While at a recent conference, I joined a discussion about things that many operators need help with or get wrong about running a game room. I started reminiscing about my rocky start with my own Family Entertainment Center. I could easily identify some of the biggest things I wish had been stressed to me before starting out. I was so concerned with, or maybe just enamored with, some of the more fun and exciting things about starting a business like this, such as how much money I’d be making and what kinds of fun and exciting attractions I should put in my business. I planned my pricing, packages, game/attraction mix, etc. I did, however, miss or fail to plan for several things.
The Importance of a Game Tech
A game tech was one of the biggest things I overlooked and didn’t emphasize. I can’t stress enough how important your game tech is. I have seen several locations that have opened or are operating without a game tech, and I believe it’s one of the biggest mistakes you can make. I can tell you this from experience and ignorance, as I was one of those operators who opened my center without this key player. This is like having a baseball team without a pitcher.
This job is as important or more important than ANY other position in your location. A good game tech will make you (or save you from losing) lots of money. This should be your MVP, and you should take the time to hire well in this position and pay this person well. Don’t skimp here. Don’t think you can just find someone who “likes tinkering.” Ideally, you are looking for someone who can work down at the component level of game/board repair, as someone who can troubleshoot and repair at the component level will save you lots of money.
The Myth of Brand-New Games
Myth: They are brand-new games that will likely be fine for a while. So, as a new facility, I don’t need to worry about this immediately.
Fact: Even brand-new games WILL have issues, and there is a real cost to your business per HOUR that these games are down.
Someone once told me, “Running an arcade without a game tech is like running a kitchen without a cook.” This is absolutely right! There are even courses for learning about fixing games. Not only should you send your game tech to a class like this, but you, as an owner or manager, should also attend. How can you manage or evaluate the performance of your game tech if you aren’t sure what they should be doing or if you can’t communicate with them about the essential inner workings of games? As a good manager, you should have a basic working knowledge of EVERY position in your center. You should not only be able to hop in when busy and assist a cook in running a POS, but you should also be able to perform basic repairs and troubleshooting.
Shipping Parts Smartly
Another mistake I made had to do with shipping parts. It sounds strange, but your choices here can cost you more money than you think. I hate to admit it, but it took me a couple of years to figure out that 9 out of 10 times, the cost per hour of a game that is down or not working usually costs more money than the cost of overnight parts. Ideally, you should have some spare parts on hand. Your distributor should be able to let you know what parts they would recommend keeping on hand. There are certain parts that you should ALWAYS have in stock. But, if you need to order a part for a game, you should know approximately how much that game makes on average per hour. Then, evaluate that cost per day of potential revenue losses versus the cost of overnighting or 2-day shipping. You will likely find that even though spending $100 in shipping a $13 part seems ridiculous, the $113 will be lost if your game is down for a couple of days. This was a jagged pill for me to swallow. I HATED paying so much for shipping, but once you evaluate the actual numbers, it makes total sense. Of course, you could argue that your customers will play a different game, but you don’t want out-of-order games on your game room floor, especially over a weekend when you have the most traffic.
If you give your guests the perception that “they always have broken games,” there is also a cost. After discovering this, I implemented a policy that the game room had to be 100% before the weekend. If a game couldn’t be fixed before the weekend, it needed to be removed from my game room floor. This typically motivated my game techs to get the games fixed quickly, as they are often not fun to move around. I also gave them access to my game reports so they could evaluate revenue versus shipping cost and make educated choices on shipping parts.
Speaking of game techs, when planning your center, please plan a location for your game techs to work. Often, this is overlooked. I realize that space is often a premium, but it’s so much better for a game tech to have a workbench and their own space in the back rather than trying to fix games in front of your guests. Make sure you outfit this space with tools, spare parts, a computer, and a phone. I couldn’t tell you how many locations I find the game tech in a small closet if they even have space. Often, this detail is not on the mind of the architect or designer. Looking back, I would have planned a better space for my game techs and a closer/better storage space for my back stock of redemption goods. These spaces will impact your business and are often overlooked in planning.
Knowing When to Get Rid of Games
The last thing I wish I had known before opening my business was when to eliminate games. As someone with hoarding tendencies who is also very frugal, it’s hard to convince yourself to get rid of that old game that still makes you $1,000 per year and may have no trade-in value. It doesn’t seem to make financial sense. And often, owners tend to convince themselves that more is better. But, the locations that have removed those low-earning games tend to see an overall increase in their game room revenue as a whole. I would recommend an annual conversation, at a minimum, with your distributor to discuss the earnings of your bottom 10% of games and get their recommendations. As a rule of thumb, the lifetime of a video game is only 3-6 years, and redemption is 5-8 years. Of course, some games will buck this formula, but the point is that you need to plan to switch up your game room regularly and get rid of the low earners in your game room. More is not always better.
Think about your games like a car purchase. If you purchase a car, drive it for a few years, and then trade it in a while without excessive miles, you will have a decent trade-in value that you can use toward a new car. If you are still driving your 1995 Ford Explorer with 300,000 miles on it, you likely will not get much, if any, trade-in value, as there isn’t much resale value in that car anymore. You may even have to scrap it, even though it still runs (kind of). Also, the maintenance cost is higher than the value at a certain point. The most successful arcades will trade in their games while still having a trade-in value. If you are operating these very old games…. it’s time to eliminate them. They are hurting your bottom line and making your location look outdated and old.
I hope someone out there reading this will learn from my mistakes. Hire a fantastic game tech and take good care of them. Give them the tools and space to keep your game room in working condition. Get broken games off your arcade floor. Don’t worry about the expedited shipping costs without considering and comparing them to the loss in game room revenue. Plan ahead and stock spare parts. Get rid of the low-earning games and regularly refresh your game room. Create lasting relationships with your vendors, as the good ones will support and guide you and want to see you successful.