The Arcade Game Buyers community features over 4.8k global members sharing repair tips, inventory sourcing guidance, and troubleshooting simulations. Others like Business Startups Forum offer mentorship for raising capital.

13. How to Market an Arcade Business

Savvy marketing remains non-negotiable for sustaining steady arcade patronage beyond grand opening hype. Unless intentionally promoting offerings through paid and organic channels, locally-reliant entertainment venues quickly fade into obscurity when relying solely on word-of-mouth referrals.

Personal Networking

Tap friends and existing networks first for invaluable seed endorsements. Offer incentives like free gameplay passes to delighted visitors providing social media tags or positive reviews. Nothing fuels further patronage like visuals of friends embracing fun.

Digital Marketing

Digital platforms also offer affordable advertising scalability to keep attractions top of mind nearby and beyond. Consider:

• Google Ads campaigns to capture web searchers. Target those seeking local family fun or specific gameplay options using tailored ad copy and landing pages.
• Facebook/Instagram ads displaying vivid event images with irresistible captions and On-Site activity tagging for social buzz.
• Launching a YouTube channel with gameplay highlights reels and tournament recaps to amass subscribers.
• Posting on community event pages and neighborhood listservs.
• Optimizing Google Business profile with immersive imagery including virtual tour clips.
• Publishing ongoing blog content highlighting new games and attendee experiences for SEO.
• Email/SMS list segmented outreach with discounts and loyalty promotions to drive reactivation.

Traditional Marketing

Traditional platforms like print, radio, and out-of-home displays also furnish cost-efficient brand reinforcement:

• Distributing bold flyers and coupons to pedestrian hotspots, schools, etc.
• Sponsoring Little League teams or community fundraisers for goodwill.
• Claiming retail/restaurant table tents and displays to captivate diners.
• Placing vibrant street pole banners near heavily trafficked corridors.
• Running 30-second radio spots on stations popular with your target demographic.
• Advertising on billboards along commuter routes or highways with heavy impressions.

An integrated marketing framework mixing organic buzz, paid ads, and offline visibility keeps arcade environs brimming without overextending ad budgets or overwhelming patrons. Assessing campaign analytics guides optimal channel focus for maximizing returns.

14. Focus on the Customer

While gameplay creativity and technical polish drive initial trial, an arcade’s long-term prosperity ultimately depends on hospitality exceeding expectations every visit. When staff radiates genuine care, referrals and loyalty build steadily.

Consider an attendant noticing a shy tween struggling to master a new VR game. Taking a moment to explain proper calibration and stance tips leaves the grateful player with improved competency and confidence. Such warm guidance costs nothing but earns goodwill dividends as the tween enthusiastically recounts gameplay gains to friends.

Similarly, imagine a family celebrating a birthday when redemption prize systems unexpectedly crash. An owner apologizing profusely and providing complimentary gaming passes for a future visit assuages frustration while creating positive perceptions. That family likely returns while sharing about the integrity.

With countless entertainment alternatives vying for patrons’ time, arcades relying solely on hardware buzz quickly lose luster. But those delivering consistently thoughtful service stand apart. Customers intrinsically trust staff have their best interests in mind. Word spreads as local havens earn reputations for transcending transactions with genuine hearts.

In a world filled with cold competition, leading with compassion proves the ultimate disruptor. Make service enhancements a top priority for frontline teams through ongoing training. Nurturing a culture where employees instinctively exceed expectations at every turn seeds an unshakeable foundation for expansion years beyond grand opening fanfare.

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Table of contents, unveiling the arcade business model.

• 3 April, 2024

Introduction to Starting an Arcade Business

If you have a passion for gaming and want to turn it into a profitable venture, starting an arcade business might be the perfect opportunity. Before diving into the world of arcade entrepreneurship, it’s important to understand the industry and the potential profits it can offer.

Overview of the Arcade Industry

The arcade industry has a rich history and continues to captivate gamers of all ages. Arcades provide a unique gaming experience by offering a wide range of arcade games, from classic retro titles to cutting-edge virtual reality experiences. The nostalgic appeal of arcades, combined with the social atmosphere they provide, makes them a popular destination for gamers and gaming enthusiasts.

Arcade businesses typically operate by charging customers for the time or number of plays on arcade games. They may also generate revenue through additional services such as food, beverages, and merchandise sales. The success of an arcade business depends on factors such as location, game selection, customer experience, and effective marketing strategies.

Potential Profits in the Arcade Business

When managed effectively, an arcade business can yield substantial profits. Industry sources indicate that an average arcade can generate between $1100 and $2000 a week in profits, with earnings varying depending on location and operational costs ( Fin Models Lab ). However, it’s important to note that these figures are estimates and actual profits may vary.

To maximize profitability, arcade owners should focus on factors that can positively impact the business. Continuous improvement of services, product offerings, and customer relationships are essential. By providing a memorable gaming experience, maintaining a diverse selection of games, and fostering strong customer relationships, arcade businesses can attract and retain loyal customers, ultimately leading to higher profits ( Fin Models Lab ).

One notable success story in the arcade industry is Dave & Buster’s, which strategically locates its venues in high-traffic areas, offers a variety of games, food and drink options, and regularly introduces new games and promotions to keep customers engaged. By studying successful arcade businesses like Dave & Buster’s, aspiring arcade owners can gain valuable insights into building a successful arcade business model.

Starting an arcade business requires careful planning, a solid business plan , and a thorough understanding of the target market. With the right strategies in place, owning and operating an arcade can be a lucrative venture that combines your passion for gaming with entrepreneurial success.

Building a Successful Arcade Business Model

Creating a successful arcade business requires careful planning and consideration of various factors that contribute to profitability. By understanding these factors and learning from successful examples, such as Dave & Buster’s, arcade owners can develop a solid business model that maximizes their chances of success.

Factors for Profitability

Several factors play a crucial role in the profitability of an arcade business. Continuous improvement of services, product offerings, and customer relationships are essential aspects to focus on. It’s important to regularly update and diversify the game selection to cater to the evolving preferences of gamers. Additionally, providing a memorable and engaging experience for customers through exceptional customer service and a welcoming atmosphere can contribute to repeat business and positive word-of-mouth recommendations.

To ensure long-term success, effective management and financial savvy are necessary. Monitoring the performance of the arcade, optimizing operational costs, and implementing efficient marketing strategies are vital for sustained profitability. By analyzing financial data, arcade owners can make informed decisions and identify areas of improvement to maximize revenue and minimize expenses.

Case Study: Dave & Buster’s Success

Dave & Buster’s is often cited as an exemplary model of a successful arcade business. Their strategy revolves around strategic location choices, diverse game offerings, and the combination of food and drink options with gaming experiences. By situating their venues in high-traffic areas, they attract a steady flow of customers and benefit from increased visibility and accessibility.

One of the key strengths of Dave & Buster’s is their ability to adapt to changing trends and consumer preferences. They regularly introduce new games and promotions to keep customers engaged and excited about visiting their establishments. This commitment to innovation helps them maintain a competitive edge in the industry.

Another aspect that contributes to their success is the integration of dining and entertainment. By offering a full-service restaurant and bar alongside their arcade games, they provide a comprehensive entertainment experience that appeals to a wide range of customers.

By studying the success of Dave & Buster’s, arcade owners can gain insights into effective strategies for creating a thriving business. Implementing similar tactics, such as strategic location choices, diverse game offerings, and a focus on customer satisfaction, can help increase the chances of success in the arcade industry.

In conclusion, building a successful arcade business model requires considering factors that contribute to profitability and learning from successful examples like Dave & Buster’s. By continuously improving services, diversifying game offerings, and focusing on customer relationships, arcade owners can create a thriving business. Additionally, strategic location choices and the integration of dining and entertainment can further enhance the arcade experience. With careful planning, effective management, and a commitment to providing an exceptional customer experience, entrepreneurs can lay the foundation for a profitable arcade business.

Costs and Expenses in Operating an Arcade Business

Running an arcade business requires careful consideration of various costs and expenses. Understanding these financial aspects is essential for creating a sustainable and profitable arcade business model. Let’s explore three key cost factors: rent and location costs, electricity and equipment maintenance, and supplies and inventory expenses.

Rent and Location Costs

When establishing an arcade business, one of the significant expenses is the cost of rent and location. The average rent for a 2,000 square feet arcade business ranges from $4,000 to $7,000 per month ( Source ). The specific location and its desirability can significantly impact the rent price.

Choosing the right location is crucial for the success of an arcade business. High foot traffic areas, such as shopping malls or popular entertainment districts, tend to attract more customers. However, these prime locations often come with higher rental costs. Evaluating the potential customer base and competition in the area can help determine the optimal location for your arcade business.

Electricity and Equipment Maintenance

Another significant cost for operating an arcade business is electricity and equipment maintenance. Arcade centers require a substantial amount of electricity to power the gaming machines, lighting, air conditioning, and other electrical equipment. On average, monthly electricity bills for arcade businesses range from $400 to $1,000, depending on the size of the arcade and the equipment used ( Source ).

Regular equipment maintenance is essential to ensure the smooth operation and longevity of the gaming machines. The average annual cost of maintaining arcade equipment is approximately $4,500, which can vary based on the size and complexity of the arcade center ( Source ). Proper maintenance helps prevent breakdowns and extends the lifespan of the machines, reducing the need for costly repairs or replacements.

Supplies and Inventory Expenses

Supplies and inventory expenses are an integral part of operating an arcade business. These expenses cover items like tokens, tickets, prizes, cleaning supplies, and other consumables. The average cost of supplies and inventory for an arcade business generating between 1 to 5 million USD in revenue per year is approximately $5,307 annually ( Source ). The specific costs can vary depending on the size of the arcade, customer demand, and the pricing strategy implemented.

Managing inventory efficiently is crucial to minimize waste and maximize profits. Regular inventory checks and analysis can help identify popular games and products, allowing for better stocking decisions. Additionally, negotiating favorable pricing and establishing relationships with suppliers can help reduce overall supply costs.

By carefully considering and managing these costs, arcade business owners can create a solid financial foundation for their operations. It is essential to regularly monitor and adjust these expenses to ensure the long-term profitability and success of the arcade business.

For more information on how to start and operate an arcade business, refer to our guide on how to start an arcade business .

Promoting Your Arcade Business

To ensure the success of your arcade business, effective marketing strategies are crucial. Promoting your arcade not only helps attract customers but also creates a unique brand identity that sets you apart from the competition. In this section, we will explore the importance of marketing for arcades, choosing the right location, and effective promotion strategies.

Importance of Marketing for Arcades

Marketing plays a vital role in building awareness and generating excitement for your arcade business. It’s about creating an atmosphere that resonates with the joyous echoes of the past while showcasing the thrilling advancements of modern entertainment. To enthrall patrons, it’s essential to craft a brand that stands out with its vibrant visuals and magnetic personality.

One effective way to market your arcade is by cultivating a loyal customer base through immersive experiences. Themed nights, tournaments, and loyalty programs can transform first-time visitors into regulars. By providing an experience that goes beyond just gameplay, you can create a lasting connection with your audience.

Utilizing social media platforms like Instagram and Twitter can be a powerful tool in marketing your arcade. Consistently posting engaging content and utilizing relevant hashtags can help you reach a wider audience and keep your current followers engaged. Sharing images and stories from the golden days of arcades can tap into nostalgia, encouraging your customers to share their own childhood memories at your venue.

Choosing the Right Location

When choosing a location for your arcade, it’s important to consider factors that will drive foot traffic and attract your target audience. Look for areas with high visibility and accessibility, such as shopping centers, entertainment districts, or areas near colleges and universities. A strategic location can increase the chances of attracting both casual gamers and dedicated enthusiasts.

Additionally, consider building relationships with local businesses in your area. Cross-promotions, such as joint discounts with a nearby restaurant or collaborations with a local movie theater, can benefit both parties by expanding customer bases and providing patrons with additional value. These partnerships can help generate buzz and attract a wider range of customers to your arcade.

Effective Promotion Strategies

To effectively promote your arcade, it’s important to utilize a combination of online and offline marketing channels. Consider the following strategies:

High-Impact Visuals: Use professional graphic design tools like Desygner to create eye-catching promotional materials. Utilize vibrant colors, engaging imagery, and clear messaging to leave a lasting impression on potential customers.

Social Media Campaigns: Leverage the power of social media platforms to engage with your audience and share updates about your arcade. Consistently post content, including images, videos, and announcements, to keep your followers engaged. Encourage user-generated content by creating hashtags and encouraging customers to share their experiences at your arcade.

Nostalgia Marketing: Tap into the nostalgia associated with arcades by sharing content and stories from the golden age of gaming. This can resonate with both older generations who have fond memories of arcades and younger audiences interested in experiencing the retro gaming culture.

Partnerships and Collaborations: Forge partnerships with local businesses that align with your target audience. Collaborate on joint marketing initiatives, cross-promotions, or special events to expand your reach and attract new customers.

By implementing these promotion strategies and creating a unique and engaging experience, you can effectively market your arcade business and establish a strong presence in the gaming community. Remember, marketing is an ongoing process, so continue to monitor the results of your efforts and adapt your strategies as needed to maximize success.

The Evolving Gaming Industry

The gaming industry has undergone significant transformations in recent years, driven by technological advancements and shifting consumer preferences. These changes have presented both challenges and opportunities for arcade businesses. Let’s explore the key aspects of this evolving landscape.

Technological Advancements in Gaming

Technological advancements have revolutionized the gaming industry, expanding its scope beyond entertainment. Video games now serve educational, competitive, and creative purposes ( Typeset ). With the advent of virtual reality (VR), augmented reality (AR), and cloud gaming, players can immerse themselves in virtual worlds and enjoy seamless gaming experiences.

The rise of mobile gaming has also played a significant role in the industry’s evolution. Smartphones and tablets have become powerful gaming devices, allowing gamers to play on the go. The accessibility and convenience of mobile gaming have attracted a massive audience, influencing consumer preferences.

Shifting Consumer Preferences

Consumer preferences within the gaming industry have undergone a substantial shift. There has been a move towards on-demand gaming, where players can access a vast library of games without the need to physically own them ( Typeset ). This has impacted the traditional model of queuing up for game releases and purchasing physical copies.

Additionally, there has been a rise in indie game development and artist-led distribution. Small game developers now have the opportunity to create and distribute games independently, thanks to digital platforms and online marketplaces. However, this shift has also posed challenges for smaller developers, as they face intense competition and risk being overshadowed by larger studios.

