The first time I remember playing an arcade video game was near the cashier area in our local K-Mart around 1980. There was a small corner in front of the cashiers with 3 video games. One of them was Space Invaders and I can’t even remember the other two games. I only recall playing Space Invaders while my mum was shopping or waiting in line to pay. I quickly got hooked on this black and white classic.
The Early Arcade
In the same mall was a early-style arcade called Fun and Games. It was near the grocery store where my mum shopped each week so I’d come along and while she shopped I’d go to the arcade for 15 minutes or as long as my quarters lasted and spend them on the lame low end video games they had at the time. Again, this was in the 1980-81 timeframe so there wasn’t much to choose from.
The only game I can actually remember them having – because of how bad this game was – was a baseball game. It had one button for you to swing a bat at a ball that was ejected from a trap door. The door would quickly open and fire the ball bearing ball in the direction of your bat and you’d swing and try to hit it at a target to score runs. The “bat” was actually a small rectangular block of wood. The game was super lame. But I played it anyways.
The Modern Arcade
It wasn’t until around a year or so later when a new modern arcade opened on the other side of the mall called FUTUREWORLD in all caps that my obsession with video games really began. I speak about this in more detail on my About page. Dozens of brand new, authentic machines: Donkey Kong, Dig Dug, Galaga, Galaxian, Frogger, Centipede, Ms. Pac-Man. All the most popular games of the day that I didn’t even know existed until FUTUREWORLD opened. They even had bar stools to sit on for most games and the lights were dimmed so you could see the screen better while playing.
And months after that, Fun and Games picked up their game so to speak. They moved to another side of the mall into a brand new location, got rid of most of the outdated games they had and mimicked FUTUREWORLD with brand new video games, most of which were games that FUTUREWORLD had. So my friends and I had an excuse to go both arcades to play games that the other didn’t have.
The Crash
But one day probably in 1984 from memory, I walked into FUTUREWORLD and it had changed. Gone were the gates at the front of the arcade that previously required you to use a credit card-type membership card to enter. The young people who worked there were gone and it was now being run by a middle-aged husband/wife duo and two of their kids. Many of the game consoles were gone. It was about half full of games as it was before. Some “newer” games had been brought in but they weren’t new games. They were ripoffs of real games in repurposed consoles. And I suddenly noticed that it wasn’t nearly as busy as it had been maybe a year or two earlier when I first started going there.
What happened? Little did I know, but in 1983 the video game market essentially crashed.
How did this business tank so hard and so quickly? Well, I discussed some of the main catalysts in the linked article on the 1983 video game crash that just read over. In a nutshell, there were too many crappy video games, too many consoles and a glut of choices. Companies started discounting games and bargain bins filled up. Video game manufacturers filed for bankruptcy and exited the market.
And video game arcades tanked too. Just like FUTUREWORLD.
A Quick History of Video Games
Video games as with other coin-operated machines effectively have their history deeply rooted in gambling. Gambling has a complicated history particularly in America. Many of the well-known video game manufacturers were born in Chicago. ABT Manufacturing, Bally, Midway and Williams were all founded there as was jukebox manufacturer Rock-Ola. And Chicago has a long history of organized crime.
Early on, pinball machines and other coin-operated machines were tied to the mafia and other underground and illegal business activity. Cash businesses tend to have this effect. When pinball machines first arrived, they were immediately lumped in with questionable activities and received negative press from the start. So much so, that beginning in 1942 all the way up to 1976, they were banned in New York City.
Early pinball machines and other coin-operated games often bore signs that said “For Amusement Only” to highlight the fact that they were for fun only, not gambling purposes. But authorities had other ideas and in cities like NYC, thousands of pinball machines were forcibly confiscated, smashed up like alcohol bottles during prohibition and fines issued to owners. Similar pinball bans quickly grew across the country.
1970s and 1980s
It really wasn’t until the 1970s that pinball machines and arcade-style games in general really got a second chance. The early pioneers of this modern (at the time) video game industry included people like Atari’s Nolan Bushnell as well as many pioneers and manufacturers from Japan like Taito and Namco among others.
By the time video arcades were starting to become popular in the late 1970s and early 1980s, new negative stereotypes of coin-operated game parlors arose: Now it related to the corruption of youth. Kids hanging out around smoky arcades with other kids. The increasing violence of video games. Kids spending more time in front of the tv and in front of video games rather than reading, sports and other traditional activities.
But as arcades moved to shopping malls, at least the first stereotype was put to bed. You certainly couldn’t smoke in either Fun and Games or FUTUREWORLD at the mall they were in. There was no eating or drinking either. I never saw anyone get into a fight even though at its peak, there were easily 100+ kids in FUTUREWORLD at any given time. People had fun and it was a great pastime for kids to take part in.
So what happened and why did it end?
Oversaturation
While I convinced my parents that if they let 13 year old me buy Colecovision it would keep me out the arcade and at home instead, it didn’t actually turn out that way. Instead, I played my games on Colecovision at home and still went to the arcade to play the other games that I didn’t have at home. And while home arcade consoles like Atari and Intellivision that cost $200 – $300 probably did steal some business from arcades, there were other reasons that arcades crashed and burned in 1983-84.
