Arcade Economics

[christo930]

When I was a kid in the early 80s, I remember a whole slew of arcades opening up and within a couple years most of them were closed. I was recently looking at some arcade machines on YT and a couple of them mentioned the total number of plays. One of them was an Atari Touch Me which only had 10k plays on it (which was the highest count I saw), and that is a really old game which a had a long run with little competition.

 

At the height of the early-mid 80s arcade era, there were new games coming out every month. And I remember seeing them running in their attract mode everywhere from supermarkets to corner delis to those arcades. Another thing I remember about the games is they were usually owned by a coin-op vendor who also put the pinball, cigarette machines and juke boxes in various places.

 

One would assume that the distributor bought the machine and then placed them out on a profit sharing basis.These machines would eat a few hundred watts just sitting there and taking up room.

 

Though I glanced around (lightly) looking for cost information, I haven't found a pricing list. IIRC, I thought I remembered being told they were, at that time, between like 12 and 1,500 dollars. The store owner would want a good cut and has to earn a decent amount of money to justify the electric bill, lost space and possibly kids hanging out at your store to play the game. Most had a very short life before a newer better game came out and the players got bored of the game.

 

I am mostly asking about that early era of say 1980-1984 when there were constantly new games being released. Were these things making money? The more popular ones had a lot more staying power. I still see Ms Pac Man machines around occasionally. But a lot of the games came out and were gone in a few months.

 

Did the economics work? When you take out the really popular games, what is the average number of total lifetime plays of these machines? Or were they all just used, as they were in my area, to launder money?

Edited May 10, 2019 by christo930

[mr_me]

I believe the machine owner would split the money with the store 50/50. I remembered machines in stores being older, mostly paid for machines. If a machine cost $2500 in 1982, at 25c a play it needs 10k plays to break even, 20k if you're splitting the money. For an arcade owner, that's 28 plays a day every day for a year before you start seeing profit. Seems reasonable when arcades were packed. Eventually twentyfive cents a play wasn't enough, which is why around 1984 they started making multiplayer machines.

[christo930]

I believe the machine owner would split the money with the store 50/50. I remembered machines in stores being older, mostly paid for machines. If a machine cost $2500 in 1982, at 25c a play it needs 10k plays to break even, 20k if you're splitting the money. For an arcade owner, that's 28 plays a day every day for a year before you start seeing profit. Seems reasonable when arcades were packed. Eventually twentyfive cents a play wasn't enough, which is why around 1984 they started making multiplayer machines.

 

There really aren't many mutliplayer arcade machines other than the typical take turns mutliplayer.

[mr_me]

You're right, prior to 1985 there wasn't many simultaneous multiplayer games but manufacturers had to find ways to increase revenues without going to 50c play. In 1983 there was mario brothers and in 1984 Karate Champ. Then in 1985 Gauntlet, yie-ar kung fu, tekhan football and soccer, sky kid. In 1986 ikari warriors, bubble bobble. In 1987 double dragon, xybots, contra, street fighter. In 1988 final lap, narc, altered beasts, double dragon ii, tetris, cyberball, toobin. In 1989 golden axe. In 1990 smash tv, pit fighter.

Edited May 10, 2019 by mr_me

[VectorGamer]

Don't forget Space Duel

 

Edit: actually quite a number of arcade games from the b/w era like Space War, Atari Football, Pong and Canyon Bomber

Edited May 10, 2019 by VectorGamer

[toiletunes]

Around 1997, I bought a 'Side Arms' cabinet from an arcade. The coin counter was around 28,000. A little later, I got Ms. Pac-Man at auction, and the counter was 89,000.

[christo930]

Around 1997, I bought a 'Side Arms' cabinet from an arcade. The coin counter was around 28,000. A little later, I got Ms. Pac-Man at auction, and the counter was 89,000.

Someone mentioned the machines costing $2500.

I have no doubt there were some machines, and Ms Pac Man is definitely one of them, that made a lot of money. As I mentioned earlier, I still see Ms Pac Man machines around today, the original ones. No doubt those machines earned 10s of thousands of dollars. However, if all or even most arcade machines were that profitable, the industry would not have collapsed.