Challenges and Opportunities for Arcade Businesses

Arcade businesses have had to adapt to the changing gaming landscape. The widespread availability of gaming consoles, PCs, and mobile devices has reduced the demand for traditional arcades. To remain relevant, arcade businesses have embraced new technologies such as VR and AR, offering immersive gaming experiences that cannot be replicated at home.

Arcades are also capitalizing on the growing popularity of esports and competitive gaming. By hosting esports tournaments and providing a social space for gamers to connect and compete, arcades can attract a dedicated audience. This creates opportunities for partnerships with game developers, sponsors, and advertisers, generating revenue beyond traditional arcade gaming.

While the challenges are evident, there are still opportunities for arcade businesses to thrive. The global arcade games machine market is projected to witness continued expansion due to the increasing demand for innovative and sustainable products ( LinkedIn ). Market players are advised to invest in research and development, forge strategic partnerships, and align their offerings with evolving consumer preferences to capitalize on the opportunities presented by the arcade games machine market ( LinkedIn ).

By adapting to the changing gaming industry, arcade businesses can position themselves as unique entertainment destinations, offering experiences that cannot be replicated at home. Providing a mix of traditional arcade games, cutting-edge technologies, and opportunities for social interaction, arcades can continue to engage gamers and thrive in this evolving landscape.

Revenue Streams in the Gaming Industry

The gaming industry is a lucrative market that offers various revenue streams for businesses, including arcade owners. Understanding the different revenue streams can help arcade owners develop a successful business model. In this section, we will explore the overview of gaming market revenue, in-game purchases and subscriptions, and advertising and esports as potential revenue streams for arcade businesses.

Overview of Gaming Market Revenue

The gaming industry is a thriving market that generates substantial revenue. In 2020, the global video game market was valued at $159.3 billion, with digital game sales accounting for 91% of that revenue. This emphasizes the significance of game sales in the gaming industry ( LinkedIn ).

Gaming Market Segment	Revenue (2020)
Mobile Gaming	$77.2 billion
PC Gaming	$37.4 billion
Console Gaming	$45.2 billion

In-Game Purchases and Subscriptions

In-game purchases have become a major revenue source in the gaming industry. In 2020, in-game purchases accounted for a staggering $78.7 billion in revenue. Players often purchase additional content, such as cosmetic items, virtual currency, or expansion packs, to enhance their gaming experience. This trend highlights the substantial income stream derived from in-game purchases ( LinkedIn ).

Subscription-based services have also gained popularity in the gaming industry. Offerings like Xbox Game Pass and PlayStation Now have contributed to the growth of the global gaming subscription market, which was valued at $2.5 billion in 2020. It is expected to reach $7.9 billion by 2026. Subscriptions provide players with access to a wide range of games, offering a steady revenue stream for gaming companies ( LinkedIn ).

Advertising and Esports

Advertising plays a crucial role in generating revenue within the gaming industry. In 2020, the global gaming advertising market was valued at $3.3 billion. Mobile gaming accounted for 78% of that revenue, indicating the significance of advertising in this sector. Advertisements can be integrated into games through various formats, including video ads, display ads, and sponsored content. This provides opportunities for arcade businesses to collaborate with advertisers and generate additional revenue streams ( LinkedIn ).

Esports, competitive video gaming, has emerged as a thriving industry within the gaming market. In 2020, the global esports market was valued at $1.08 billion, with revenues expected to reach $1.62 billion by 2024. Esports generates revenue through various means, such as sponsorship deals, media rights, ticket sales, and merchandise. Arcade businesses can tap into the esports sector by hosting esports events or partnering with esports organizations, providing opportunities for additional revenue streams ( LinkedIn ).

By capitalizing on the revenue streams available in the gaming industry, arcade businesses can diversify their income sources and increase their profitability. Incorporating in-game purchases, subscriptions, advertising collaborations, and esports events can help arcade owners build a sustainable and successful business model.

How to Market Your Arcade Business

When it comes to marketing your arcade business, it’s crucial to create an engaging experience that captures the attention of gamers and gaming enthusiasts. By combining nostalgia with modern strategies, you can build a strong brand and attract a diverse audience. Here are some effective marketing approaches to consider:

Creating an Engaging Experience

To cultivate a loyal customer base, it’s important to offer an arcade experience that goes beyond just gameplay. Immersive themed nights, tournaments, and loyalty programs can transform first-time visitors into regulars. By providing unique and memorable experiences, you can create a sense of excitement and anticipation that keeps people coming back for more.

In addition, focus on the visual appeal of your arcade. High-impact visuals are paramount in capturing attention and generating interest. Utilize tools like Desygner to create professional and visually appealing promotional materials that showcase the vibrant atmosphere of your arcade.

Nostalgia and Social Media Campaigns

Nostalgia is a powerful emotion and can play a critical role in marketing your arcade business. Tap into the nostalgia of gamers by sharing images and stories from the golden days of arcades. Encourage your customers to share their own childhood memories at your venue, creating a sense of community and connection.

Social media platforms such as Instagram and Twitter are invaluable tools for marketing any business, including arcades. Consistently posting engaging content that showcases the unique features and events of your arcade can keep your audience hooked. Use relevant hashtags to join broader conversations and reach potential visitors who may not yet be following you. For more insights on utilizing social media, check out our article on arcade business ideas .

Partnering with Local Businesses

Building relationships with other businesses in your area is a clever tactic when exploring how to market your arcade effectively. Consider cross-promotions, such as offering a meal deal with a nearby restaurant or joint discounts with a local movie theater. Such partnerships benefit both parties by expanding customer bases while providing patrons with additional value.

Moreover, engaging with the local community through events and collaborations can turn your arcade into a buzzing focal point. By hosting gaming tournaments, participating in local festivals, or sponsoring gaming-related charity events, you can generate positive buzz and establish your arcade as a vibrant destination.

Remember, marketing your arcade business requires a combination of nostalgia, engaging experiences, and cutting-edge appeal. Craft a brand that stands out with its vibrant visuals and magnetic personality. By creating an immersive and exciting environment, while leveraging the power of social media and local partnerships, you can attract a diverse audience of gaming aficionados who will keep coming back for more gaming thrills.

Costs of Owning and Maintaining Arcade Games

When considering starting an arcade business, it’s important to understand the costs associated with owning and maintaining arcade games. These costs can impact the profitability and success of your arcade venture. In this section, we will explore the expenses related to purchasing arcade games, the cost to play arcade games, and the annual maintenance expenses.

Purchasing Arcade Games

The cost to own an arcade game can vary widely depending on factors such as age, rarity, condition, and demand. On average, arcade games can cost anywhere from a few hundred dollars to several thousand dollars to purchase. The pricing is influenced by various factors, including the popularity of the game, its condition, and its features. It’s essential to conduct thorough research and consider your budget and target audience when selecting arcade games for your business.

Cost to Play Arcade Games

The cost to play an arcade game can vary depending on the game and the location of the arcade. Traditionally, arcade games have been known for their relatively low cost per play, with pricing ranging from 25 cents to a few dollars per play. However, it’s important to consider the pricing strategy that aligns with your business goals and customer expectations. By analyzing the local market and understanding the preferences of your target audience, you can determine the most suitable pricing for your arcade games.

Annual Maintenance Expenses

Arcade businesses incur annual maintenance costs to ensure that the games are in optimal working condition. The maintenance costs can vary depending on factors such as the age, condition, and complexity of the games. Routine maintenance tasks may include cleaning, replacing parts, and repairing any issues that arise. While some maintenance tasks can be performed by arcade staff, it may be necessary to hire professionals for major repairs or technical support. It’s important to budget for annual maintenance expenses to keep your arcade games running smoothly and to provide an enjoyable experience for your customers.

To give you a rough idea of the costs involved, building a custom arcade machine could range from $300 for a basic setup to $30,000 for a deluxe machine with various features ( Quora ). Additionally, traditional arcade machines and pinball machines have varying costs based on factors such as machine type, components, display quality, seating options, and popularity. It’s essential to consider these costs when planning your arcade business and factor them into your financial projections.

By understanding the costs associated with owning and maintaining arcade games, you can make informed decisions about the games to include in your arcade and plan your budget accordingly. Properly managing these costs will contribute to the long-term success and profitability of your arcade business.

Building Custom Arcade Machines

For those looking to add a unique touch to their arcade business, building custom arcade machines can be an exciting endeavor. These machines can be tailored to specific themes, designs, and gameplay experiences, offering a one-of-a-kind attraction for gamers. Let’s explore the factors that affect the cost of building custom arcade machines and the options available for traditional arcade machines and pinball machines.

Factors Affecting the Cost

The cost of building custom arcade machines can vary significantly depending on several factors. Some of the key factors that influence the cost include:

Design and Complexity : The complexity of the design and features incorporated into the custom arcade machine can greatly impact the cost. Intricate designs, special effects, and unique gameplay mechanics may require additional resources and expertise, potentially increasing the overall cost.

Components and Materials : The quality and type of components and materials used in the construction of the custom arcade machine can affect the cost. Higher-end components and materials may come at a premium price, but they can enhance the durability, performance, and aesthetics of the machine.

Accessories and Add-ons : Additional accessories and add-ons, such as specialized controllers, light guns, spinners, or driving controls, can contribute to the overall cost. These accessories can enhance the gameplay experience and make the custom arcade machine more appealing to gamers.

Labor and Expertise : The expertise and labor required to build the custom arcade machine can impact the cost. Skilled professionals with experience in arcade machine construction may charge higher fees, but their expertise can ensure a high-quality, functional, and visually appealing final product.

Traditional Arcade Machines and Pinball Machines

In addition to custom arcade machines, traditional arcade machines and pinball machines are popular options for arcade businesses. The cost of traditional arcade machines and pinball machines can vary depending on several factors such as machine type, components, display quality, seating options, and popularity.

For example, classic arcade machines like Tekken 3 may cost around $3000, while sit-down versions of games like Star Wars Trilogy could be priced at around $4500. Modern pinball machines like Deadpool can range from $7000 to $15,000 depending on the specific features, licensing, and demand.

When considering traditional arcade machines or pinball machines, it’s essential to factor in ongoing maintenance costs. The average cost of maintaining arcade equipment is $4,500 annually, which includes expenses for repairs, parts replacement, and general upkeep ( Source ). It’s important to budget for these costs to ensure the longevity and optimal performance of the machines.

By carefully considering the factors that affect the cost and exploring options for traditional arcade machines, pinball machines, or custom-built machines, arcade business owners can create an enticing and diverse gaming experience for their customers. Whether it’s a custom creation or a classic favorite, investing in high-quality arcade machines can attract gamers and contribute to the success of the arcade business.

Running an arcade business involves various costs and expenses that need to be carefully managed to ensure profitability. From rent and location costs to electricity and equipment maintenance, understanding these expenses is crucial for building a successful arcade business model.

The cost of rent and the location of your arcade business play a significant role in its success. The average rent for a 2,000 square foot arcade business ranges from $4,000 to $7,000 per month, depending on the area and local market conditions ( Source ). Choosing the right location is crucial as it determines the foot traffic and target audience that your arcade can attract. Ideal locations include bustling downtown areas, shopping centers, cinemas, residential areas, and famous tourist sites ( Neofuns ).

Operating arcade games requires a considerable amount of electricity, which adds to the operational costs. On average, monthly electricity bills for arcade businesses range from $400 to $1,000, depending on the size of the arcade and the equipment used. It’s important to consider energy-efficient options and regularly maintain the equipment to minimize energy consumption and ensure optimal performance.

Additionally, arcade games require regular maintenance to keep them in good working condition and extend their lifespan. The average cost of maintaining arcade equipment is around $4,500 annually, depending on the size and complexity of the arcade center ( Source ). Building a maintenance schedule and budgeting for repairs and replacements will help keep your arcade games running smoothly.

To provide an enjoyable gaming experience for your customers, it’s essential to keep your arcade stocked with supplies and maintain an inventory of game tokens, tickets, prizes, and other necessary items. The average cost of supplies and inventory for an arcade business generating between 1 to 5 million USD in revenue per year is approximately $5,307 annually. Accurately tracking inventory, optimizing procurement processes, and negotiating favorable deals with suppliers can help manage these expenses effectively.

Understanding the costs and expenses involved in operating an arcade business is crucial for building a sustainable and profitable business model. By carefully managing rent and location costs, electricity and equipment maintenance expenses, and supplies and inventory costs, you can ensure the financial health of your arcade business.

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Sample Arcade Business Plan

Arcade business plan sample.

If you wish to start an arcade business, you’ll need a plan.

Your business plan will serve as a blueprint towards the actualization of the idea, and too often, people face difficulties drafting one. In other words, coming up with a gaming business plan isn’t as easy as it sounds.

In reality, knowing what needs to be included in the plan and how to develop each of the sections is where a lot of people fail. This arcade Business Plan provides critical guidance to entrepreneurs facing such difficulty.

With this, you’re able to follow and understand how you should develop your business plan.

The Key Sections you can’t do without

Writing a great plan requires understanding what needs to be included.

Also, it must follow a basic pattern or structure. In other words, certain components are critical to the outcomes obtained. These include the executive summary, company description, as well as the products & services.

Other components of a good plan include market analysis, strategy & implementation, organization & management team, as well as financial plan & projections.

With these mentioned, you’ll have to know how each section needs to be developed or what needs to be included. Detailed examples are provided below;

i. Executive Summary

Arguably the most important section of your arcade business plan, the executive summary condenses the entire document into a mini plan.

In other words, it gives a highly summarized version of the plan to allow for easier and faster comprehension of what’s in the main plan.

This is important because investors will require an easily digestible version of the plan that highlights the key sections needed to determine its viability.

Also, you want to keep your audience interested and glued to the plan. Ultimately, you want them to seek further details about the business.

Nothing interests investors like a game business idea that sounds viable.

Although the executive summary briefly discusses all the other sections, additional details are provided such as the business name & location, the products & services, mission & vision statements, as well as the specific purpose of the plTo introduce cing your arcade business to your audience, you’ll have to state its an.

It would be best if you explored all the procedures involved in choosing a great name.

As mentioned above, the location of the business also matters. This helps tell your audience how its location will likely impact on sales.

What services or products does your arcade business provide? Every business is established to provide a service or a product and yours shouldn’t be any different.