For the home video game market, the 1983 crash as mentioned above was due to oversaturation of games and consoles along with poor quality. The death of video game arcades was due to slightly different reasons.
It wasn’t uncommon for each new video game to cost an arcade $3,000 – $4,000 in the early 1980s. That’s about $8,000 – $11,000 in today’s dollars. But many higher end games cost significantly more and three secondary problems quickly arose beyond just the cost of the games:
Exaggerated Earnings
Estimated daily earnings of video games were exaggerated or at best unrealistic. A 1982 article in Time magazine reported that a game owner could expect to earn up to $400 per week in quarters for a single machine. So convenience stores, restaurants and even my local K-Mart added a video game(s) expecting to cash in on this new money making opportunity. To earn $400 on a game that cost 25 cents to play obviously requires 1,600 game plays per week. Even on a 7-day week, that would require 229 game plays per day on average to achieve.
For the average convenience store, restaurant or K-Mart, that’s not happening. Even for an arcade operating 7 days per week, 10 hours per day that would require 23 game plays per hour every hour. That means someone would have to pop a quarter in almost every 3 minutes. That was also very unrealistic for the most part.
Too Many Games, Not Enough Customers
While a bar or restaurant might get a bit of extra income from a video game or two, an arcade which only made money from video games had a tough time being profitable. Over time, there weren’t enough players to play the games when the novelty wore off. When I look back with hindsight, FUTUREWORLD was only packed with kids for a few weeks. Only us diehards continued playing for the long term.
While the first few times I went, it was jam packed full of teenagers – both boys and girls – but after a few months, it was a smaller number of kids hanging out and it was mostly boys in the end. And when your only source of income is 25 cent pieces being fed into a machine, it’s a hard way to make a living. The cost of the machines, rent, incredibly high electricity bills, staff costs, machine maintenance and repairs, etc. And consider that early on, video games were designed that each game began and ended with each 25 cent play.
It wasn’t until game manufacturers wised up and starting producing games where you could add another quarter and continue playing your game and pick up where you left off that games starting offering arcade owners the ability to earn more money. I remember pumping numerous quarters into Double Dragon to keep playing until I’d “won” even though it may have cost me $1 to finally get there. I ended up spending more money than I’d initially planned and soon got used to spending multiple quarters on one entire game play that extended as long as I was willing to pay for it.
But for the most part, games cost 25 cents and when you died, the game was over with no option to continue.
Games Quickly Became Obsolete
Arcade video game consoles as mentioned above had a large up front cost. When the arcade business really started cranking up in the 1980-83 period, many of the legendary games were created and were competing against one another for customers’ 25 cent pieces: Pac-Man, Donkey Kong, Ms. Pac-Man, Galaga, Defender, Frogger, Dig Dug, Robotron, Donkey Kong Jr, Pole Position, Spy Hunter and Zaxxon were just a few of the major games released during this timeframe. My favorite arcade FUTUREWORLD had at least one copy of each of these specific games among others. From memory they had about 5 copies of each of the most popular games like Donkey Kong, Galaga, Dig Dug and Ms Pac-Man stacked side by side when the arcade opened.
So you can imagine the up front cost they paid to stock the arcade. With 5 copies (for example) of Donkey Kong, could they really expect to earn $2000/week on those machines? That’s 8,000 game plays per week that would be required or 1,143 total game plays per day. Again, probably not happening.
And what happened when they spent $3,000 or more on a game(s) that ended up bombing and hardly anyone played?
Final Thoughts
What are the chances of arcades making some sort of comeback? Slim and none most likely especially given the current environment with COVID. Arcades required significant up front investments, consistently large foot traffic into their arcades, and games constantly being fed quarters to pay back their initial investment.
Plus, a great deal of the appeal of arcades is that we could play high quality (mostly) games that we didn’t have access to at home. These days you can quickly search online and find a port or emulator that enables you to play old style games online often for free. Or you can purchase a home system and play your favorite arcade classics on your own home console.
In the late 1990s and early 2000s, newer style arcades started popping up in large cities that combined new video games and pinball machines with other entertainment options like laser tag, billiards, grabber machines, large multi-player driving games and other sports games, skeeball and others often in conjunction with a restaurant and bar. They tended to be located in large venues which had costly rent and of course the games no longer cost 25 cents to play. You might have had the option to pay an up front fee of say $20 or more to have 1-2 hours of unlimited access to the games or some other choice that typically involved purchasing tokens to use on a per play basis.
While Dave & Buster’s remains, other businesses haven’t been as fortunate especially those that were still open in 2020. Laser Quest announced they are closing all North American operations permanently. Playdium in Canada announced a month later that they were closing their last location outside Toronto, years after the downtown location shuttered.
Beyond the retro factor there really isn’t a catalyst for a return of arcades. And with these businesses requiring a large number of people to physically visit their location and patronize the business, the chance of a return to classic style arcades is highly unlikely as a result.
Fun fact: I visited New Zealand in 1983 and 1986 when I was in the middle of my video game obsession. Since they have 20 cent coins and not quarters, video games only cost 20 cents (and sometimes 40 cents) when I was there.