UP FRONT
There was a time in this industry when the amount
of money that your game machines take in would be
one of the last things you would want to tell an
outsider. In those days, the amusement business was
regarded by the general public as a nickel and dime
business and most people had no idea, nor did they
much care about how much money amusement
machines took in . Back then , the ordinary person had
no idea what a Chicago Coin Speedway or a Gottlieb
Sheriff was.
Ever since the space age technology gave birth to
the video game, the general public has been
becoming increasingly aware of these modern-day
marvels of skill. One would be hard pressed to name a
national TV network, newspaper, or magazine that
has not done a splashy feature story on video games.
Names such as Space Invaders, A steroids, and Pac-
Man have all but become household words. And no
thanks to the national news media, the general public
now has the mistaken impression that video games
take in $500 a week and that last year alone, video
games brought in $5 billion as a gross take. What they
don 't know is what the nation's media failed to tell
them-less than one percent of the video games on
location today earn anything close to $500 a week ,
and of that $5 billion gross, only half went to the
operating sector of the industry. The location owners
all over America got the other half!
What we have now are a lot of industry outsiders
who no longer regard our industry as a nickel-and-
dime business but rather a get-rich-quick business
where huge fortunes can be amassed in one' s spare
time. Heading the list of these industry outsiders who
harbor these laughable misconceptions are govern-
ment officials, overly concerned parents, and those
countless dreamers out there who still cling to the
belief that one can make money without having to
work for it.
Legislators are just champing at the bit to increase
taxes on an industry that appears to be making a lot of
money and is defenseless at the legislative level. A
growing number of parents are becoming concerned
with the amount of money their kids are spending on
the play of video games. And many of these parents
have gone so far as to get local restrictions put on
arcades and in some areas to have arcades outlawed
entirely. And then there is the vast number of people
out there who have been looking for a business in
which it's easy to start up, easy to run, and easy to
make money . The lure of all those quarters in all the
video games has attracted a large number of people
looking to get into the amusement machine business.
Everybody and his brother-in-law, it seems, wants to
open his own arcade.
What somebody should tell all these people is that
the average video game earned $140 a week last year .
That left only $70 for the operator-before expenses!
And after one year, the operator is lucky if the
machine has earned back its purchase price. If he' s
really lucky, that same machine may still be on loca-
tion after one year but it's not likely to earn anything
close to $140 a week.
These people should be told that the cost of video
games has increased 300 percent in less than ten years.
What these people should know is that it is difficult
for the operator to control his costs . It is even more
difficult to control his pricing, not to mention loca-
tion commissions, equipment selection, labor costs,
licenses, taxes, and all the other costly headaches
today's operator has to put up with .
It's time these industry outsiders got the real
picture of what our business is really like. The plain,
simple fact is that it has become a hell of a lot tougher
than most people think it is to make a buck in this
business. It's time they learned that simple fact and it' s
time for you to start telling them!
~~-
Ralph C. Lally II
Editor and Publisher