Here, provide a rundown of services without getting into too much specifics as there’s a whole section for that in the main body of the plan.

Your executive summary section won’t be complete without the mission and vision statement.

The mission statement captures the essence of your business’s goals as well as stating the purpose it serves. It basically tells the world why the business exists.

The vision statement on the other hand gives a clear and definitive description of your business’s aspirations. This is in addition to the kind of impact it aims to create.

It should be inspiring enough to keep your workforce motivated towards attaining the bigger goal.

What’s the specific purpose of your arcade business plan?

This is one area you’ll need to clarify to your readers. By stating the specific purpose, a clear understanding of why you take the actions you take is had.

ii. Company Description

Company description covers a lot of key details about how the company operates.

Here, several aspects are covered such as a summary of short and long term business goals, as well as its legal structure. Your company description should also clearly state how you intend to make a profit as a business.

Provide a brief history about your operations (for existing or established arcade businesses), in addition to the nature of business as well as the demands or needs you intend to meet.

You’ll also have to include a summary of company growth with financial or market highlights added.

iii. Products & Services

The details you earlier left out about your services and products in the executive summary section need to be provided in more detail here.

Also important is the service or product costs, the expected net revenue from sale of products and services, as well as the benefits derived by customers.

Information on services and products still in the research and development stages will also need to be provided. What’s the market role of your products or services?

Plus what clear advantages do they have over those from your competitors? If there are any relevant trade secrets, patens, or copyright, you should add them here.

iv. Market Analysis

Under the market analysis section, you want to demonstrate your understanding of the industry to your audience.

This requires carrying out a ton of research activities which involves a lot of wYou’llou’ll need to provide a sketch of target customer segments with size and demography to demonstrate such knowledgephics.

Identify your competitors and give a detailed assessment of their weaknesses and strengths. Also, a historical current and projected marketing data for your arcade services and products need to be included.

Give an industry description and outlook with supporting statistics.

v. Strategy & Implementation

The sales and marketing strategies adopted for your arcade business need to be summarized and implemented with the help of an operating plan.

This should contain a clear explanation of how you intend to promote your business to your client and plan to enter the market.

Also, how will your business function? Give information on pricing, costs, and promotions as well. What more? You’ll have to include information on your sources of labor and the number of employees you’ll be hiring.

vi. Organization & Management Your Arcade Business

The organization and management ness are crucial to its success. You’ll need to present an organizational chart with departments and critical emplo to your audiences.

Give a profile of the owner, the management team, and advisors.

vii. Financial Plan & Projections

The financial plan requires the input of a professional in working out key financial statements.

These include historical financial data, realistic prospective financial information, as well as a brief analysis of your financial data.

With all of these points added to your arcade business plan, it should be ready for use and can be presented to investors or used for strategy purposes.

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How to Start an Arcade for Entrepreneurs

5 Minute Read

Does the sound of a pinball machine make your ears perk? What about the excitement of players competing against each other to win a game? If you answered ‘yes’ to these questions, you might be thinking about how to start an arcade and what steps to take to become and remain a success. Well, the answer might surprise you. 

Starting an arcade is great for an entrepreneur looking for something new and exciting, and it could become very profitable if it is a success. However, running an arcade differs daily with all the experiences and attractions you can add to a location. 

Be sure to continue reading for our guide on steps and tips you need to know when starting an arcade. 

Step 1: Create a Business Plan

If you’re serious about opening an arcade , you must develop a business plan to help you get started. A business plan is essential in setting your goals and ideas to ensure success.

You’ll need to figure out your business finances and see the best ways to get funding for your project. In addition, what other attractions will you have? Do you envision your location as a more miniature classic/old-school style arcade or a large family entertainment center that might include a full restaurant with a bowling alley, laser tag, and other prominent attractions? These are crucial decisions to consider when building out your business plan.

If you don’t already have a location in mind, start brainstorming ideas for your arcade. That way, you will know the rent prices and can include them in your business plan and budget. 

It would help if you also outlined how to get business licenses and permits within your business plan. While arcades are not gambling, you must obtain the correct permits so your business can run legally.  

Step 2: Navigating the Permit Puzzle: Key Licenses for Your Arcade Dream

Opening an arcade is an exciting journey, but before the joysticks start singing, you must navigate the sometimes-daunting realm of permits and licenses. Don’t worry; it’s less of a maze and more like a well-organized treasure hunt! Here’s a compass to guide you:

Local Licenses:

• Business License:  Every arcade needs a basic business license from your city or county. It’s the foundation upon which you build your operation.
• Zoning Permits:  Ensure your chosen location allows arcades through proper zoning permits. This avoids surprises down the line.
• Building Codes and Inspections:  Ensure your premises meet all safety and accessibility regulations. Building inspections will greenlight your operations.
• Specific Activity Permits:  Depending on your offerings, you might need additional permits for equipment like pool tables, laser tag arenas, or food and beverage service.

State and Federal Requirements:

• Employer Identification Number (EIN):  Register your business with the IRS by obtaining an EIN. This unique number simplifies tax filing and opens doors to business accounts.
• State Sales Tax Permit:  Most states require you to collect and remit sales tax. Obtaining a sales tax permit ensures compliance and avoids future headaches.
• Alcohol and Food Permits:  If you plan to serve alcohol or food, you will need additional permits and inspections from relevant state and local agencies.

Beyond the Paperwork:

• Research Your State and City:  Regulations differ, so delve into your specific state and city requirements. Online resources and local business advisors can help you navigate the specifics.
• Start Early:  Don’t wait until opening day! Obtaining permits and licenses can take time, so start early to avoid delays.
• Embrace the Teamwork:  Don’t hesitate to seek help from professionals familiar with your local landscape. Accountants, lawyers, and business consultants can ease the process.

Remember, getting the proper permits and licenses isn’t just about checking boxes; it’s about protecting your business and ensuring the safety and enjoyment of your customers. By investing time and effort upfront, you’ll ensure your arcade can focus on what it does best – creating unforgettable experiences for players of all ages!

So, grab your metaphorical permit compass, research your local treasure map, and embark on the rewarding journey of bringing your arcade dream to life!

Step 3: Find the Coolest Arcade Games and Machines that Fit with Your Type of Location

After you’ve done all the work to outline your business goals, you get to do the fun part of choosing the equipment. Of course, your arcade won’t be any fun without unique arcade games and machines. Be sure to look for  new releases , classics, or even  VR arcade games  to stock your arcade. You can even try it before you buy it. Numerous amusement t rade shows and expos worldwide allow operators and owners to get exclusive sneak peeks at the latest games and play them before investing in them.

You have some options when it comes to buying arcade equipment. You can choose between buying new equipment, investing in used arcade equipment, or looking for the ’80s or ’90s classic arcade machines. There has been a trend toward creating classic arcades to take advantage of childhood nostalgia – be aware of everything that goes into keeping older machines up and running, like finding parts and technicians specializing in fixing those machines. There is a community that loves to work on these machines and bring them back to life; if that’s your passion, go for it. However, newer titles would make more sense if you focus more on business.

Having the right mix of games is essential to ensuring profitability. There are three basic categories of typical arcade games, with many more subcategories: Video Games, Redemption Games , and Merchandisers. Allocating a percentage of your space to specific types is necessary for the decision-making process. Check out our post on the different  types of arcade games  for a more detailed analysis.

Step 4: Research Your Competition

Business in this sector is competitive, so make sure you find who the competitors within your area are and what makes them stand out or what they might lack. One of your first goals should be to research their arcades and see how they’re operating and what their assortment is. By analyzing the competition, you can find the best way to attract your target market. For example, you might find that you can improve the arcade lineup and bring in more clients than your competition. 

• Local Landscape:  Identify all arcades within your target catchment area. Big chains, independent gems, even bowling alleys with arcade sections – map them all.
• Target Audience Focus:  Do you understand your ideal customers—families, teens, and esports enthusiasts? Analyze competitor offerings from their perspective.

Dive Deep into Operations:

• Game Assortment:  What games do they offer? Are they cutting-edge titles, retro classics, or a mix? Analyze their variety, popularity, and pricing structure.
• Ambiance and Experience:  Observe their atmosphere. Is it family-friendly, edgy, or focused on esports ? How do they manage crowds and maintain cleanliness?
• Pricing and Packages:  Analyze their pricing strategies for individual games, hourly rates, and special packages. Consider offering competitive or unique options.

Identify Strengths and Weaknesses:

• Competitive Advantages:  What makes specific competitors stand out? Unique game selections, innovative themes, exceptional customer service? Identify their winning formulas.
• Vulnerable Gaps:  Find areas where they lack. Limited game variety, outdated equipment, poor service, inconvenient location? These are your potential entry points.

Remember, competitive research is not about copying or undercutting – it’s about understanding the market, identifying opportunities, and crafting a unique arcade experience that resonates with your target audience. By wielding this intel strategically, you’ll turn competition into inspiration, paving the way for your arcade to dominate the scene and light up your customers’ lives.

So, grab your notebook, sharpen your detective skills, and embark on the thrilling quest of competitive research. Your arcade empire awaits!

Arcade Business Profit

How profitable are arcade games.

How much does it cost to purchase arcade games , and how much profit can you expect to make? How many games can I fit in my location? Here, you’ll find some basic industry averages to help set your expectations, but you must understand your specific needs and market.

Average Per Game Budget: $12,000-$15,000 *

Big-time titles and extreme games are more expensive, causing the average price per game to increase. This number is based on a brand new, full redemption arcade. Costs can be reduced to fit the project’s budget using used games. Also, choosing the extremes carefully can help meet the budget requirements.

Average Per Game Revenue: $250/Week *

This is based on a facility achieving average expected volume. Many arcades do far better than industry averages due to higher volume. Average also assumes the facility has committed significantly to family entertainment, with a current game mix and keeping up with prize trends.

Average Per Game Space Allocation: 70 Square Feet *

Extreme games are becoming more prevalent, causing the square footage for games to increase while decreasing the overall game count.

Getting started with equipment can be a financial hurdle, so check out  financing and leasing  options and consider how  used arcade games  can help you jump-start your business.

Opening an Arcade in Your Area

An arcade is a great way to go if you’re trying to develop a business opportunity to bring enjoyment and fun to your community. This has been a basic outline for starting an arcade. If you have any questions or want help getting started, Betson has team members who know the industry inside and out and can help you with the layout & design of your floor plan, game room mix, and more.

Sign up for our  newsletter  to be the first to hear about new releases, product promotions, updates, and more!

*Estimates may vary.

How to Craft a Winning Business Plan for a VR Arcade Gaming Venture

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Welcome to our blog post on How To Write a Business Plan for Virtual Reality Arcade Gaming in 9 Steps: Checklist. Are you interested in the booming virtual reality arcade gaming industry? According to recent statistics, the global virtual reality gaming market is projected to reach a value of $45.09 billion by 2027, with a compound annual growth rate (CAGR) of 30.2%. With such promising growth potential, now is the perfect time to dive into this exciting business opportunity.

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Before embarking on your journey to create a successful virtual reality arcade gaming center, it’s crucial to lay a strong foundation. To ensure your business thrives in this competitive market, researching the market and understanding your target audience is paramount. Identify the demographics of gamers who would be interested in visiting your arcade, and tailor your offering accordingly.

To stay ahead of the competition, analyze and study your competitors . Understand their strengths and weaknesses, and find ways to differentiate your arcade from theirs. This will help you develop a unique selling proposition and carve out a niche for your business in the market.

Securing potential sources of funding is another crucial step in launching your VR arcade. Create a comprehensive business plan that highlights the profitability of your venture and convinces potential investors or lenders to invest in your business.

Now, let’s focus on defining your business concept and unique selling proposition . Determine what sets your arcade apart from others and how you will provide an immersive and thrilling experience to customers. This will help you attract and retain a loyal customer base.

Before going all-in, it’s important to conduct a feasibility study to assess the viability of your business idea. Evaluate factors such as market demand, competition, location, and technology requirements to ensure your arcade has a high chance of success.

To create an accurate financial forecast and determine your business’s profitability, it’s essential to determine the cost and revenue projections . Consider factors such as equipment costs, rent, utilities, and employee wages in your projections.

Once you have a solid business plan in place, it’s time to develop a comprehensive marketing strategy . Outline how you will attract and engage customers, whether through social media marketing, partnerships, or targeted advertising campaigns.

An operational plan is crucial to ensure smooth day-to-day operations of your VR arcade. Consider factors such as staffing, facility management, customer service, and game maintenance when creating a detailed operational plan .

Finally, it’s time to establish a financial plan . Determine your startup costs, projected revenue streams, and cash flow forecast. This will ensure you have a clear financial roadmap for your business.

By following these 9 steps in writing a business plan for your virtual reality arcade gaming center, you are well on your way to creating an immersive and thrilling experience for gamers. Harness the potential of this rapidly growing industry, and make your mark in the world of virtual reality gaming!

Research The Market And Target Audience

When starting a virtual reality arcade gaming center, it is crucial to thoroughly research the market and identify your target audience. Understanding the market will help you determine the demand for VR arcade gaming in your area and gauge the competition you may face. It is important to analyze the demographics, interests, and preferences of potential customers .

Tips for researching the market and target audience:

• Utilize online surveys, focus groups, and interviews to gather insights from your target audience.
• Identify the age range, gender, and other demographic factors that will play a role in shaping your marketing strategies.
• Take into consideration the current trends and developments in the gaming industry, particularly in the virtual reality sector.
• Study the geographic location and determine if there is a sufficient population density to support a VR arcade gaming center.
• Look into any existing VR arcades in the area and assess their business models and customer reviews.

By conducting thorough market research and understanding your target audience, you will be able to develop a business plan that caters to their needs and preferences. This will enable you to create compelling marketing strategies and offer immersive experiences that differentiate your VR arcade gaming center from the competition.

Virtual Reality Arcade Gaming Financial Model Get Template

Analyze The Competitors

In order to successfully launch a Virtual Reality Arcade Gaming center, it is crucial to analyze the competition in the market. By understanding what other similar businesses are offering, you can identify gaps in the market and determine how to differentiate your arcade from competitors.

Research other Virtual Reality Arcades: Start by researching existing Virtual Reality Arcade Gaming centers in your target area. Find out what types of games and experiences they offer, their pricing structure, and any unique features they have. This will help you assess their strengths and weaknesses, and identify opportunities for improvement.

