The Resurgence of Arcades: A Profitable Venture in 2024 — Pyramid Technologies, Inc. (2024)

FAQs

Are arcades profitable in 2024? ›

The arcade gaming market size has grown marginally in recent years. It will grow from $12.24 billion in 2023 to $12.44 billion in 2024 at a compound annual growth rate (CAGR) of 1.6%.

Compared to other types of business, arcades can have relatively low overhead costs, and high margins. After you pay for your equipment and rent, arcades become highly profitable.

The revival of arcades is fueled by gamers seeking entertainment options beyond the digital realm, and the industry is experiencing growth with revenue expected to reach ~$5.48 million by 2030.

Average arcade game revenues range between $200 to $485 per game per week on an annualized basis. However, these numbers really depend on the type of facility you operate and how you present or market your attraction-mix to your target demographic.

But, eventually, the economics became less attractive, and the arcades started closing or changing direction. These days, classic arcade machines are expensive to maintain and require specialist technical knowledge; the parts aren't being made any more.

Further impacting the arcades, the rising popularity of home consoles threatened the arcades, since players did not have to repeatedly spend money to play at arcades when they could play at home.

On average, you can expect to spend between $20,000 to $500,000 to start an arcade game room. Let's break down what impacts this budget the most. The location of your arcade game room is a significant cost factor.

Absolutely, the arcade is a wise and good investment! Gaming is more than a recreational pursuit that builds your social circle; it is also an economically rewarding venture. Arcades have experienced a revival as gamers seek entertainment options beyond the digital realm.

In 1982, Space Invaders was considered the highest-grossing entertainment product of its time, with comparisons made to the then highest-grossing film Star Wars, which had grossed $486 million, while Pac-Man is today considered the highest-grossing arcade game of all time.

In the modern day, there are an estimated 7,206 arcade businesses. In the last five years alone, the U.S. arcade industry decreased by 8.2%.

Why aren t arcades gambling? ›

But many state gambling laws don't claim arcades to be gambling for a few reasons. In most cases, arcade games are games of skill, meaning you have some control over the outcome. Additionally, these games usually don't pay out money as a reward for winning.

With tokens they have to adjust the mechanical change machines or each coin slot on each game. Plastic cards are cheaper than metal tokens, so if customers take home tokens and don't return, it costs more to replace them. Initial investment is lower, and replacement costs are lower.

It can be very profitable and lucrative, with ROIs for games ranging from a couple of weeks to a couple of years. Even the longer ROIs are still a great investment and return compared to most industries.

Each machine in an arcade generates an average of $300 per week in revenue. After rent, expenses, and labor, your profit margin should be around 30%.

On a weekly basis, light users play less than half an hour and spend less than $1.50; heavy users play about 4.5 hours and spend more than $9.00. ...

The target demographic for a video arcade business is typcially teenagers 13 to 18 years, after school or on weekends with nothing to do.

There are 6,156 Arcade, Food & Entertainment Complexes businesses in the US as of 2023, a decline of -1.7% from 2022.

Given these variables, the total cost to start an arcade business can range from $75,000 to over $200,000. This broad range reflects the significant differences in choices business owners must make regarding location, size, game selection, and additional offerings.