[Turbo-Torch]

Arcades didn't really take off until Space Invaders and Pac-Man. The B&W games from the 70s were niche additions to places that had plenty of pinball machines, such as pool halls. The Atari Touch Me you mentioned is from 1974; maybe you would have seen something like that in the game room of a roller rink or bowling alley mixed in with the pinballs. 70s were not the time of video arcade games. Heck, the 2600 didn't really take off until Space Invaders.

 

Finding arcade games in every 7-11, department store, grocery store, restaurant, ice cream shop, etc. was an early 80s thing. They made stupid amounts of money.

Like anything in life, I'm sure there were duds during that time, but do you recall any? Go into my local 7-11 and you'd have something like Joust, Frogger and Donkey Kong...usually with a wait to play. My bowling alley had Jungle King, Carnival, Moon Patrol, Super Pac-Man, Missile Command and Tempest. You waited in line, especially after Saturday morning leagues.

During the holidays at the mall, you waited to get into Aladdin's Castle because the place was exceeding fire safety limits.

 

You also have to keep in mind that many of the coin counters are limited. I guarantee my Pac-Man has been rolled over at least once (like an old car odometer) and has 138,000 plays. I believe that would be about $30K in profit after factoring in original cost, repairs and business tax.

My Missile Command is pristine and looks like it's never spent time on location. Like most Atari games, it has two counters with a total of around 36,000 plays. Even with that low use, it still made about $5K.

 

There were a few money pits, such as Sega vector games...the G-08 monitors literally went up in flames, sometimes taking the building down with it.

I also doubt crap like Dragon's Lair and Space Ace made any money. Expensive to buy and maintain and the wow factor went away quick after people realized they were simply stupid with no game play involved. First few weeks they got a lot of attention and then they sat abandoned with their 50¢ price tag, while people were still lining up to play Donkey Kong.

[Shaggy the Atarian]

Here's a price list of some games from 1985, so not exactly the era you are looking for, but how much a game would cost would often be determined by it's demand seen on location test or even at trade shows. Keep in mind that a lot of those were fire sale prices or were game kits, kits always costing considerably less than a dedicated cabinet:

 

https://twitter.com/arcadeheroes/status/1124376852175261696

 

It was unusual for a new dedicated game to cost above $3000 in the 70's & 80's. But even then, most games made their money back without too much trouble. I remember coming across an old Cinematronics Rip Off around 2009. Inside of the cabinet was a paper with some numbers written on it from 1982. I wish I had a picture of it, but I recall that Rip Off itself was hauling in over $120/wk in '82, and that was for a somewhat obscure game. Big stuff like Asteroids, Pac-Man, Ms. Pac-Man, Space Invaders could haul in over $1000 a week without breaking a sweat.

 

Fast forward to today and things have changed with inflation - the average price of an arcade machine is about $8000, but typical ROI is 12 months (in some cases, much faster if the game is really hot; my Cruis'n Blast had earned it's keep in only 5 1/2 months). Of course, nowadays we have games that are surpassing the $30k threshold on cost (almost any VR system; Halo: Fireteam Raven; Star Wars Battle Pod; House of the Dead Scarlet Dawn after shipping & taxes).

[zzip]

Arcades didn't really take off until Space Invaders and Pac-Man. The B&W games from the 70s were niche additions to places that had plenty of pinball machines, such as pool halls. The Atari Touch Me you mentioned is from 1974; maybe you would have seen something like that in the game room of a roller rink or bowling alley mixed in with the pinballs. 70s were not the time of video arcade games. Heck, the 2600 didn't really take off until Space Invaders.

 

Yeah, I remember going to the mall as a kid in the 70s, and there was one game machine sitting there against the wall. First one I had ever seen. Then maybe a year later, there was a whole line of games there, sitting against a wall-- all black and white. Then later they built a "shop" to house them all, and that became my first "arcade".

Edited May 13, 2019 by zzip