Identify key competitors: Make a list of the top competitors in your area, including both Virtual Reality Arcades and other entertainment venues that offer virtual reality experiences or gaming. Look for businesses that attract a similar customer base and offer comparable experiences. This will give you a clear picture of who you will be competing against in the market.

Compare pricing and services: Analyze the pricing models of your competitors to understand how much they charge for gaming sessions or experiences. Take note of any additional services they provide, such as party packages or VR tournaments. This will help you determine how to price your own services competitively and offer unique value to your customers.

• Visit competitor locations: Experience the gameplay and atmosphere at other Virtual Reality Arcades to get a first-hand understanding of what they offer. Take note of the overall customer experience, including the quality of VR equipment, cleanliness of the facility, and level of customer service.
• Read customer reviews: Look for online reviews and testimonials about your competitors to gain insights into their strengths and weaknesses. Pay attention to recurring themes or complaints to ensure you can address those areas in your own business.
• Identify unique selling points: Identify what sets your competitors apart from one another and how they differentiate themselves in the market. This will help you develop your own unique selling proposition and stand out from the competition.

By thoroughly analyzing your competitors, you can gain valuable insights into the industry, learn from their successes and failures, and ultimately refine your own business strategy to position yourself as a leader in the Virtual Reality Arcade Gaming market.

Identify Potential Sources Of Funding

Securing funding for your virtual reality arcade gaming center is a crucial step in turning your business idea into a reality. Here are some steps to help you identify potential sources of funding:

• Personal Savings and Investments: Consider using your personal savings or investments as a starting point to fund your VR arcade. This demonstrates your commitment and dedication to the business, which can be attractive to potential investors or lenders.
• Friends and Family: Approach friends and family members who believe in your business idea and may be willing to invest either as a loan or as a capital contribution. Ensure that you establish clear expectations and communicate the risks involved.
• Business Loans: Research and explore options for business loans from banks or financial institutions. Prepare a solid business plan, financial projections, and any collateral that may be necessary to secure the loan.
• Government Grants and Programs: Look into government grants and programs that may offer support for startup businesses in the virtual reality industry. These grants can provide valuable financial assistance while also validating the potential of your business.
• Investors: Seek out venture capitalists or angel investors who specialize in funding businesses in the gaming or technology sectors. Prepare a compelling pitch deck and be ready to showcase the unique selling proposition of your VR arcade.
• Crowdfunding: Consider launching a crowdfunding campaign on platforms like Kickstarter or Indiegogo. This can not only help raise funds but also generate buzz and awareness for your virtual reality arcade gaming center.
• Partnerships and Sponsorships: Explore potential partnerships with companies or organizations that align with your business concept. They may be interested in sponsoring your VR games or providing financial support in exchange for promotional opportunities.
• Grants and Competitions: Keep an eye out for grants or competitions specifically focused on the virtual reality or gaming industry. These opportunities can provide not only funding but also valuable networking and mentorship opportunities.

Tips for Identifying Potential Funding Sources:

• Research and understand the requirements and eligibility criteria for each potential funding source.
• Prepare a comprehensive business plan and financial projections to present to potential investors or lenders.
• Network and attend industry events to connect with potential investors, mentors, or partners.
• Seek advice from professionals or consultants with experience in securing funding for startup businesses.
• Be persistent and open to exploring various funding options to increase your chances of success.

Define The Business Concept And Unique Selling Proposition

Defining the business concept and unique selling proposition is crucial for the success of your Virtual Reality Arcade Gaming center. This step involves clearly outlining what sets your arcade apart from competitors and how it will attract and retain customers.

To define your business concept, start by identifying the key aspects of your VR arcade that make it unique. Consider factors such as the range and quality of games, the technology and equipment used, the overall atmosphere and ambiance, and any additional services or features you plan to offer.

Next, determine your unique selling proposition (USP) – the characteristics that differentiate your arcade from others in the market. Your USP may be based on factors such as affordability, convenience, exceptional customer service, exclusive partnerships with VR game developers, or any other aspect that adds value and makes your arcade an attractive choice for customers.

• Conduct market research to identify gaps in the market and understand what customers are looking for in a VR arcade.
• Consider the preferences and interests of your target audience when defining your business concept and USP.
• Stay updated with the latest trends and advancements in VR technology to ensure your arcade remains innovative and relevant.

Once you have defined your business concept and USP, it is important to integrate them into all aspects of your marketing and operational plans. Communicate your unique selling proposition clearly and consistently through your branding, advertising, and customer interactions. Your business concept and USP should resonate with your target audience and create a compelling reason for them to choose your arcade over competitors.

Conduct A Feasibility Study

Conducting a feasibility study is a crucial step in assessing the viability of your virtual reality arcade gaming business. It involves evaluating various aspects to determine if your business idea is realistic and has the potential to succeed in the market. A feasibility study helps you make informed decisions and minimizes the risks associated with starting a new venture.

During the feasibility study, you should consider the following key factors:

• Market Analysis: Analyze the demand for virtual reality arcade gaming in your target market. Research customer preferences, trends, and potential growth opportunities. Identify your target audience and their willingness to pay for the experience.
• Location: Choose an optimal location for your arcade based on factors such as accessibility, visibility, foot traffic, and parking facilities. Consider the rental or purchase costs associated with the location.
• Competition: Evaluate the existing competitors in the market. Study their pricing strategies, services offered, customer reviews, and market share. Identify the gaps that your business can fill or the unique selling propositions that differentiate your arcade from others.
• Costs: Determine the initial investment required to set up your virtual reality arcade gaming center. Include costs for renting or purchasing equipment, renovating the space, obtaining necessary licenses, and hiring staff. Consider operational costs, such as utilities, maintenance, and marketing expenses.
• Technical Requirements: Assess the technological requirements for running a virtual reality arcade. Ensure that you have access to reliable VR equipment, software, and necessary IT infrastructure. Consider the compatibility, maintenance, and upgrade costs associated with the technology.
• Regulatory and Legal Considerations: Familiarize yourself with the regulations, permits, and licenses required to operate a virtual reality arcade gaming center. Comply with health and safety regulations, as well as intellectual property rights for the games you offer.

Tips for Conducting a Feasibility Study:

• Utilize primary and secondary research methods to gather accurate and reliable data.
• Engage with potential customers through surveys or focus groups to gain insights into their preferences and expectations.
• Collaborate with industry experts or consultants who can provide valuable advice and guidance throughout the feasibility study process.
• Evaluate the financial viability of your business by conducting a thorough cost-benefit analysis.
• Keep an eye on emerging technologies and trends in the virtual reality gaming industry to ensure your business remains competitive.

Determine The Cost And Revenue Projections

Determining the cost and revenue projections for your virtual reality arcade gaming center is crucial to understanding the financial viability of your business. By conducting a comprehensive analysis, you can accurately estimate the expenses involved in setting up and running your arcade, as well as forecast the potential revenue streams.

Begin by outlining all the costs associated with your business, including:

• Equipment and Technology: Determine the costs of acquiring virtual reality headsets, gaming consoles, motion controllers, and other necessary equipment for your arcade.
• Physical Space: Calculate the expenses related to securing a suitable location, renovating the space, and providing the necessary infrastructure, such as electricity and internet connectivity.
• Employee Wages: Estimate the salaries and benefits for the staff you will need to operate your arcade, including receptionists, technicians, and game instructors.
• Marketing and Advertising: Allocate a budget for promoting your business through various channels, such as online advertisements, social media campaigns, and partnerships with local influencers or businesses.
• Utilities and Maintenance: Consider the ongoing expenses for utilities, maintenance, and repairs for your arcade, which may include electricity, water, HVAC systems, and regular equipment servicing.
• Insurance and Legal Fees: Budget for insurance coverage to protect your business from potential risks and liabilities. Additionally, consider any legal fees associated with licensing, permits, and contracts.

Once you have a clear understanding of your costs, you can move on to determining the revenue projections. Consider the following factors:

• Pricing: Set competitive and attractive pricing for your gaming sessions or packages, taking into account the cost of equipment, rent, and operational expenses.
• Customer Volume: Analyze the potential number of customers you can attract based on your location, target audience, and market demand. Estimate the average number of customers per day, week, or month.
• Average Ticket Size: Calculate the average amount spent per customer per visit, including additional revenue streams such as merchandise sales or additional game upgrade options.
• Partnerships and Sponsorships: Explore opportunities for partnerships or sponsorships with game developers, entertainment companies, or local businesses to generate additional revenue through collaborations or brand endorsements.
• Take into account the peak and off-peak seasons to accurately estimate the fluctuations in revenue throughout the year.
• Conduct market research to understand the pricing strategies of your competitors and adjust your pricing accordingly.
• Regularly review and update your cost and revenue projections to ensure they stay aligned with your business's actual performance.

By carefully determining the cost and revenue projections, you will be equipped with valuable insights to develop an effective financial plan and make informed decisions for the success of your virtual reality arcade gaming center.

Develop A Marketing Strategy

Once you have defined your business concept and unique selling proposition, it is crucial to develop a comprehensive marketing strategy to effectively promote your Virtual Reality Arcade Gaming center. A well-planned marketing strategy will help create awareness, attract customers, and ultimately drive revenue for your business.

Here are some key steps to consider when developing your marketing strategy:

1. Identify your target audience:

• Understand the demographics, preferences, and interests of your target audience. This will help you tailor your marketing messages and choose the most effective channels to reach them.

2. Define your branding:

• Create a strong brand identity that reflects the unique experience your VR arcade offers. Develop a visually appealing logo, tagline, and consistent brand messaging that captures the excitement and thrill of virtual reality gaming.

3. Utilize online marketing channels:

• Establish a strong online presence through a well-designed website and active presence on social media platforms. Engage with your target audience through regular content updates, promotions, and giveaways.
• Optimize your website for search engines to improve visibility and attract organic traffic. Consider investing in pay-per-click advertisements on search engines and social media platforms to reach a wider audience.

4. Leverage offline marketing strategies:

• Participate in local events, trade shows, and partnerships with complementary businesses to increase awareness about your VR arcade. Distribute flyers, brochures, and business cards in strategic locations to reach potential customers.
• Consider partnering with influencers, bloggers, or local media outlets to create buzz and generate positive reviews about your VR arcade.

5. Implement referral programs and loyalty rewards:

• Encourage your customers to refer their friends and offer incentives for successful referrals. Implement a loyalty program that rewards customers for repeat visits, encouraging them to become regulars.

Remember, a successful marketing strategy is an ongoing process that requires constant evaluation and adjustment. Keep track of your marketing efforts, analyze the results, and make necessary changes to ensure that your strategy is aligned with the evolving needs and preferences of your target audience.

Create A Detailed Operational Plan

Creating a detailed operational plan is crucial for the successful launch and management of your Virtual Reality Arcade Gaming center. This plan will outline the day-to-day operations of your business and ensure that all aspects are well-organized and efficiently carried out.

1. Layout and Design: Begin by determining the layout and design of your arcade. Consider factors such as the location of gaming stations, seating areas, ticketing counters, and any other amenities or facilities you plan to provide. Ensure that the layout maximizes space utilization and provides a comfortable and enjoyable experience for your customers.

• Create separate zones for different types of games or experiences to cater to a diverse customer base.
• Optimize the visibility of gaming stations and ensure easy navigation within the arcade.

2. Equipment and Technology: Identify the VR equipment and technology you will need to offer a seamless and immersive gaming experience. Research and select reliable suppliers and ensure that your equipment meets the required specifications and safety standards.

• Consider partnering with VR technology providers or experts for ongoing support and upgrades.
• Regularly maintain and update your equipment to ensure optimal performance.

3. Staffing and Training: Determine the number of employees required to handle various tasks, such as customer support, game assistance, and maintenance. Develop job descriptions and define the required skills and qualifications for each role. Implement a rigorous training program to ensure that your staff is knowledgeable and capable of delivering exceptional service.

• Emphasize the importance of customer satisfaction and train your staff in providing personalized experiences.
• Establish a strong teamwork culture to foster efficient and cohesive operations.

4. Health and Safety Measures: Prioritize the safety and well-being of your customers by implementing thorough health and safety measures. Develop protocols for equipment sanitization, customer hygiene, and emergency procedures. Regularly review and update these measures to comply with industry standards and guidelines.

• Invest in quality cleaning supplies and train your staff in proper equipment sanitization techniques.
• Display clear signage and instructions regarding safety precautions and emergency exits.

5. Operational Processes: Outline the step-by-step procedures for various operational processes, such as ticketing, game selection, customer registration, and payment collection. Streamline these processes to minimize waiting times and ensure a smooth flow of operations.

• Integrate technology solutions, such as self-service kiosks or mobile apps, to enhance the efficiency of operational processes.
• Implement comprehensive user-friendly systems for tracking customer data, reservations, and feedback.

By creating a detailed operational plan, you will be able to effectively manage your Virtual Reality Arcade Gaming center and provide customers with an outstanding experience. Remember to regularly review and update your plan as your business evolves and technology advances.

Establish A Financial Plan

Creating a robust financial plan is vital for the success of your virtual reality arcade gaming business. This plan will provide you with a clear understanding of your projected revenue, expenses, and profitability. It will also help you secure funding from potential investors or lenders.

1. Determine your startup costs: Consider all the expenses involved in setting up your VR arcade, such as acquiring VR equipment, leasing or renovating a space, obtaining necessary licenses or permits, and hiring staff. Make a comprehensive list of these costs to estimate your initial investment.

2. Calculate your operating expenses: Identify the ongoing costs that will keep your business running smoothly. This includes rent, utilities, employee salaries, maintenance, marketing, and any other recurring expenses. Ensure you have a realistic understanding of these costs to accurately project your financial outlook.

• Consider negotiating discounted rates with bulk VR equipment suppliers or service providers to reduce your initial investment.
• Factor in a contingency fund in your financial plan to account for unexpected expenses or fluctuations in the market.
• Research and understand any tax obligations or regulations specific to operating a VR arcade gaming business in your area.

3. Project your revenue: Estimate your income based on factors such as the number of VR stations, the average price per session, and the expected number of customers per day, week, and month. Analyze market trends and consider potential revenue streams, such as hosting parties or events at your arcade.

4. Create a sales forecast: Develop a sales forecast that outlines your monthly or quarterly sales targets. It should consider factors such as the average revenue per customer, anticipated growth rate, and any seasonal fluctuations that may impact your business.

5. Seek funding opportunities: Research various funding options, such as bank loans, grants, and venture capital. Prepare a compelling business plan and financial projections to present to potential investors or lenders. Highlight the uniqueness of your VR arcade gaming center and emphasize its growth potential to attract funding.

6. Monitor and review: Regularly review your financial plan and track your actual revenue and expenses against projected figures. Adjust your strategy as necessary to ensure financial stability and long-term profitability. Be prepared to make changes to your plan as you learn from the market and gain insights into your business's financial performance.

By establishing a solid financial plan, you'll have a roadmap for the financial success of your virtual reality arcade gaming center. It will serve as a valuable tool in making informed decisions, attracting funding, and navigating the financial challenges of running a thriving business in the competitive gaming industry.

In conclusion, writing a business plan for a virtual reality arcade gaming center involves several important steps. By thoroughly researching the market and target audience, analyzing competitors, and identifying potential sources of funding, you can lay the foundation for a successful venture. Defining your business concept and unique selling proposition, conducting a feasibility study, and determining cost and revenue projections will help you develop a clear and strategic plan.

Creating a comprehensive marketing strategy, a detailed operational plan, and an established financial plan will further solidify your business's chances of success. By following these nine steps, you can ensure that your virtual reality arcade gaming center is well-organized, efficient, and poised for growth in the ever-expanding virtual reality industry.

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Marketplace

VR Arcade Open Business Plan: Customer Experience

Best Practices

February 22, 2024 | 43 min read

VR Arcade Open Business Plan

Tips for Creating the Best Possible Customer Experience

As a company whose ultimate goal is to help ensure the success of Virtual Reality, we strive to empower those who share the same vision. Using data from 250+ locations using SpringboardVR, we compiled a list of top VR locations and spoke with their owners to understand what they’ve done to be successful in the VR industry. Based on what we’ve learned, we provide some recommendations and best practices on how to run a successful VR Arcade in this section of our “open business plan.”

The Importance of the Customer Experience

Back in May, we wrote the VR Multiplayer Gaming Guide , and proposed the notion that a more immersive virtual reality experience results in higher customer satisfaction, which in turn generates recurring business and higher profitability for a successful VR Arcade. Almost a year has gone by now, and if you’re thinking what we’re thinking, you’re like, “duh” . So much has happened over the past year, and like many in the VR industry, we’ve learned a ton. We’ve also been able to meet some amazing entrepreneurs in this industry who have also learned an immense amount over the past year. This gave us the opportunity to sit down and speak with some of the top VR Arcade owners all over the world to ask the question, “How do you create the best possible customer experience?” Lucky for you (and us), they said more than just “multiplayer gaming.”

Based on our findings, there are four main components to ensuring that every customer that comes into your Arcade will have the best possible experience. We will dive deep into each component and see what these top VR Arcade owners had to say about each one.

Four Components for the Best Possible Customer Experience

• VR Arcade Layout & Interior
• Staffing & Communication
• Multiplayer & Social Experience
• Immersive Experiences

VR ARCADE LAYOUT & INTERIOR

Just like any first impression, the customer’s first impression when they walk into the Arcade is huge. It sets the tone for what they will expect the rest of their time there, and what they will remember when recalling their experience to their friends or family (aka potential customers). Below are some tips and examples of what other successful VR Arcade owners have done.

Tip #1: Choose a theme

Erik Madsen, owner of Arcadia VR Lounge in Kelowna, British Columbia, found that choosing a theme really helped him as he was developing and building out his business model.

“Pick a theme and stick with it,” Madsen stated. “Really use that to your advantage. It just gives you a ton of focus on which way you’re going, and you can really focus on the quality of the experience — just making sure that everything you do is revolving around the same theme.”

Tip #2: Think through the aesthetics

Erik Madsen also designed Arcadia VR Lounge’s main lobby and waiting room as a homage to the 80s arcades. But as a customer enters the gaming area, it is as if they have entered an entirely different reality.

“We have the computers displayed inside the walls. We’ve custom built computer cases that allow you to see all the computer hardware, and when we were choosing the computer hardware, we went for as much RGBY lighting as much as possible, so it really adds to the feel of high-tech, and kind of the new age of arcade and gaming”, says Madsen.

“We definitely do get a bit of that ‘wow’ factor right off the bat. It’s something new — especially for people that have never tried VR. It’s something unknown, high-tech; it feels like you’re walking into the future. It’s definitely a cool experience watching people experience that for the first time.”

Erik also says that his futuristic aesthetic even helps with PR.

“It helps you in marketing, it helps you in the aesthetic of location, and people notice it. So many times, the people coming in just want to play VR, it doesn’t matter about the aesthetic of it. But, we get people, on a daily basis, commenting about the aesthetic, and just really enjoying the atmosphere of stepping into the future of arcades.”

Your Arcade layout can also be a huge determining factor in the type of experience a customer has in your VR Arcade. If you want to learn more on VR Arcade layouts, you can watch this Arcade Layout Tour , or read more about Base Station Set-up in VR Arcades . Based on the feedback we received from these VR Arcade owners, we’ve provided a few tips below:

Tip #3: Make your single player station around 8’x8′ to 8’x10′

By standardizing your single player stations, it provides the customer with ample space to move around without disrupting their immersive experience.

Tip #4: Provide reminders to help the customer stay in the gaming area while staying immersed

Jason Van Hierden, owner of VRKade in Calgary, Alberta, offered some great advice in laying out your game stations.

“On the floor, we have carpets. Those carpets are exactly a foot smaller than the bay itself. If you go too far, you have another soft reminder that you’ve gone too far. You’ve backed up too far against this wall, so you’re not going to feel it with your hands, but with your feet. It’s a soft reminder that doesn’t break immersion.”

Tip #5: Make sure you have durable dividers

VRKade also uses curtain dividers in all of their stations. Jason says there are certain perks of using curtains:

“[The curtain divider] gives you a couple of advantages. The first one being, if you go past your space, all you hit is a light curtain. You don’t have a hard reminder that you went too far. If you had a [sheetrocked] wall or a rubber wall and you hit that really hard while playing, the rest of your play time, you’re going to play a little bit more timidly because you’re scared of cracking your knuckles against the wall again, right? You stay close to the center. You’re not going to be quite as aggressive and it’s not going to be as much fun.”

If you choose to use curtain dividers in your VR Arcade, just make sure the fabric is thick enough to block base station interference from other bays. Luckily for you, (not so much for Jason), VRKade learned this the hard way. “When we opened our first store, we used burlap curtains. The burlap definitely didn’t block it. We had issues. We would stay up until 4:00AM. The problem with base stations issues is it throws your head all over the place and you get motion sick. It took us about two or three months to build an entire system around these things.”

If you already have dry-walled or hard dividers, you may want to add ¼ or ½ inch foam to keep from damaging the walls and controllers, as well as inhibiting the experience for the customer.

Tip #6: If you think you need help setting up your VR Arcade… Get help!

If the thought of designing the stations, purchasing the right equipment, ordering the right materials, building out the stations, setting up the headset and base stations, and hoping it all works is giving you anxiety, don’t sweat it! If a custom build-out that you do on your own isn’t your cup of tea, a turnkey solution might be right for you. With a turnkey solution, the design, purchase, installation, and build-out is already predetermined and guaranteed to work.

Mark McFatridge, owner of Apex Virtual Reality inside of Altitude Trampoline Park in Little Rock, Arkansas, opted for a turnkey solution and was not disappointed. He worked directly with his turnkey provider, and really valued the collaboration. He states, “We developed a really good working partnership with design for our Arcade within the space allocated using his expertise in design and functionality.”

Through collaboration, they were able to solve a problem before it even came into fruition.

“After we had gone through with what we thought was our final design, we did one last measurement, and one of the things that we [did not consider] was one of our shipping docks. So we ended up shifting it, and ironically, it turned out to be a much better setup than we originally had.”

Apex Virtual Reality is officially up and running, and Mark could not be happier with the result.

“We’re really proud of the design.”

Want to learn more about VR turnkey solutions for your location? Just contact us here , and we’d be happy to point you in the right direction.

STAFFING & COMMUNICATION

Having a staff that loves what they do it essential. Great communication skills to the owner, other employees, and especially the customers are also a nonnegotiable must .

Tip #1: Make sure your staff knows it is all about trust

Erik Madsen of Arcadia VR Lounge puts it this way:

“VR is a trust thing. You’re closing yourself off to the real world. You have no idea what’s going on out there, and you’re putting your trust in whoever is out there supposedly helping you. So making sure not to abuse that trust, and making sure that you are there for the customer when they need it, is the biggest thing out there for customer experience.”

Tip #2: Let your staff know their worth

This is more than just a retail job. We are providing insight into what the future may look like — not just with gaming, but with everything. Your staff needs to know the responsibility they carry with each and every customer they interact with.

“The staff makes all of the difference”, says Erik. “If you have happy, helpful staff that are always on their toes trying to help people out — it’s huge. Nine times out of ten, that’s going to be your break point. If you have rude staff, you’re going to lose that customer immediately.”

Tip #3: Be deliberate in your hiring process

Jason Van Hierden offers some insight into what VRKade looks for when hiring a new member on their team.

“We look for Best Buy employees and we look for Starbucks employees. Both of those are already trained in what we’re looking for. They’re trained in a fast-paced environment. They’re trained for customer service. They’re trained for up-sells. They’ve already got a lot of the skills that we’re looking for and they’re not normally that expensive… We’ve had a lot of success with those.”

It is also important to know what a successful employee looks like, and even more importantly, doesn’t look like. Jason expounds:

“We hire slowly and we fire quickly…If you can’t learn, you’re going to feel uncomfortable because everybody’s going to be past you in two months.”

Matt Adamson, owner of SpacesVR in Courtenay, British Columbia, chose a different approach with when hiring has staff. “My staff is very … is it politically correct to say “geeky?” They are very geeky. They [are] kind of people, they love games, they love comics. I hired them specifically because they wanted more than anything to work at a VR Arcade, and then they also had some customer service experience.” He continues:

“I looked for those two things. Somebody who wanted to work at a VR arcade more than anything, plus had some customer service experience. It’s been working out well.”

Tip #4: Look for empathetic team members

Madis Vassar, founder of CTO of Futuruum in Estonia, had a great comment regarding staff:

“We’re looking for people who are good communicators, and can take on the perspective of the player. When they are in trouble, then how do you go about explaining what to do next?”

Tip #5: Find your successful employee-to-station ratio

We found that this ratio varies and is dependent on a number of factors. But generally speaking, 2 employees to every 6–10 stations seems to be the sweet spot for most successful Arcades.

Matt Adamson, owner, spoke about how they do it at SpacesVR. “One thing we’ve done is when we know it’s going to be busy, we’ve got a minimum two-people coverage. So, one of the key things you need to have is enough coverage for somebody to be running around taking care of the people that need taking care of, while there’s someone else who can still answer the phone or greet people at the door, or help the other people who need help.”

Note: This proposed ratio is only possible with a VR management and distribution platform like SpringboardVR. Without it, you’ll be lucky to get by with 1 employee for every 1–2 stations.

Jason at VRKade also had this to say, “We need four people to do our 32 stations. The numbers do increase. You can have one person per 10 bays, but then you still need that fourth person running around because on a busy Saturday, you are going to have a headset go down. It’s not a matter of if, it’s a matter of when. You need that extra person on site too.”

MULTIPLAYER & SOCIAL EXPERIENCES

As mentioned at the beginning of this article, providing multiplayer gaming options is a great way to bolster and amplify the customer experience. But just loading up Rec Room for a few people usually won’t cut it. For the best possible multiplayer experience, it has to be social as well. But how does one go about ensuring multiplayer events are easy and social for their customers?

Tip #1: Build a business model around multiplayer experiences

“You provide [multiplayer] the right away” Jason of VRKade states. “We do almost exclusively multiplayer experiences. We do do a couple of single player, but like job simulator — we don’t have that one. It’s single player and we don’t want people to feel exclusive. It’s the exact same thing as I’m presuming you don’t go to the movies by yourself.”

Matt Adamson of SpacesVR had similar thoughts:

“Multiplayer is everything. It adds to the immersion so much. A game can be relatively [bad] as far as immersion goes, but just the fact that you can talk to your buddy and see their avatar while you’re playing the game makes you forget that there’s a real world out there.”

Madis Vassar also shared a similar sentiment:

“We always sell our experiences as a social experience. You come here with a friend, and either you play together in separate boxes, or you play with only one set of headsets, but the others will watch you from the screen, or cheer you on, or comment.”

(You can read more on the importance of immersion in a VR Arcade here .)

Tip #2: Provide experiences that friends can talk about after they’ve finished

Sure, experiencing VR for the first time, regardless of who you’re with, is an unforgettable experience. But if we try to see through the eyes of the consumer, we can make certain assumptions about what will be the most memorable part of the experience… and what will encourage them to keep coming back.

“It’s looking at it through the eyes of the consumer”, says Jason of VRKade. “The consumer loves to talk to each other and they want multiplayer experiences, so when they leave, they can be like, ‘Joe, you totally saw when I ducked here and I put my gun under the table there and shot you in the chest!’ You know, all of those things — you don’t get that in single player.”

Tip #3: Single players can still be social players

Madis Vassar of Futuruum expounds:

“Even if someone is coming alone, then we say that, ‘Look, these are new games that you can play with people from around the world.’ It’s still a social experience.”

Note: With SpringboardVR’s content marketplace , you’ll have instant access to commercially license over 43 multiplayer titles!

IMMERSIVE EXPERIENCES

There’s that buzzword again —  immersive . You have probably heard or read that word a couple thousand times over the past year or so (at least a dozen just from this article), but it may be the most important word involved in helping run a successful VR Arcade. Immersion is what makes virtual reality different than any other type of gaming experience. Sure, the games and experiences may be great, but it is the level of immersion that makes a VR experience unforgettable. Jason with VRKade simply states:

“As much as possible, we try to give people an experience that doesn’t break immersion.”

So what are some of the VR Arcade must-haves to ensure that every customer attains the highest level of immersion? These VR Arcade owners provide some insight.

Tip #1: Know what type of content your customers want, and give it to them

Based on the idea that the more immersive experiences will usually be the more popular experiences, Erik Madsen of Arcadia VR Lounge provides the type of content that is most requested, regardless of price or reputation.

“We want to have the best experiences that we can possibly get in there, so the content comes first; what people want comes first.”

Tip #2: Educate your customers with some kind of tutorial

Whether it be the virtual tutorials offered by SpringboardVR and Vive, walking through the controls with each customer, or making a tutorial video on your own, educating your customers is a great start to making sure once they are in the headset, they won’t need to break immersion to ask for help.

James Pollock, owner of Arctic Sun VR in Fairbanks, Alaska, took a very creative approach to solve this problem, and created his own tutorial video. He has found this to be extremely effective in educating first time users, and minimizing confusion and frustration once in the headset.

Tip #3: From the very start, it has to be simple

Erik expounds, “As for the experience when you get into VR, outside of the aesthetic; I keep coming back to that but that’s always going to add to the experience; but once you get into VR, just having a simple interface to get into games.

Tip #4: Provide an easy-to-use, in-headset game launcher

Erik Madsen of Arcadia VR Lounge provides his thoughts on on how a game launcher like SpringboardVR has helped his VR Arcade, “That was definitely one big thing in our success, is just that the HTC Viveport launcher, it’s great for in-home use… but it’s so complicated for somebody who has never played VR before. You’re going to turn them off just getting them into a game, let alone actually playing the game and understanding the controls. So just having that launcher that’s graphical, and you can see all the games around you and really experience the space before you even get into a game, it’s priceless at that point.”

Tip #5: Have a way for staff and customers to communicate

If a customer has to take off their headset or headphones to ask for help, that breaks immersion. If a customer has to yell at their friend they’re playing multiplayer with, it breaks immersion. If a VR Arcade is able to offer a solution to these problems, they have brought the level of immersion to an all-time high. VRKade uses Discord to solve these problems.

Jason explains, “When our techs are talking to our clients, it’s always through Discord, because if you have to pop off an ear muff or an earpiece to hear what I’m saying, ‘okay, yeah point at this, pull the trigger on that’ — I just broke immersion. You have to step outside of virtual reality to get orders for what you’re doing in virtual reality. We don’t want to break that immersion as much as possible.”

So let’s recap…

Returning customers are essential in running a successful & profitable VR Arcade, and a more immersive experience increases the likelihood of repeat customers.

The four main components of ensuring the best possible customer experience are as follows:

All of the above mentioned components must work together in unison to make the customer experience as great and unforgettable as possible. Madis Vassar comments, “Every step of the customer experience needs to be great in order for it to be great.”

Special Thanks to:

Jason Van Hierden: Owner of VRKade 3 location in Alberta, Canada

Eric Madsen: Owner of Arcadia VR Lounge Kelowna, British Columbia

Madis Vassar: Co-owner and CTO of Futuruum 2 locations in Estonia

Matt Adamson: Owner of SpacesVR Courtenay, British Columbia

James Pollock: Owner of Arctic Sun VR Fairbanks, Alaska

Mark McFatrigde: Owner of Apex VR in Altitude Trampoline Park Little Rock, Arkansas

Was this article helpful? Stay tuned to see more articles in our series, “ VR Arcade Open Business Plan !”

We’d also love to know if there is anything else you’d like for us to write about! Comment or message us your thoughts or topics and we’ll be more than happy to review them and get the conversation started.

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• How to Start an Arcade Business

If you are looking to start an arcade business , the new amusement entrepreneur must first understand the local market opportunity, the demography of that local market, and just as important, his or her own arcade business goals. There are many options to consider when looking to start your arcade business, including the arcade games you will need for your target customers, and the type of game play your arcade business will offer. This includes different arcade machines, redemption games (ticket games) and the play value of each of these game types.

Start an Arcade Business

Step 1: It all starts with a business plan

Probably not what you wanted to hear first, but the unfortunate truth to starting a successful arcade business starts with a good, accurate business plan including an analysis of your market potential. From your plan, everything else will come together. What machines, how many, your best location, startup costs, attendance and an expected return on investment.

Step 2: Use your plan to source the best arcade machines and redemption games

With your plan complete, it's finally time for the fun stuff. Sourcing the best, coolest games and machines for your location and demographic profile, along with the design, layout and build-out of your ideal location. 

Step 3: Your Ideal Location

We've all heard it before... location, location, location. In terms of an arcade game room business, finding the "ideal" location may not mean the best location, but the right location. Within easy reach of your target market, at the right lease rate, terms and available space to accomodate your guests.

When starting an arcade business , there are several things to keep in mind. Your arcade game room is a player in the overall family fun center attraction mix. Depending on your fun center business goals and your target market demographics it might be a key player, or it might just be a necessary component to the long term success of your business. Make no mistake, arcade game machines are still in fashion and profitable in the right location, with the right mix and game room design.

The point of this conversation is to open the eyes of the new arcade startup to the bigger picture. Old style, stand-alone video arcade game room just doesn't have the pull, or the community attraction they once had. However, a successful arcade business has become an integral component of your overall attraction mix and the fun center or indoor party center business itself.

Family fun center businesses are smart to include an arcade game room, if it makes sense for their target aged customer and local demographic. For a younger indoor party center demographic (typically 10 years and under), video arcade games are not as popular as redemption games . Secondly, mothers are the primary buyer for this younger demographic and justified or not, often see the content of these video arcade games as violent and destructive. If on the other hand, your market includes tweens, teenagers and young adults, a video arcade game room is expected and will do well with the right arcade game mix and game room design.

Arcade Business - Design for Profit

For example, you need quick play games, novelty games, merchandise and redemption games, shooting games, driving games and traditional pinball games. If you are going to be catering to a younger demographic you may also want to include kiddie games.

How to Start an Arcade - Space Planning

Here are some base rules of thumb when looking at designing a successful arcade game room:

• Use an estimated 50 sqft of floor space per game (100 games = 5,000 sqft).

• You can bunch games up side by side, or back to back to save space.

• Video arcade games need approximately 4 feet clearance in the front of the game.

• Basketball or SureShoot type games require 6 feet of clearance in the front of the game.

• Redemption games can vary dramatically however, a minimum of 2-3 feet in front and 1-2 feet on each side.

• If you are using multiples of the same type of games or titles, you can push these games side-by-side to reduce the amount of space required.
• For larger, multiplayer arcade coin games or redemption games that can be played by 4 to 6 players at a time, this type of cabinet game should be used as an eye-catcher and placed in a visible spot with a minimum of 4-6 feet around the entire game.

Your family fun center, indoor party center and other amusement attractions are a fun place for families, tweens, teenagers and groups of friends to go play and spend some time (and money) together.
 There are a wide assortment of video games, arcade machines and coin operated games that can help make this experience diverse, entertaining and time well spent for your guests.

To develop a successful arcade game room you need to offer your guests a good variety of game-play and play-ability, from a diverse set of arcade machines and redemption games.

 When designing your game room, the game mix and game room layout are the key areas of planning for long term success in your attraction business. As with space planning for your amusement fun center in general, providing your guests with a visually pleasing and traffic friendly layout is the corner stone of arcade game room success. At a glance, your fun center guests should be able to quickly feel enticed to enter the room and select an arcade game to start playing.

Arcade Game Room - Final Thoughts

Once your guests find games to play, how they play those games are just as important as which arcade machines and games they play. Some games are multi-person games and require a lot more space than a single pinball machine would need. Popular games tend to draw a crowd, and having a visible location for such games, with enough surrounding space to accommodate those crowds is also important.

When looking to purchase arcade machines for your business here are a few key things to keep in mind;

• Your target demographic - who are your customers, and what ages are they? This will help you to determine the ultimate make-up of your game selection, arcade games vs. redemption games.
• The amount of floor space you can devote to a your game room. As mentioned above, arcade machines and interactive games vary in size and can require a lot of square footage if you intend to offer 60-70 games.
• Consider good crowd control and space management when placing games. Focus on visibility and popularity - bringing the hot games to the front of your game room will encourage play and guest participation as friends watch friends play.
• Use lighting to enhance the room and direct guests focus to specific arcade machines that are proven revenue earners.

Spend the time to plan and design a good game room with the right game selection and space planning now, and it will help draw strong repeat visits and revenue opportunities for your arcade business startup today and over time.

As a point in our general experience, for many entrepreneurs we speak with, the idea of an arcade takes shape as a multi-attraction 'fun center'... or party center - if your goal is to start an arcade, you may very well be looking at starting a fun center business with an arcade game room. The reasons for this are many, check out the article Video Arcade Game - A Business in Decline to see how and why the arcade business is changing. If you have further interest and would like a no-obligation, free chat about the business and getting started, feel free to book some time with us:  Fun Center Academy - Free Advice

Previous Articles

• The Popularity of Indoor Playgrounds
• Amusement Business - Demographics
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• Amusement Demographics 101 | Family Entertainment Center Business
• Amusement Equipment Leasing
• Amusement Lease Space vs. Buying
• Arcade Games vs Redemption Games
• Commercial Indoor Playground Equipment | Top 5 Questions
• Family Entertainment Center Design | Start Here
• Fun Center Design for Profitable Birthday Parties
• Fun Center Funding
• Fun Center Location & Layout Considerations
• Fun Center Play-a-bility : The Magic Formula
• Go Karts for Fun Centers and Attractions
• How to Start - 10 Steps to Start a Family Fun Center
• Indoor Playground Designs
• Indoor Playground Equipment - Buying From China
• Indoor Playground Safety
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• Indoor Playgrounds
• Indoor Playgrounds - Buying Used
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• Laser Tag Equipment Options
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• Revenue Per Square Foot
• Video Arcade Games
• What is the ideal length for a Business Plan?
• Writing a Business Plan - 60 Second Guide

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"I just wanted to say thanks for taking the time to chat with me. This was a very valuable conversation as it gave me a whole lot more to think about. Although I have done some research, our conversation opened my eyes to things I was unaware of. From lease negotiation and startup costs to a much better understanding of what and how our local community and area demographics play into our fun center planning. Time well spent and I would recommend others who are researching their startup, give your office a call. You were extremely selfless with information and provided an encouraging view based in Reality. Thank you." Kendra, California

"Thanks for taking the time to chat with us, we really appreciate your time and insight. We had some idea of project scope, but had no idea about all the minutia and details to consider for startup location and our funding. After speaking with you, we came to the realization that ultimately the project we were considering is more of our time than we can commit to, and would not have discovered this reality until much further along. Thanks for helping us determine our path forward." Stacy & Brett, Texas

"This was by far the best thing I have done for my fun center startup. You provided such great and unbiased information, some of which I did not want to hear, but so glad that I did. I now have the focus of mind to proceed with a lot more confidence and direction. I just want to say again, thank you for sharing these insights and your experience." Betty, Maryland

"I wanted to say thanks again for all of your time in answering my many questions, and helping to make me better understand the steps needed to see our dream of a family entertainment center business in reality. For the first time in this journey I understand how and why to prepare our plan for funders, and how to match my own abilities and financial resources to accomplish my goal. And yes, I would recommend others do take advantage of this service, I can’t imagine to find this much experience and honest at any price, none the less for free. Thank you." Claire, New York

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• Family Entertainment Centre

5 Proven Sources of Funding for an Arcade Game Room Business

A family entertainment center or family fun center comes in different shapes and forms. Your dream of starting your own business comes with a lot of work, studies, analyses, and of course – costs. Let’s zero in on an arcade game business idea.

Opening an arcade is indeed profitable - in fact, the International Association of Amusement Parks and Attractions (IAAPA)’s 2020 Benchmark Series found that arcades and video games are the most common main activities offered by FECs. In the same study, it is also found that arcade games account for more than 40% of the floorplan and are commonly managed in-house by FEC owners and operators.

This being said, there is stiff competition out there. How do you make prospect investors notice you and your business idea in a sea of direct and indirect competitors?

What do you need to get your idea funded?

You’ll need…

• a comprehensive feasibility study
• a concrete FEC business plan

After accomplishing these two heavy-lifting tasks, you are well on your way to presenting your case to prospect investors – but the real work is in getting them to say YES.

1. Traditional funders

Banks loan money to qualified investment opportunities that will drive them profitable returns. However, most banks will want to see a level of financial commitment from you or your partners before showing any interest in offering you a loan. This is to ensure that you have your skin in the game from around 20% to 40% of the total funds stated in your business plan.

2. Venture capital firms and angel investors

These investors are usually looking for potential tangible value and for those that can be patented in the future, like a chain retail venture.

3. Personal network

For simpler business ideas like a single, family-owned location, you can try pitching your plan to your circle of influence. Budding entrepreneurs like you can start by asking family and friends to invest in the opportunity, which you will then use to leverage as seed funding to acquire the balance of your total funding from a bank or other sources.

4. Lease options

There are several companies that provide lease options for capital expenses to start your business. They usually offer a maximum of $25,000 to $40,000 depending on existing personal or existing business financial records, credit checks, and other payment histories.

5. Small Business Administration

The SBA provides a guarantor for approved lending institutions. An SBA-backed loan can be used as seed funding to get the interest of a traditional funder to help with the remaining balance in your total funding.

Good luck in finding funding for your business of fun!

>> Click on the link to check out our Guide " How to Start a Family Entertainment Center Business ":

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Topics: Blog , How to , Arcades , Family Entertainment Centre , NASA , EMEA , APAC

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Related posts, what are good interview questions to ask when hiring a general manager.

If you are looking for how to hire a general manager for family entertainment center business, you must prepare a set of interview questions for your prospective candidates to assess if they are the right person for the job. This will also enable you to check if an applicant is a good fit for your company culture, your team, and your business. To help you ask the right questions that generate the answers and outcomes that you hope for, we talked to Embed's very own Kash Ahmad, Chief Management Consultant in Operations at NASA. Ahmad has over 25 years of extensive experience in the amusement and hospitality industry, including recruiting general managers for top family entertainment centers in the business. Choosing the right general manager for your FEC is crucial to ensure that your company culture has a steady footing: "A good leader can make all the difference. Different employees work differently depending on the manager. Taking the time to make the right selection for the manager you’re going to bring on board is essential. If you bring in the wrong person who doesn’t believe in your culture or plan, does not care about your employees, or doesn’t care about the business that much, it can really move your culture backward," emphasizes Ahmad.

• Jul 22, 2022 9:00:00 AM

Where Do We Hire a Good General Manager?

Talent can come from everywhere. However, finding a culturally good fit for your family entertainment center's general manager can be quite a challenge. Company culture and values carry great weight in choosing leaders such as GMs for your team. Settling for just anybody can discourage good employees, run guests out the door, and cripple the energy to go to work. This is one of the reasons why you have to take into consideration where you scout for this role. Before you can start, you have to be prepared with some of the key aspects of the job hunt, such as the general manager's role, responsibilities, and the required skills and characteristics. To help you search for the right place for your FEC's next leader, we talked to recruitment and hospitality veterans David Curtis, Senior Director of Talent at Dave & Buster’s, and Beth Standlee, CEO & Founder at TrainerTainment. Here's where you can pool prospects for your FEC's general manager:

What are the Important Skills & Qualities of a General Manager?

Looking for how to hire a general manager for your family entertainment center? There are specific skills, qualities, and characteristics that you need to be on the lookout for. Whether you have a mom-and-pop FEC or are already scaling into a chain, hiring a general manager is necessary and beneficial to keep your daily operations in check, your staff in their best professional shape for your guests, and your business in its most innovative and successful form yet. To help you on your talent acquisition journey for this vital role, we talked to David Curtis, Senior Director of Talent at Dave & Buster’s, Beth Standlee, CEO & Founder at TrainerTainment, and Embed's very own Kash Ahmad, Management Consultant in Operations at NASA. According to our industry experts, the following are the non-negotiables when it comes to hiring a general manager:

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The financial plan for an arcade game room.

Running a successful arcade game room is about more than just offering the latest games; it's about creating a strategic financial plan that ensures long-term success.

In this post, we'll explore the key components of a financial strategy that can turn your arcade game room into a profitable venture.

We'll cover everything from initial investment costs to the day-to-day financial management, as well as forecasting for future expansions or upgrades. Our goal is to help you navigate the financial aspects of the gaming industry.

So, let's level up your business acumen and set your arcade game room on the course to financial victory!

And if you're looking for a comprehensive 3-year financial analysis for your arcade without the hassle of crunching numbers, please download our specialized financial plan designed for arcade game rooms.

What is a financial plan and how to make one for your arcade game room?

A financial plan for an arcade game room is a comprehensive guide that assists you in navigating the financial aspects of your gaming business.

Think of it as programming a new video game: You need to understand the equipment you possess, the type of games you want to offer, and the cost associated with setting up and maintaining your gaming paradise. This plan is crucial when launching a new arcade as it turns your enthusiasm for gaming into a practical, organized business.

So, why create a financial plan?

Imagine you're planning to open an exciting arcade game room. Your financial plan will help you comprehend the expenses involved - like leasing your arcade space, purchasing arcade machines and gaming equipment, initial setup costs, hiring staff, and marketing expenses. It's comparable to checking your inventory and budget before embarking on a major gaming setup.

But it's more than just adding up costs.

A financial plan can provide insights similar to mastering a high score in a complex game. For example, it might reveal that certain high-end arcade machines are too costly, leading you to opt for more affordable, popular alternatives. Or, you might discover that having a large team of technicians is not necessary at the initial stage of your business.

These insights help you avoid overspending and overstaffing.

Financial plans also serve as a forecasting tool for identifying potential risks. Suppose your plan shows that reaching your break-even point – where your income equals your expenses – is feasible only if you attract a specific number of customers daily. This insight points out a risk: What if customer turnout is lower than expected? It prompts you to think about alternative strategies, like hosting gaming tournaments or offering special membership packages, to boost revenue.

Now, how does this differ for arcade game rooms compared to other businesses? The main difference lies in the nature of the costs and the revenue pattern.

That's why the financial plan our team has developed is specifically designed for the arcade gaming industry . It cannot be applied universally to other types of businesses.

Arcade game rooms have unique expenses such as the upkeep of gaming equipment, technology updates, and specific entertainment licenses. Their revenue may also vary more significantly - consider how special events or school holidays might increase foot traffic, while other periods might be slower. This contrasts with, say, a grocery store, where inventory turnover is more consistent and predictable.

Obviously, our financial plan takes all these specific factors into account. With this approach, you can easily create tailored financial projections for your new arcade game room project.

What financial tables and metrics include in the financial plan for an arcade game room?

Creating a financial plan for a new arcade game room is a critical step in ensuring the success and viability of your entertainment business.

It's important to recognize that your future arcade's financial plan is more than just numbers on a paper; it's a strategic guide that directs you through the initial phases and aids in sustaining the business over time.

Let's begin with the most essential element: the startup costs. This encompasses everything you need to launch your arcade game room.

Consider the expense of leasing or purchasing a space, arcade machines, initial inventory of gaming supplies, furniture, décor, and even the signage outside your arcade. These costs provide a clear view of the initial investment required. We have detailed these costs in our financial plan , so you don’t have to search for them elsewhere.

Next, take into account your operating expenses. These are ongoing costs that you will incur regularly, such as salaries for your staff, utility bills, maintenance of gaming equipment, and other day-to-day expenses. Estimating these expenses accurately is essential to understand how much your arcade needs to earn to be profitable.

In our financial plan, we've pre-filled all the values, giving you a good idea of what these might amount to for an arcade game room. Naturally, you can modify them in the 'assumptions' tab of our financial plan as needed.

One of the key tables in your financial plan is the cash flow statement (included in our financial plan). This shows the expected flow of cash in and out of your business.

It’s a monthly (and annual) summary that includes your projected revenue (how much money you expect to make from gaming services) and your projected expenses (the costs of running the arcade). This statement is crucial for anticipating periods when you might need extra cash reserves or when you can plan for upgrades or expansion.

Another vital table is the profit and loss statement, also known as the income statement, which is part of our financial plan.

This important financial table gives you an overview of your arcade's profitability over a specific period. It lists your revenues and deducts expenses, showing whether you're making a profit or a loss. This statement is especially significant for understanding the financial health of your arcade over time.

Lastly, the break-even analysis (also included) is indispensable. This calculation tells you how much revenue your arcade needs to generate to cover all its costs, both initial and ongoing. Knowing your break-even point is crucial because it provides a clear sales target to aim for.

We've also incorporated additional financial tables and metrics in our financial plan (provisional balance sheet, financing plan, working capital requirement, ratios, charts, etc.), offering you a comprehensive and detailed financial analysis of your future arcade game room.

Can you make a financial plan for your arcade game room by yourself?

Yes, you actually can!

As mentioned above, we have developed a user-friendly financial plan specifically tailored for arcade game room business models .

This plan includes financial projections for the first three years of operation.

Within the plan, you'll find an 'Assumptions' tab that contains pre-filled data, covering revenue assumptions, a detailed list of potential expenses relevant to arcade game rooms, and a hiring plan. These figures can be easily customized to align with your specific project requirements.

Our comprehensive financial plan encompasses all essential financial tables and ratios, including the income statement, cash flow statement, break-even analysis, and a provisional balance sheet. It's fully compatible with loan applications and caters to entrepreneurs of all levels, including beginners, requiring no prior financial expertise.

The process is automated to eliminate the need for manual calculations or complex Excel manipulations. Simply input your data into designated fields and select from the provided options. We have streamlined the process to make it user-friendly, even for those unfamiliar with financial planning tools.

Should you encounter any issues, please don't hesitate to reach out to our team. We guarantee a response within 24 hours to troubleshoot any problems. Additionally, we offer a complimentary review and correction service for your financial plan once you have filled all your assumptions.

What are the most important financial metrics for an arcade game room?

Succeeding in the arcade game room business requires a deep understanding of both the entertainment industry and the science of financial management.

For an arcade game room, certain financial metrics are particularly important. These include your revenue, cost of goods sold (COGS), gross profit margin, and net profit margin.

Your revenue encompasses all the income from game services and sales, providing a clear picture of the market's response to your entertainment offerings. COGS, which might include the cost of arcade machines and direct labor, aids in understanding the direct costs associated with your service.

The gross profit margin, calculated as (Revenue - COGS) / Revenue, indicates the efficiency of your operational process, while the net profit margin, which is the percentage of revenue remaining after all expenses, reflects your overall financial health.

Projecting sales, costs, and profits for the first year involves a detailed analysis of several factors. Begin by researching your local market and target audience. Estimate your sales based on factors such as location, local competition, and pricing strategy.

Costs can be categorized into fixed costs (like rent and utilities) and variable costs (like machine maintenance and hourly labor). Be conservative in your estimates and account for variations in sales and costs over different periods.

Creating a realistic budget for a new arcade game room is essential.

This budget should cover all expected expenses, including rent, utilities, equipment purchase or leasing, initial inventory of spare parts, labor, marketing, and an emergency fund. It's also important to set aside funds for unforeseen expenses. Keep your budget flexible and regularly review and adjust it based on actual performance.

In financial planning for an arcade game room, key metrics include your break-even point, cash flow, and asset turnover.

The break-even point helps you understand how much you need to earn to cover your costs. Positive cash flow is vital for daily operations, while a good asset turnover rate indicates efficient management of your arcade machines and inventory.

Financial planning can vary greatly between different types of arcade game rooms.

For example, a family-oriented arcade might prioritize a diverse range of games and customer experience, while an arcade focusing on VR experiences might have higher equipment costs and focus on immersive gaming experiences.

Recognizing signs that your financial plan might be off-track is crucial. We have listed these indicators in the “Checks” tab of our financial model. This will give you guidelines to swiftly correct and adjust your financial plan to achieve relevant metrics.

Red flags include consistently missing revenue targets, quickly depleting cash reserves, or assets that are underutilized. If your actual numbers regularly deviate significantly from your projections, it's a clear sign that your financial plan needs revising.

Lastly, the key indicators of financial health in an arcade game room's financial plan include a stable or growing profit margin, a healthy cash flow that comfortably covers all expenses, and consistently meeting or exceeding revenue targets.

No worries, all these indicators are “checked” in our financial plan , and you will be able to adjust them accordingly.

You can also read our articles about: - the business plan for an arcade game room - the profitability of a an arcade game room

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Gaming Lounge Business Plan Template

Written by Dave Lavinsky

Gaming Lounge Business Plan

Over the past 10+ years, we have helped over 500 entrepreneurs and business owners create business plans to start and grow their gaming lounge companies.

If you’re unfamiliar with creating a gaming lounge business plan, you may think creating one will be a time-consuming and frustrating process. For most entrepreneurs it is, but for you, it won’t be since we’re here to help. We have the experience, resources, and knowledge to help you create a great business plan.

In this article, you will learn some background information on why business planning is important. Then, you will learn how to write a gaming lounge business plan step-by-step so you can create your plan today.

Download our Ultimate Business Plan Template here >

What is a Gaming Lounge Business Plan?

A business plan provides a snapshot of your gaming lounge business as it stands today, and lays out your growth plan for the next five years. It explains your business goals and your strategies for reaching them. It also includes market research to support your plans.

Why You Need a Business Plan for a Gaming Lounge

If you’re looking to start a gaming lounge business or grow your existing gaming lounge company, you need a business plan. A business plan will help you raise funding, if needed, and plan out the growth of your gaming lounge business to improve your chances of success. Your gaming lounge business plan is a living document that should be updated annually as your company grows and changes.

Sources of Funding for Gaming Lounge Businesses

With regards to funding, the main sources of funding for a gaming lounge business are personal savings, credit cards, bank loans, and angel investors. When it comes to bank loans, banks will want to review your business plan (hand it to them in person or email to them as a PDF file) and gain confidence that you will be able to repay your loan and interest. To acquire this confidence, the loan officer will not only want to ensure that your financials are reasonable, but they will also want to see a professional plan. Such a plan will give them the confidence that you can successfully and professionally operate a business. Personal savings and bank loans are the most common funding paths for gaming lounge companies.

Finish Your Business Plan Today!

How to write a business plan for a gaming lounge business.

If you want to start a gaming lounge business or expand your current one, you need a business plan. The guide and sample below details the necessary information for how to write each essential component of your gaming lounge business plan.

Executive Summary

Your executive summary provides an introduction to your business plan, but it is normally the last section you write because it provides a summary of each key section of your plan.

The goal of your executive summary is to quickly engage the reader. Explain to them the kind of gaming lounge business you are running and the status. For example, are you a startup, do you have a gaming lounge business that you would like to grow, or are you operating a chain of gaming lounge businesses?

Next, provide an overview of each of the subsequent sections of your plan. 

• Give a brief overv iew of the gaming lounge industry. 
• Discuss the type of gaming lounge business you are operating. 
• Detail your direct competitors. Give an overview of your target customers. 
• Provide a snapshot of your marketing strategy. Identify the key members of your team. 
• Offer an overview of your financial plan.

Company Overview

In your company overview, you will detail the type of gaming lounge business you are operating.

For example, you m ight specialize in one of the following types of gaming lounge businesses:

• Gaming lounge membership club : While the lounge is dedicated to serious video game play, the members-only club creates a community of friends and hours of enjoyment. Members pay monthly dues for unlimited access to video gaming, virtual reality and class video slot machine play.
• Board game cafe: Board gaming cafes are dedicated to board game aficionados who join any games that appeal to them. Appetizers and beverages may be offered.
• Arcade gaming lounge: For video arcade diehards, the arcade gaming lounge represents the classic arcade games much beloved by players. Games are video slot machine-play.
• Gaming bar and grill: For players who like to combine the latest video games, virtual reality and high-end technology, gaming bars are the go-to place. Players typically have a choice of beer, wine or cocktails with favorite foods, such as burgers and fries, from the grill. 

In addition to explaining the type of gaming lounge business you will operate, the company overview needs to provide background on the business.

Include answers to questions such as:

• When and why did you start the business?
• What milestones have you achieved to date? Milestones could include the number of gamers served, the number of large gaming events held, or, reaching X number of lounges opened, etc.
• Your legal business structure. Are you incorporated as an S-Corp? An LLC? A sole proprietorship? Explain your legal structure here.

Industry Analysis

In your industry or market analysis, you need to provide an overview of the gaming lounge industry.

While this may seem unnecessary, it serves multiple purposes.

First, researching the gaming lounge industry educates you. It helps you understand the market in which you are operating. 

Secondly, market research can improve your marketing strategy, particularly if your analysis identifies market trends.

The third reason is to prove to readers that you are an expert in your industry. By conducting the research and presenting it in your plan, you achieve just that.

The following questions should be answered in the industry analysis section of your gaming lounge business plan:

• How big is the gaming lounge industry (in dollars)?
• Is the market declining or increasing?
• Who are the key competitors in the market?
• Who are the key suppliers in the market?
• What trends are affecting the industry?
• What is the industry’s growth forecast over the next 5 – 10 years?
• What is the relevant market size? That is, how big is the potential target market for your gaming lounge business? You can extrapolate such a figure by assessing the size of the market in the entire country and then applying that figure to your local population.

Customer Analysis

The customer analysis section of your gaming lounge business plan must detail the customers you serve and/or expect to serve.

The following are examples of customer segments: individuals, club members, event partygoers, and corporations.

As you can imagine, the customer segment(s) you choose will have a great impact on the type of gaming lounge business you operate. Clearly, individuals would respond to different marketing promotions than event partygoers, for example.

Try to break out your target customers in terms of their demographic and psychographic profiles. With regards to demographics, including a discussion of the ages, genders, locations, and income levels of the potential customers you seek to serve.

Psychographic profiles explain the wants and needs of your target customers. The more you can recognize and define these needs, the better you will do in attracting and retaining your customers. Ideally you can speak with a sample of your target customers before writing your plan to better understand their needs.

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Competitive Analysis

Your competitive analysis should identify the indirect and direct competitors your business faces and then focus on the latter.

Direct competitors are othe r gaming lounge businesses. 

Indirect competitors are other options that customers have to purchase from that aren’t directly competing with your product or service. This includes bowling alleys with pinball machines, at-home gaming, or gambling with casino-play. You need to mention direct competition, as well.

For each direct competitor, provide an overview of their business and document their strengths and weaknesses. Unless you once worked at your competitors’ businesses, it will be impossible to know everything about them. But you should be able to find out key things about them such as

• What types of customers do they serve?
• What type of gaming lounge business are they?
• What is their pricing (premium, low, etc.)?
• What are they good at?
• What are their weaknesses?

With regards to the last two questions, think about your answers from the customers’ perspective. And don’t be afraid to ask your competitors’ customers what they like most and least about them.

The final part of your competitive analysis section is to document your areas of competitive advantage. For example:

• Will you provide rewards for frequent players?
• Will you offer events, such as video tournaments, that your competition doesn’t?
• Will you provide the newest technology in gaming consoles?
• Will you offer better pricing?

Think about ways you will outperform your competition and document them in this section of your plan.

Marketing Plan

Traditionally, a marketing plan includes the four P’s: Product, Price, Place, and Promotion. For a gaming lounge business plan, your marketing strategy should include the following:

Product : In the product section, you should reiterate the type o f gaming lounge company that you documented in your company overview. Then, detail the specific products or services you will be offering. For example, will you provide gaming tournaments, rewards for frequent players, themed parties, club membership perks and extended gaming hours on special occasions?

Price : Document the prices you will offer and how they compare to your competitors. Essentially in the product and price sub-sections of yo ur plan, yo u are presenting the products and/or services you offer and their prices.

Place : Place refers to the site of your gaming lounge company. Document where your company is situated and mention how the site will impact your success. For example, is your gaming lounge business located in a popular restaurant and theater district, a standalone building or in a “destination” setting? Discuss how your site might be the ideal location for your customers.

Promotions : The final part of your gaming lounge marketing plan is where you will document how you will drive potential customers to your location(s). The following are some promotional methods you might consider:

• Advertise in gaming magazines
• Reach out to gaming websites 
• Distribute flyers for special gaming events
• Engage in email marketing
• Advertise to club members on social media platforms
• Improve the SEO (search engine optimization) on your website for targeted keywords

Operations Plan

While the earlier sections of your business plan explained your goals, your operations plan describes how you will meet them. Your operations plan should have two distinct sections as follows.

Everyday short-term processes include all of the tasks involved in running your gaming lounge business, including adding and maintaining video machines and equipment, planning and providing tournaments and special events, restocking food inventory, etc. 

Long-term goals are the milestones you hope to achieve. These could include the dates when you expect to book your Xth gaming tournament, or when you hope to reach $X in revenue. It could also be when you expect to expand your gaming lounge business to additional locations.

Management Team

To demonstrate your gaming lounge business’ potential to succeed, a strong management team is essential. Highlight your key players’ backgrounds, emphasizing those skills and experiences that prove their ability to grow a company. 

Ideally, you and/or your team members have direct experience in managing gaming lounge businesses. If so, highlight this experience and expertise. But also highlight any experience that you think will help your business succeed.

If your team is lacking, consider assembling an advisory board. An advisory board would include 2 to 8 individuals who would act as mentors to your business. They would help answer questions and provide strategic guidance. If needed, look for advisory board members with experience in managing a gaming lounge business or successfully running a video arcade or casino gaming room.

Financial Plan

Your financial plan should include your 5-year financial statement broken out both monthly or quarterly for the first year and then annually. Your financial statements include your income statement, balance s heet, and cash flow statements.

Income Statement

An income statement is more commonly called a Profit and Loss statement or P&L. It shows your revenue and then subtracts your costs to show whether you turned a profit or not.

In developing your income statement, you need to devise assumptions. For example, will you see 10 new video club memberships per day, or develop new ways to enhance video gamer play areas ? And will sales grow by 2% or 10% per year? As you can imagine, your choice of assumptions will greatly impact the financial forecasts for your business. As much as possible, conduct research to try to root your assumptions in reality.

Balance Sheets

Balance sheets show your assets and liabilities. While balance sheets can include much information, try to simplify them to the key items you need to know about. For instance, if you spend $50,000 on building out your gaming lounge business, this will not give you immediate profits. Rather it is an asset that will hopefully help you generate profits for years to come. Likewise, if a lender writes you a check for $50,000, you don’t need to pay it back immediately. Rather, that is a liability you will pay back over time.

Cash Flow Statement

Your cash flow statement will help determine how much money you need to start or grow your business, and ensure you never run out of money. What most entrepreneurs and business owners don’t realize is that you can turn a profit but run out of money and go bankrupt. 

When creating your Income Statement and Balance Sheets be sure to include several of the key costs needed in starting or growing a video game room business:

• Cost of gaming equipment and maintenance
• Payroll or salaries paid to staff
• Business insurance
• Other start-up expenses (if you’re a new business) like legal expenses, permits, computer software, and foodstuffs, board games, barware, or restaurant equipment

Attach your full financial projections in the appendix of your plan along with any supporting documents that make your plan more compelling. For example, you might include your office location lease or a list of club memberships generating steady income.

Writing a business plan for your gaming lounge business is a worthwhile endeavor. If you follow the template above, by the time you are done, you will truly be an expert and understand how to start a gaming lounge business. You will understand the gaming lounge industry, your competition, and your customers. You will develop a marketing strategy and will understand what it takes to launch and grow a successful gaming lounge business.

Don’t you wish there was a faster, easier way to finish your Gaming Lounge business plan?

OR, Let Us Develop Your Plan For You

Since 1999, Growthink has developed business plans for thousands of companies who have gone on to achieve tremendous success.  

Click here to see how Growthink’s business plan professional services can help you create a winning business.

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Memory Storage Capacity	512 GB
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About: ACEMAGICIAN is a company established in 2005, focusing on the research, design, production and sales of high-quality hardware, especially in the field of mini pc. We have our own R&D and strong production team and pursue excellent quality.

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Standing screen display size	‎1
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Max Screen Resolution	‎3840 x 2160 pixels
Processor	‎4.4 GHz amd_ryzen_7
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Memory Speed	‎4.4 GHz
Hard Drive	‎512 GB SSD
Graphics Coprocessor	‎AMD Radeon RX Vega 8
Chipset Brand	‎AMD
Card Description	‎Integrated
Graphics Card Ram Size	‎16 GB
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Number of USB 2.0 Ports	‎2
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Brand	‎ACEMAGICIAN
Series	‎AM06PRO
Item model number	‎AM06PRO
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	512GB M.2 SSD	512GB M.2 SSD	512GB SSD	512GB M.2 SSD NVME	512GB M.2 SSD NVME	1TB M.2 SSD NVME	512GB M.2 SSD NVME
	up to 4.4GHz	up to 4.4GHz	up to 3.4GHz	up to 4.3GHz	up to 4.3GHz	up to 4.9GHz	up to 4.9GHz
	WiFi 6 & Bluetooth 5.2	WiFi 6 & Bluetooth 5.2	WiFi 5 & Bluetooth 4.2	WiFi 6 & Bluetooth 5.2	WiFi 6 & Bluetooth 5.2	WiFi 6 & Bluetooth 5.2	WiFi 6 & Bluetooth 5.2
	✔	✔	✔	✔	✔	✔	✔

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Customer reviews

• 5 star 4 star 3 star 2 star 1 star 5 star 71% 13% 4% 3% 9% 71%
• 5 star 4 star 3 star 2 star 1 star 4 star 71% 13% 4% 3% 9% 13%
• 5 star 4 star 3 star 2 star 1 star 3 star 71% 13% 4% 3% 9% 4%
• 5 star 4 star 3 star 2 star 1 star 2 star 71% 13% 4% 3% 9% 3%
• 5 star 4 star 3 star 2 star 1 star 1 star 71% 13% 4% 3% 9% 9%

Customer Reviews, including Product Star Ratings help customers to learn more about the product and decide whether it is the right product for them.

To calculate the overall star rating and percentage breakdown by star, we don’t use a simple average. Instead, our system considers things like how recent a review is and if the reviewer bought the item on Amazon. It also analyzed reviews to verify trustworthiness.

Customers say

Customers like the quality, durability, value, noise and performance of the desktop. For example, they mention it's a powerful addition, runs smoothly and that the hardware can be upgraded. That said, they appreciate the size, ease of installation, and gaming.

AI-generated from the text of customer reviews

Customers like the performance of the computer. They say it runs smoothly, is fast enough to work from home, and has high performance mode unlocked. Some mention that the double RJ45 ports are a plus. Overall, most are satisfied with the performance and functionality of the product.

"...It works great and is very speedy machine ! But I had a problem, there was NO WAY to stop the lights on top of the unit from glaring constantly...." Read more

"...Processing shows no slowdown despite that Google memory-hog! Switching tabs is fast and I can simultaneously run other apps, including games...." Read more

"...It is fast enough to work from home without lags or issues.- Double RJ45 ports is a plus- Also HDMI and Display port..." Read more

"...6 (with an end game save - full world revealed and tons of units) ran so smoothly , it was impressive...." Read more

Customers are satisfied with the size of the computer. They mention that it has a tiny footprint and low power consumption. Some say that it is a great mini PC that takes up no space and works like a champ. They also appreciate the capabilities and size of this sleek, efficient setup. Some customers also mention that the form factor is excellent and that it does everything they need it to do.

"...Overall, this is a great choice for those desiring a compact physical profile while keeping the responsive performance needed for a variety of daily..." Read more

"...It's small , fast and quiet.I don't think the 512GB SSD installed will be enough for me, so I installed an additional 2.5 SSD...." Read more

" Small and powerful, this machine has taken the place of what was once a much larger media center PC. There are two issues I've run into:1...." Read more

"It's a very good computer, it's small and doesn't take up much space , I had a small problem with the computer updates but the customer service..." Read more

Customers like the value of the computer. They say it's the best value for a high performance PC, the best purchase for a budget gamer, and it takes up way less real estate on the desktop. Customers also mention that the 65W total power usage is great for lowering the electric bill.

"...The price was great and now I'm in love with unit." Read more

"...but can be mounted out of the way more easily and is a far more economical option ...." Read more

"...It was a real treat to have gotten something like this for such a great price ...." Read more

"... Best purchase for a budget gamer ." Read more

Customers like the durability of the computer. They say it's rock solid, reliable, and has awesome quality. They also say that the computer is awesome for day-to-day use, impressive, and perfect for general tasks and most games.

"...Performance has been excellent overall, with reliable starts , fast HD access and snappy responses...." Read more

"...7 5700U is very fast and meets or exceeds my browsing, productivity and video viewing needs ...." Read more

"...Overall a great computer for light and moderate use, good for working from home with plus, but not recommended for anything else...." Read more

"...I know I needed to use a TRRS not just plug the TRS in, the pick up strength was so weak it was unusable for conference calls...." Read more

Customers find the installation process of the computer to be easy. They mention that it's super easy to setup and upgrade both the RAM and SSD Drive, and that installing Linux went smoothly. They also appreciate the clean Windows install and the fact that it handles most compute chores with ease. Customers also mention that there's no need for tech support.

"...The company needs to address this.But the unit was super easy to setup and upgrade both the RAM and SSD Drive...." Read more

"...That FREE program is great . It cloned the system drive (with all 4 partitions) from the 2 TB drive to the smaller 500 GB drive. It took only 20 mins...." Read more

"...Quick, easy setup and having the built in Wi-Fi card for a backup works great when the main internet line goes down...." Read more

"5800u w/32GB DDR4 and 512GB M.2 SSD:- The Windows install is clean ! No bloat and task tray/Start menu both cleaned up.-..." Read more

Customers like the noise level of the computer. They say that it runs quietly, and that they can't hear any fan.

"...Now it's the perfect, quiet and lightless system! The company needs to address this...." Read more

"...It would ramp up the power output, turning on the fan. The fan is somewhat quiet , but since I was used to no noise, even under a moderate workload,..." Read more

"...It's small, fast and quiet .I don't think the 512GB SSD installed will be enough for me, so I installed an additional 2.5 SSD...." Read more

"...And the heat generated is also much much lower. Quiet operation .Ready to buy another for ProxMox..." Read more

Customers like the gaming capabilities of the computer. They say it can play games pretty good, is ideal for playing emulated console games from the past, and is great for casual gaming. Some customers also mention that it's nice for simulation games and modern shooters. Overall, most are satisfied with the gaming performance of the product.

"...The game playing is pretty good considering that the integrated Radeon graphics are a bit anemic with only 5 cores and a max of 1900 MHz...." Read more

"...It will run any older games and emulators ." Read more

"...The graphics and CPU is quite fast and can play most popular MOBA and FPS games at 1080p 60fps+...." Read more

"...This will play modern shooters , GTA, Fallout 4, etc right out of the box.My only complaints are easily remedied:..." Read more

Customers like the quality of the computer. They say it's very advanced, a powerful addition, and has better specification than buying the laptop in the same range. They appreciate the easy upgradeability of the RAM and SSD.

"...is excellent for a home set up, casual use and for the money it offers a great combo ...." Read more

"...+ Easy to upgrade : I haven't tried it yet, but one reviewer's vid definitely makes it something I'll attempt within the next month or two...." Read more

"...The rear USB is for POWER ONLY. It does not seem to be a passthrough like some other devices...." Read more

"...The installed hardware meets my current requirements ...." Read more

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